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Part 1: Managing Your Department

In this first part of our series, “The Essential Skills of a Future-facing Law Department”, we discuss the best practices in law department management.

This article is based upon the Practice Note “In-House Counsel Skills Needed to Support Emerging Law Department Responsibilities,” one of the more than 65,000 resources available in Practical Law.

Even as general counsel are feeling more and more pressure to deliver legal work efficiently and cost-effectively, they are also feeling pressure to align with the strategic goals of the business and to quantify the law department’s contribution toward those goals.

The research supports this position. According to the 2019 State of Corporate Law Departments report jointly produced by Thomson Reuters and Acritas, high-performing legal departments deliver superior value by maximizing their organization’s success and by providing long-term shareholder value.

Clearly, those in the legal department need a new set of skills, not only for today but most certainly for tomorrow. In this first of three articles, we’ll look at the management skills that your department will need in the future.

Operations management

In response to law departments’ expanded responsibilities, expectations, and pressures, the field of law department operations (LDO) has recently developed. Many law departments are hiring dedicated LDO professionals to manage their non-legal operations.

LDO activities can include:

  • Creating and implementing a law department strategic plan and budget
  • Hiring, training, and managing law department personnel
  • Engaging and managing third-party service providers like outside counsel, ALSPs, and LPOs
  • Designing, implementing, and leveraging process improvements and new technology
  • Regulatory tracking and compliance
  • Knowledge management
  • Legal project management

The general counsel and other in-house counsel need to handle the LDO responsibilities if a law department introduces an LDO function but does not hire a dedicated professional manager. While in-house counsel already handle many of these tasks, the increased scope of law departments’ responsibilities amplifies their importance.

Financial management

The former view of a law department as a cost center with little control over its expenses has been replaced with strict requirements in:

  • Planning
  • Budgeting
  • Forecasting
  • Cost containment

In-house counsel need to develop financial management skills to:

  • Effectively manage their projects in accordance with the department’s budget
  • Demonstrate the law department’s contributions to the organization’s financial results
  • Resist efforts to reduce the law department’s budget
  • Support the law department’s requests for additional staffing, tools, and funding

Personnel management

The expansion of law departments’ responsibilities increases the importance of effectively hiring, managing, and retaining department personnel. Ineffective personnel administration distracts attention from the law departments’ core functions, reduces efficiency, and raises costs. In-house counsel managers must be increasingly effective in the following areas:

  • Recruiting and hiring
  • Onboarding
  • Training and development
  • Goal setting and performance management
  • Succession planning

Third-party management

Although many law departments are increasingly insourcing their legal work, they continue using third-party service providers. Previously, in-house counsel relied primarily on law firms to provide these outsourced legal services. However, over the past several years, other types of service providers have emerged, and service providers in other fields have expanded their services into the legal field. These service providers include:

  • ALSPs and LPOs
  • Accounting firms
  • Litigation and electronic discovery vendors
  • Litigation consultants

The types of legal services being assigned to these service providers include:

  • Supporting litigation and internal investigation
  • Conducting legal research
  • Reviewing and coding documents
  • Coordinating electronic discovery
  • Reviewing regulatory risk
  • Evaluating corporate compliance

Also, law departments are increasingly integrating technology into their operations. If a law department purchases or licenses technology from a third-party vendor instead of using their organization’s information technology (IT) department, the law department will need to manage that vendor and their interactions with the department’s other systems and service providers.

As the legal service provider market further evolves, expands, and fragments, in-house counsel must often oversee multiple service providers working on different aspects of a single matter. Therefore, in-house counsel must carefully identify, retain, and manage these third-party providers to ensure that they:

  • Are appropriately qualified for the services they are retained to provide
  • Adhere to the agreed-to budgets
  • Timely perform their services
  • Work effectively with one another
  • Safeguard the organization’s data
  • Deliver quality services and products to the law department and the organization

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