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Structuring your legal department

By Sterling Miller

One question general counsel think about a lot is whether “… my legal department is structured properly to meet the needs of the business?” The question typically arises when the general counsel starts in her position; when there is a structural change at the company (like an acquisition); there are complaints about service; there is a major crisis or failure where the department did not perform as expected.

Regardless of “why,” there are several things to consider when thinking about the right structure for your legal department.

Type of structure

There are three types of structures:

  • Functional (central legal team divided-up by functional area)
  • Client Focused (attorneys embedded into different parts of the business based on line of business or geography)
  • Hybrid (a combination of the first two)

There are pros and cons to each, ranging from efficiency, consistency of advice, and cost, to the strength of client relationships, visibility into problems, and divided loyalties among the lawyers. Career development opportunities can vary as well depending on the structure.

How do you decide?

Which structure makes the most sense for your department is always in flux; there is no “one time and forever” decision. Smart general counsel review structure yearly and in consultation with senior management.

Factors to consider include:

  • Nature of the business
  • Size of the department
  • Location of the attorneys
  • Budget
  • Skills of the existing team, e.g., generalists vs. specialists
  • The team’s reaction to change and the impact of the structure on job satisfaction
  • Service needs of the business
  • What the CEO wants

Sometimes the decision is clear, but not always. A hybrid model, despite its complexities and costs, may be the answer when the answer isn’t clear.

Must do’s

No matter which structure you operate under, there are a few “must do’s” to ensure cohesion and mitigate any negatives that might arise.

These include:

  • Regular communication to the department through regularly scheduled meetings, intranet site or portal announcements, department newsletter, project collaboration, recognition of birthdays and major events;
  • Career development opportunities, such as allowing team members to develop areas of responsibility, get exposure to senior management, move into different sections or geographies (even if only short-term assignments), train the business, help with department administrative tasks, and focus on promoting from within;
  • Use of technology, e.g., webcast and video conferencing, “Slack,” common matter, budget, and document management systems, templates database, dashboards, document assembly, and more.

Getting the structure of the legal department is critical to the success of the team and the quality of the services provided to the business. 

Meet your business needs

Explore the Practice Note “Structuring the In-House Legal Department” Task, available with a free trial to Practical Law Connect.