Legal Department Optimization: Establishing a Strategic Roadmap for Future Success

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Transcript

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Intro: Welcome to The Legal Report from Robert Half, where industry-leading experts discuss current hiring and practice management issues impacting the legal profession. Robert Half is a premiere provider of talent and consulting solutions for the legal field. The Legal Report from Robert Half is here, on the Legal Talk Network.

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Charles Volkert: Hello, everyone and welcome. I’m Charles Volkert, Senior District President for Robert Half, and Executive Managing Director of its legal consulting solutions practice; and the host of our program. With me today is Rich Cohen; a Managing Director of Legal Consulting Solutions for our company, where he provides guidance to legal departments and firms to enable and form decisions regarding outside counsel and service legal improvements. With more than 40 years of experience in the legal field, Rich is a former general counsel and has served as the head of legal teams in both public and private sectors. He’s a frequent speaker on strategies that contribute to in-house counsel success. Rich, welcome.

Richard Cohen: Hey thanks Chad for having me today, it’s really good to be here.

Charles Volkert: The responsibilities of general counsel had evolved during the recent years; with today’s general counsel serving as a strategic C-Suite partner driving increased value to the business, both strategically and operationally.  At the same time, pandemic-related business disruptions have added to the challenges many legal departments face reinforcing the need to do more with less, while maintaining an engaged and productive workforce. Toda, we’ll discuss the current state of legal department operations, staffing and service delivery and explore a strategic roadmap to greater effectiveness and value for the future. Rich; to star, can you discuss some of the changes legal departments have been making to be more relevant and valuable internal business partners, especially in today’s post-pandemic environment?

Richard Cohen: I sure can Chad and that’s an excellent question. Today’s general counsel and the team the general counsel have, have really morphed in many ways post-pandemic. It’s kind of like a train that’s been going down the track with an engine pulling the train and more cars just kept getting added and added and added and they work harder and harder and harder. They key though here, is to make sure that the general counsel, in managing their department is focused on a few things; operational efficiencies, making sure that they’re close to the business, making sure they understand what the business success means, what does it mean for the business to be successful. Being aligned as a strategic partner as well as a tactical operational person. Legal departments just keep doing more, more and more and being asked to do more and more and more and what they need to do is make sure that they are working as much on the business as they are on the business.

They’re making sure that they’re not following crooked paths that were created over time; that they take a pause and say “can we do this better?” “Is there an alternative way for us to achieve success?” and may of the best legal departments are able to accomplish that. The changes that they are seeing today are not only because of business demands that the internal business is requiring, but their external demands from regulators, from the various actors who are trying to take data from the company and bring the company down; and there’s technology innovation that is occurring which legal departments need to understand “What do I do?” “How do I move the ball forward?” and “How can I be the best business partner for our company possible?”

Charles Volkert: Well, it’s interesting Rich, I mean, great perspective and I love the train analogy because as you walk through many of those examples, it’s really much more of a complex business setting than ever before that not only the general counsel, but the entire in-house counsel team needs to be looking at and really partnering effectively with the other c-suite and leadership within the organization and when you think Rich of general counsels and the in-house counsels, looking to drive greater value in their business, what are their top priorities?

Richard Cohen: Well, you know, general counsel for years have always grappled with, you know, we’re risk averse, you know? That’s the purpose of the legal department. To make sure that we protect the company as best as we can.

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And what’s happened over time is legal departments have become a hurdle to clear at the 11th hour as opposed to a partner who can open up gates of opportunity and the way that businesses can embrace their legal department and the legal department can have more value for the business is for the legal department to be part of the business, to make sure that they are understanding of what the business is doing, participating in meetings that are taking place when they are creating the future of the company, when they are discussing today’s issues and concerns, so that they could be part of fashioning solutions before they become problems. The legal department needs to transform itself from the department of no, N-O; to the department of know, K-N-O-W. And that’s how legal departments become more valuable, they become more effective business partners, they help the organization achieve the goals that they need to, they make sure that risk is avoided to the extent possible, but they’re just not saying no, they’re finding alternative paths to help the business achieve success.

Charles Volkert: What I can imagine Rich if they do that, how much more valuable they become as a business partner in some of those areas like compliance, risk management, data privacy, security, financial matters, and they have a seat at the table in order to do that; what roadblocks, rich, in your experience really loom as the biggest ones in the face of the general counsel in order to really prevent them from driving greater value in their business.

Richard Cohen: Great question Chad, absolutely great question. And part of it is, that it’s a process, not an event that general counsel just can’t switch on a change that we’re now on different department. If a general counsel’s department has been someone who has challenged the business and become a friction point in the business, it’s not going to be an easy change. And I like to say that businesses will look at it in this way, it’s an old saying I use to say to juries, when I used to try jury trials; “A man convinced against his will is of the same opinion still.” You can’t just make someone want to utilize your services and view you as a partner. You need to prove your worth; you need to do it in incremental ways and you need to get some quick successes along the way. When I’ve looked at organizations over the years and I’ve come into situations where I’ve been the general counsel over the years where I’ve succeeded another general counsel; what I find is by sitting down with the business executives and finding out what they’re paying points are, and what they’re success metrics are and what backwards; to find success and work backgrounds.

Think a route, are there alternative ways for us to achieve the success and make sure that you’re driving that success? Roadblocks for general counsel also are not limited to historical and institutional roadblocks, but they can be also related to technology roadblocks that investments were made over the years. In technology, to advance the business interest and the “protect the business”. Protecting the business in many ways frustrates the business because there’s a friction between the business wanting to move really fast and the legal department saying “Not so fast, we got to consider A, B, and C.” And legal becomes somewhat of a cruise control on your car, okay? Think of it like a cruise control. When you’re going too fast, it slows you down, and some of the cars now have technology that if you get out of your lane, it pushes you back into your lane. That’s in many ways what legal does and to make sure the business understands the value of legal in doing those things; then the general counsel will remove those friction points.

The general counsel will have success. And getting back to the technology point that I raised before, existing technicity may be the answer. It may not being used to its fullest advantage; so, before general counsel goes out and buys a shiny new object because they think it’s going to be the magic wand, take a look at your existing technology that you’ve made the purchase on. Take a look and seeing to make sure that you’re using it most effectively and perhaps you just need a bunch of WD-40 to make that work better for you, more effective for you and have applications not only in legal, but perhaps across the business units and work streams that you work with.

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Charles Volkert: I mean, fantastic points, Rich. Maybe just to pick up on a story, I believe we were at the Chief Legal Officer Conference clock and you were sharing with me an example of what you did with a former utility company that maybe could shed some light for our listeners in and around this area; could you share that story?

Richard Cohen: I’m happy to do that. Earlier in my career, I was fortunate to become the general counsel of two public utility companies and you know, to sit in the legal department, to sit in the office in the corner, work peeps coming in at a rapid pace and you get caught up in the urgent and not the important. You can’t distinguish between the urgent and the important because it’s coming at you so fast. So, I wanted to understand how do I differentiate what the business really needs as opposed to what I think what the business needs? So, I deiced to make a concerted effort to go out and be part of the business.

I went out and read meters, I went out and I sat in offices where bills were being paid and customers were coming in and taking complaints, I went out and installed a power pole and I even went into a deep coal mine in West Virginia to see how the coal was being mined. It gave me the ability to understand what the business faces on a day; it’s not a matter of me sitting in an office with my suit and tie on and saying “I’m the general counsel, I’m protecting the company.” Seeing what the business does, understanding what the customer needs is so important. And as you look at your job as a general counsel, understanding that there’s a balance, it’s a three-legged stool between the customer, the employees, and the shareholders. They will all have competing interests, and the way for you to understand what those interests are, and how they all worked together, and how they could be balanced is to get closer to the business, to get closer to the customer, get closer to the employee and understand the shareholder and the investors better.

Charles Volkert: Great example Rich, really, really great and I know we continue to mention general counsel, but all of what you’re talking about today really applies at the general counsel level, the associate GC and throughout that entire legal team, the more that team can be on the same page, follow the gameplan that you’re suggesting the better off that team will deliver for that company and in my experience, key factors that contribute to a legal team’s ability to deliver greater value involve the internal clients and operations outside counsel and other alternative legal service providers as well as the entire in-house counsel staff; Rich, how do you achieve balance with these groups and can you suggest an affective approach that can help legal departments review, evaluate and optimize practices as they relate to these factors?

Richard Cohen: Great question Chad. It’s a great question that has an answer with many legs. I think first, let’s focus on the team, the internal team. You need to understand today that we’re under this concept called “the great resignation”. People are moving left and right and you need to invest in your team, not only in giving them the tools to be successful, but in making sure you’re investing with your emotional intelligence to make sure that those team members understand that you’re dedicated to enhancing their career and satisfaction. Making sure that the team is all on the same page; making sure that you take time to talk to your team members to make sure they’re successful and that you’re doing everything to support their success. So, that’s first and foremost.

Secondly, do an assessment of what work you’re actually doing. Are you doing work which is the highest value work? When I became general counsel of a company, there was an incumbent team in place and I was noticing in the first 30 days outside of one of the lawyers, there was a line of people constantly and I’m like, “My gosh, that guy is really busy, I wonder what he’s doing.” So, eventually I sat with him and I said “What are you doing, what kind of work are you doing?” And the kind of work that this particular individual was doing was very low-level work that a lawyer did not need to do, but people get comfortable with going to that individual and the ROI on that individual’s time was not being maximized. So, what I suggest we do is do an analysis of the work that’s coming into the legal department.

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Making sure that you’re effectively utilizing your personnel and making sure that you have experts aligned to the practices areas that you need. In those areas that are more repetitive, in those areas that may not be requiring some of the skill sets of a higher-priced lawyers, you might consider ALSPs to outsource that work. Where you can get exceptional talent with augmenting staffing and making sure that you’re focusing on the highest value tasks associated with the legal department’s needs. And then what you do is you look at how you’re utilizing not only your internal resources, you look at outside counsel and outside consultants as well to see how are we using them? Is there a metric-driven approach to quantify success; not only for the outside counsel, not only for the consultants but for your internal staff as well. Create metrics, the old adage, you can’t measure it, you can’t manage it, it’s so true. Create metrics and hold everyone accountable for that metric-driven analysis.

Charles Volkert: Excellent. And so, as we examine these various fundamental components, specifically in and around outside counsel, could you go into some greater detail in the process of evaluating outside counsel, legal knowledge and experience, expertise, are certainly important and key indicators, but what other considerations should in-house teams use to evaluate the strategic value of external law firms as well as alternative legal service providers, legal consulting firms?

Richard Cohen: One of the things that we approach today in evaluation of these relationships and I’m seeing it as an emerging trend, is the focus on ESG. Are your service providers, whether they’d be law firms, whether they’d be ALSPs, anyone; are they representative of who you are as a company and what your company culture is, what’s their carbon footprint? What’s their DEI initiatives? How diverse are they? Are they hiring individuals who are geographically diverse? Are they hiring them who are ethnically diverse? All the diversity initiatives need to be looked at, and then what you do is you look at some responsiveness evaluations of these law firms. They may be good, you may think they’re good, but are they really good? I remember as a general counsel, one of my CFOs came to me and said “How are the outside lawyers doing?” and I said “They’re doing a really good job” and he said “How do you know that?” And I said, “I just do. I know they’re doing a good job. I know how much they’re paying them, and I know what the results are.”

And the CFO said to me “That’s not good enough.” So, the CFO helped me develop metric-driven analysis of outside counsel law firms, on responsiveness, on quality of work, on things like diversity. All the holistic types of things that you want to look at, similar to how you would evaluate an internal employee; and then you go ahead and you could have a very in depth conversation with the law firm to show the law firm that while you’re doing a good job, you could do better, and then when the law firm would come to you and say “It’s time for us to have an increase” it’s that time of year where we increase our rates, you could say “Not so fast, we want to have a conversation about that”. We want to talk about what the feedback has been from our employees through this metric analysis and how you compare to other firms. It really gives you this ability at the things that you haven’t had before, and allows law firms to want to do better, to do better.

Charles Volkert: That’s great Rich, thank you. You’ve provided a ton of excellent information. And we have much more to discuss, but first, it’s time for a quick break.

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Charles Volkert: Welcome back to The Legal Report from Robert Half. I’m Chad Volkert and with me today is Rich Cohen, a managing director with our company’s legal consulting solutions practice. Before the break, we were discussing key criteria that legal departments can use to evaluate business value that external firms can offer.

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To that end, a lot has been written about the growing use of legal assessments, to strengthen the value of outside counsel and beyond, why are legal assessments so critical today Rich and how can they be used effectively and how should they be used to enhance the delivery of legal services and ultimately deepen engagements?

Richard Cohen: Yeah, that’s a great question Chad, and assessments help you by gathering data and it’s been said data is the new oil, right? It’s the most valuable commodity that a company has. And assessments help you unlock a knowledge base that exists within the work relationship that we didn’t have before. What you want to know is how someone is doing what they do? Are you aligned with the goals of the company, are you going ahead and providing services to the extent that we would’ve demand of you and expect of you for the dollars we are paying you? And those assessments are not only external, those are internal as well. And what you do is you look at all the processes that you’re involved in, and basically, what I like to do is a heat map; it’s kind of like a red, yellow green analysis to sit down and say “What are the aeras that you really need to focus on to make sure that you’re driving your company in the fastest way possible to the most important success as possible.

Now, how do you do that? Well, you do that in partnership with the greater business, but what you do is intrinsically, you know what’s important and you look at the component parts of what’s important and you break them down and you do an evaluation on each one of those component parts and then you come out with this heat map and a road map for success and it helps you not only internally with your processes, it helps you internally with your people, how you’re managing your people, and how your people are interrelating with the internal clients and then you could do it with your outside counsel, your ALSPs, and other service providers that you have as well.

Charles Volkert: Thanks Rich. And based on your experience, what strategies are most effective in using legal assessments to measure the value of outside counsel services and can you provide examples that demonstrate how general counsel and in-house teams can leverage performance data to strengthen relationships with that outside counsel and improve service levels?

Richard Cohen: Yeah, absolutely Chad. And it goes back to the old saying “You don’t know what you don’t know, but you wish you knew it.” When you sit down with general counsel and outside counsel, and you do these types of evaluations, these assessments, and you show them the data, you really have one of those “A-ha!” moments, and they say “I really didn’t understand that, I didn’t know that, I wasn’t aware of that.” And I was involved in situation where we worked with an outside law firm and evaluated the outside law firm and one part of the outside law firm was doing a stellar job, but another part of the outside law firm, another partner in the firm, was not as responsive.

The relationship manager at the law firm did not know that, they thought everything was fine, and they thought everything was fine because we paid the bills, we kept paying bills, right? That’s the ultimate judge of success. We’re paying the bills, right? Because if there was a problem, you would tell us. Well, this gave insight and helped strengthen the relationship; not only did it strengthen the relationship with the partner who we were having concerns with and we did not realize what those concerns were and how to fix those concerns. But because we addressed those concerns, the actual billing rates went down because they weren’t spending as much time on things that didn’t matter to us and they were more focused on the ultimate success.

Charles Volkert: Well, Rich and you know with that example, it reminded me of another one that we’ve handled in the past especially in this day and age with data privacy and security where a lot of in-house legal teams are looking to us for guidance on how their outside counsel and other service providers actually are protecting their companies’ very sensitive data, right? That’s handed over based on litigation or other work. And so, I know we’ve done other podcasts on that topic, but it just reminds me that there’s so many things you can show in in-house counsel team as you go through various levels of assessment which will help streamline work processes, reduce spend, but also reduce risk and exposure for that organization and thinking about technology, you know, maybe we shift gears to technology within legal departments, we’re constantly reminded Rich of the noteworthy role that technology has played in streamlining, legal operations and practices during the recent years and how evolving technologies continue to drive enhance productivity and cost effectiveness with improved service deliveries.

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How can legal departments optimize legal tech applications to provide even greater strategic insights and then form decisions and ultimately once again, as we started this discussion, enhance business value?

Richard Cohen: Yeah. Chad, I come to this conclusion and I tell many people this; technology is not going to solve and fix a broken process. So, you start first with the processes and you understand it the process broken? Are there too many touchpoints in a process? For example, contract approvals. I’m talking with someone right now who has many touchpoints and contracts that could be standardized. Then you bring in the technology and do an existing technology assessment to make sure you understand what technology you currently have and if there are gaps, then you go ahead and you implement the new technology. The key to implementing the new technology is to make sure you get many of the stakeholders involved in the decision to bring in the technology and to make sure it succeeds.

You want to use the technology that you bring in to its maximum efficiencies. I always indicate Excel is something is familiar with, some people know how to do basic spreadsheets, other people know how to do pivot tables other people know how to do things beyond that. Well, it’s the same thing with any technology you bring in. Technology; in it of itself will not be the success factor unless you use is appropriately and you get people to buy into the utilization of the technology.

Charles Volkert: Excellent. Thanks Rich. Thinking about corporate legal departments for a moment, especially over the next five to ten years, what capabilities and attributes do you anticipate in-house teams will need to succeed what changes or shifts regarding legal department staff and clients, operational processes, external stakeholders, should general counsel focus on now to ensure they are prepared to affectively manage their responsibilities in the future?

Richard Cohen: Yeah. And I always like to say “The toothpaste is already out of the tube” and you’re not putting it back in. There were many models that come to mind. One is obviously the use of flexible staffing to enhance and supplement your existing staffing model because business is moving so fast and business will continue to move fast and business moves faster and technology moves faster than the law. So, the law will always be chasing these areas. So, stay on top of the latest technology, stay close to the business, understand the direction the business has taken. Also understand the pressures that society is putting on the business and what things legal is going to need to do to help prepare for the shift that’s happening societally in terms of focus on ESG initiatives and other initiatives. When you think about it, the jobs that people are doing today, many of them didn’t exist five years ago.

With artificial intelligence coming forward, with all types of demands on business and differences in the way we do business including things like crypto, okay? Alternative currencies, privacy laws that are resolving constantly. It just keeps coming at you and it keeps getting faster and faster and faster coming to you and you’re driving the car while you’re building it, that’s basically what happens and you got to keep that car on the road and you got to bring people who are bright, people who are willing to do more, more and more and have fun doing it. Surround yourself with the best people possible. Bring bright minds in, creative minds, challenging minds. Just because you did something that way before doesn’t mean you should be doing it again in the future. That’s how you will succeed in the future and strap on those seatbelts because it’s going to be a bumpy ride but an exciting ride.

Charles Volkert: Well, change is the new nom; so, it sounds like your recommendation is embrace it and enjoy the ride to the fullest.

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Great and excellent insights from Rich from you today, but unfortunately, we’ve reached the end of our program. Special thanks again to you Rich for joining me today and sharing your expertise and valuable knowledge with all of our listeners. And before we close, how can our audience contact you and where can they obtain more information?

Richard Cohen: Yeah, thanks so much for having me today, Chad. My email is a great way to catch me, it’s [email protected], rich.cohen; C-O-H-E-N @roberthalf.com. You can call me at my cellphone if you want, I don’t mind getting calls on my cellphone; 614-562-0626, 614-562-0626 and of course, by visiting roberthalf.com you’ll find all kinds of information and resources for you to gather to help you in the analysis and evaluation of ways that you could achieve your success moving forward.

Charles Volkert: Excellent Rich, thanks and my guess is the email and/or the cellphone is going to be ringing with some of our listeners reaching out to you and our listeners can certainly reach me at charles.volkert V as in Victor, O-L-K-E-R-T @roberthalf.com and as Rich mentioned, you can visit the Robert Half website for additional career and management resources including our latest Salary Guide as well as information about our talent and consulting solutions at roberthalf.com.  Thanks again Rich and to our audience for listening today. If you like what you heard, please rate us in your favorite podcasting app and follow Robert Half and The Legal Talk Network on Twitter and Facebook. Join us again for the next edition of The Legal Report from Robert Half here on The Legal Talk Network as we discuss important trends impacting the legal field and legal careers.

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Podcast transcription by Tech-Synergy.com