Strategic Lapse
Richard G. Stock*
This article was previously published in Lexpert, January 2005.
Turning a new leaf, New Year’s resolutions, and even lightning bolts are not always enough to prompt the members of corporate law departments to do what is most important, as opposed to most urgent. The problem is not particular to law departments. Companies and management consultants have spent a good deal of time trying to disguise, remedy and prevent the gap between strategy and execution.
Management literature now contains sufficient insight and case studies to actually be useful. What were once thought of as back-office departments – legal, human resources, finance and IT - can today be found “at the coalface”. These departments enable companies to develop and sustain the competitive edge in the market. In other words, if they are any good they are inevitably “strategic”. It has become possible across a whole range of industries for the General Counsel and the legal team to have a strategic business plan, or at least to be part of the company’s strategic business plan.
This said, why do companies and their law departments fail to do what they say they are going to do? David Norton and Randall Russell of the Balanced Scorecard Collaborative have identified five factors that inhibit execution of strategy. It is true that explaining a problem does not excuse it. But an awareness by legal management of the pitfalls surrounding implementation and positioning does improve the odds of success. Our consulting experience over the last eight years of working with law departments allows us to interpret the applicability of these factors to the law department.
Executive Leadership Not Mobilized
On occasion, the legal leadership team is not sufficiently engaged to drive execution. A General Counsel takes on the position, commissions a review, and develops a “strategy”. Buy-in from reporting staff is generally not automatic. But even when it is secured, AGC’s or group leaders are unable or unwilling to persuade their own team members and principal users of the need for change. The General Counsel cannot launch the strategy alone. A new “strategic” way of managing is not understood or is not accepted across the board. Legal leadership must share its vision and be able to inspire the entire group to follow in a timely fashion. This is where teamwork begins; implementation doesn’t take place without it.
Strategy Not Translated into Operational Terms
Many companies and their law departments are able to set financial objectives. Metrics such as legal spending or cases / matters resolved are fairly straightforward. But targets to achieve non-economic goals are much rarer. If effectiveness is now one of the most strategic goals a law department can achieve, then developmental objectives to integrate lawyers with business units, risk management focusing the company on the trade-offs between legal and business imperatives, and development of the intellectual capital move to the head of the line. To this, one must add the need to measure service with quantifiable indicators. Again, it is the specifics and operational terms that help answer the all-important question “What difference did the lawyers make?”
Poor Alignment
Medium to larger law departments struggle with how best to align and deploy legal services. Either the lawyers work alone and not in teams with other members of the department, or they are so closely aligned with a business unit or a geographical region that little flexibility exists to re-deploy experienced resources in the department. In other settings, the department is populated with talented generalists who must be all things to all people. As these lawyers enter their third decade of practice, it becomes increasingly difficult to specialize or to keep up with changing corporate direction.
Few View Strategy As Their Job
Compensation for corporate counsel is not designed to reward strategic success. Depending on whether counsel is classified as management, compensation and (bonus) generally depend on corporate services and somewhat on individual merit. It is the exception to find bonuses tied to the achievement of law department objectives. Programs to help lawyers acquire competencies (knowledge / skills) of strategic value to the company are unstructured. Yet leadership and project management skills are scarce in many companies. Legal competencies are simply not enough to succeed as corporate counsel.
Insufficient Communication and Direction
Law department meetings are irregular. When they are held, a review of progress on strategic objectives is rarely at the top of the list. Budget cycles and variances are discussed. But planning and strategy are at best sporadic.
Matters that are urgent deserve the attention of corporate counsel. But they must also be important in relation to the strategic objectives general counsel has set. Otherwise, the department is again failing to do what it said it was going to do.
* Richard G. Stock, M.A., FCIS, C.Adm., CMC is a partner with Catalyst Consulting. The firm has been designated the Preferred Supplier for Legal Services Consulting by the Canadian Corporate Counsel Association. Richard can be contacted at (416) 367-4447 or through the website at http://www.catalystlegal.com.