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Tips can help build a 'world-class' legal department: BarkerGilmore study

From Inside Counsel  |   By Ed Silverstein

There are a variety of steps companies and in-house attorneys can take to build a “world-class” legal department according to a report from legal placement firm BarkerGilmore.

These range from developing the role of attorneys, the attorneys’ needed skills, a commitment to efficiency and being part of the wider business team.

“When the business executives recognize the legal department as an integral partner to the success of the organization, you have captured the essence of a world-class law department,” Bob Barker, managing partner at BarkerGilmore, told InsideCounsel.

Moreover, he points out that if the business team does not view the legal department as a partner, “there are missed opportunities for growth.” He explains, too, that every world-class legal department has a “strong leader who is surrounded with bright, motivated, and empowered lawyers.”

The whitepaper, from the BarkerGilmore, entitled “How to Build a World-Class Legal Department,” reveals that a “superior” legal department should have “skilled legal experts who possess an equally well-honed understanding of business in general, and their business in particular.”

Here are some insights from several general counsel that were highlighted in the whitepaper:

David Hill, executive vice president and general counsel at NRG Energy, says he operates the law department “as a service organization.”

“We’re not there to give answers, then fold our arms and expect somebody else to accept the business consequences,” he said. “We own the problem equally. Lawyers who point out the potential problems, then sit back and say ‘I told you so’ when the business gets sued are basically worthless.”

Amy Olli, senior vice president and general counsel of Avaya, adds that, “Besides having the right level of skill and insight, lawyers really need to understand the business. This includes the competition, the market, and the company’s financials which helps you better understand the risks.”

Specifically, Bjarne Tellmann, senior vice president and general counsel at Pearson, identifies elements essential for a world-class legal department. These include:

  • Focus on the structure of the organization and ensure lawyers have a seat at the table, preferably one close to the client.

  • There should be cultural alignment within the legal department based on mission, values and strategic priorities.

  • Manage costs with appropriate policies and e-billing tools, and consider alternative legal-service providers.

  • Leverage technology such as electronic and self-servicing solutions so it is possible to structure memos and other documents from the cloud, reducing costs and boosting productivity.

  • Identify the core risks within the business and strategies for addressing them, and consider bringing in specialists or outsourcing.

Overall, Hill explains legal leaders should “empower people within their organizations, rather than get mired in the daily details,” the report says. “As the General Counsel, you can’t be expected to know all the facts, all the arguments and all the provisions. That is where the lawyers on your team come in. High performers are perfectly happy to be held accountable.”

Moreover, from the chief executive’s vantage point, Hill says that the “CEO needs to have absolute confidence in the legal function — secure in the knowledge that the GC has absolute responsibility and has smart, competent people who have the best interests of the company at heart.”

Another key question is: Who should the legal department hire? William “Bill” Solomon Jr., general counsel at Ally Financial, recalls, “The best lawyers I’ve hired are inquisitive, creative and determined about solving problems. Give me somebody with the right attitude and aptitude, as long as they are bright enough, over somebody with experience any day. Experience can be developed.”

“The best lawyers are also self-starters,” he adds. “They need to be ambitious and competitive, but also collaborative.”

Sabine Chalmers, chief legal and corporate affairs officer at Anheuser-Busch InBev, recollects, as well, that during interviews, about 90 percent of the conversation is on “cultural fit,” and 10 percent is on “technical ability.”

There are also some approaches to assess the legal department’s effectiveness. Chalmers uses a feedback process with talking points and data points to assess success, as well as identifying areas where there are struggles. Personnel work toward three or four performance targets.

As far as evaluating outside counsel, Solomon uses metrics and focuses on the firms that represent about 80 percent of the department’s legal spend – looking at docket numbers, case count, settlements, counsel fees and other metrics.