"Best-in-class" legal department strategies increase shareholder value by developing a proprietary set of actions that make the “whole” worth more than the sum of parts.
Legal Department Strategic Planning
Legal Department Strategic Planning: Objectives
Legal department strategic plans are the governing framework to guide legal, managerial, financial and organizational decision-making for in-house legal organizations. Even "best-in-class" legal departments face numerous, complex challenges when running a high-performing in-house legal organization. Today's legal environment is more complex, often more punitive. Corporate and legal department goals are more dynamic. External pressures (sometimes with conflicting objectives) on corporate legal departments are escalating while internal corporate demands to reduce costs are also intensifying.
To address these many managerial, legal, financial and organizational challenges - and achieve clarity around in-house legal department objectives, in-house legal leaders must establish a role that goes beyond merely monitoring legal matters, overseeing operations, and allocating resources. Without a governing framework aligned to the corporate business strategy, legal departments can under-invest in areas highly critical to the business.
Maximally efficient and effective legal departments have formal strategic plans - and supporting legal department objectives - that are cohesive and highly aligned with their respective business organizations. Strategy involves decisions about "where to play," how best to operate, and "how to win." The goal is for the legal department to reach its full organizational and functional potential. Legal department strategic planning has shifted from the "nice to have" to the "must have" of the high performing in-house legal organization. Indeed, those departments who make the excuse "we are too busy with the day-to-day to find time to plan" will find themselves only falling further behind "peer" departments and competitors who have a deliberate plan to focus resources and effort.
Powerful legal department strategies bolster shareholder value by developing a proprietary set of actions that make the “whole” of the department worth more than the sum of its parts. A strategy (and legal department goals) provides both long-term direction and boundaries; it identifies and capitalizes on the unique competencies of the in-house legal organization. Both day-to-day issues must be addressed and the ability to adapt to emerging “hot” issues must be developed.
Legal Department Strategic Planning: Overview
At Argopoint, we understand the leadership and managerial challenges that are unique to in-house legal departments. We have a track record of working with leading legal departments across diverse industries to help them chart their strategic direction, identify and exploit critical opportunities, and improve core operational performance.
All executives, including legal department leaders, "get" that strategy is critical. But many find it a bit intimidating (and therefore avoid it), because it requires them to frame up, estimate, and confront a future that they can currently only guess at. Stress can increase when there is the perception that choosing a strategy involves decisions that explicitly limits some possibilities and options. The opposite, is, in fact true. Planned, creative strategies can increase legal department agility and options. It is the failure to plan - and therefore defaulting to reactive capabilities - that truly limits options.
We direct our clients through our tested strategic planning process that includes a rigorous formulation of strategic options, data-driven evaluation of alternatives, and measurements to ensure sustainable implementation.
An effective strategic plan will allow an in-house legal department to accomplish the following:
- Establish a portfolio of priorities that drive differential resource allocation and differential targets across the legal department.
- Raise the legal department’s core effectiveness (and the satisfaction of the corporate client it serves). By way of more efficient day-to-day operations and an enhanced stakeholder value, other departments benefit from this higher level of performance.
- Recognize the departmental core capabilities (and constraints), enabling optimal utilization of outside counsel.
- Create demand management disciplines. Legal departments fail when they become "order takers"; they need to actively identify customer needs and prioritize stakeholder requests.
- Achieve system sustainability and "repeatability", creating a competitive advantage for the company through “learning curve” effects.
Please note - the concept of legal department strategic planning is fraught with many misconceptions. One of the biggest is to confuse the annual, typically finance-driven, corporate budgeting process that most legal departments use as "strategic planning." Department budgeting may contribute to strategic planning, but it is emphatically not strategic planning. The conversion of legal department changes and initiatives into corporate three and five year financials is not a strategy. The corporate budget’s narrative/descriptive front end introduction, may appear “strategic” - but most legal leaders know better. Departments that rely on a corporate budgeting process to develop and test strategic assumptions are woefully under-served and typically disappointed. Additionally, strategy and strategic planning is not a "corporate efficiency exercise." Productivity alone and without direction is strategically agnostic. Producing a high volume of legal services and counselling (at lower unit costs) is not the same as pursuing effectiveness and excellence. Without a strategic direction, efficiency is both meaningless and ineffective.
Legal Department Strategic Planning: Solutions and Savings
Our clients complete our strategic planning process with a clear idea of their desired "future state", their current capabilities, and a "road map" to get from "current state" to the "future state."
The department's strategy will ultimately provide the legal department with a clear understanding of both short- and long-term objectives, along with a well-defined pathway to meeting these objectives. As desired, new technologies and new management tools can be leveraged so the department can readily adapt to the “predictable surprises” of an evolving business.
Ultimately, our clients complete our process aligned around their new strategy and ready to execute. Additionally an effective strategic planning process will improve in-house legal departments relationships with their business clients and align the department with enterprise-wide objectives. In-house legal departments with an effective strategy leverage their resources to enhance their effectiveness, organizational impact, and become highly cost-effective.
Understanding where your department is on the journey, and how progress on that path can be accelerated is a critical first step. Some legal departments are new to this kind of process. Others have prior experience, but experienced disappointment and found aspirations fell short of hopes for strategic planning. Still others have a planning process in place - and seek an upgrade and wish to build on and enhance prior success. Argopoint's expertise and knowledge of leading departments "best-practices" are reasons why legal department leaders speak to us first when they want to get started.