It is best to begin by looking at the results you want to achieve. The two most desirable outcomes for all in house legal functions are to effectively serve their customer, ‘the business’ and reduce the total expenditure on legal while still providing that great service. Maximising the resources you have in place and developing a talent roadmap is essential to delivering on both the first and second objective.
Substantial in house legal functions usually take on a layered pyramid structure with the Group General Counsel at the top. Then one or more Deputy General Counsel below some may be based at headquarters, others leading regions of importance; EMEA or APAC or perhaps overseeing functional areas such as corporate or IP. Below these divisional heads you will find a series of further layered mini-pyramids, extending down and out to define the foundation of the department.
The decision to concentrate your legal resource at headquarters or to disperse it geographically more equally will depend on the organisation you are working for and how you integrate with its respective business lines. As a rule of thumb businesses with a weightier presence of legal at headquarters may have greater exposure to legal risk and integration issues. Lawyers should generally be located with consideration given to where business is transacted and not just where high level decisions are made.
The majority of new or incumbent General Counsel will not have the luxury of designing a legal team from scratch in a static environment. Any overhauls to existing structures need to be planned with due care and attention and with your overarching goals in mind. An ideal legal team aligns with your business, culturally, functionally and geographically. In these changing times establishing your company’s identity and drivers can be hard, many businesses are presently in a state of evolution or decline. When a new company is acquired for example they almost always come with baggage. Lawyers who are very senior in locations where they aren’t needed, or a duplication of resource are typical problems our clients encounter; So, what should the General Counsel do to address their legal structure for maximum effect given these challenges?
Start with a question. What are the biggest demands on your department now and what are they likely to be moving forward. If you are employed at a company that is involved with many contentious matters in one region the makeup of your legal team will be different to a business that is in pure growth and expansion mode around the world. Think too about the balance between law firm spend and money used to develop in house resource, how does this vary region by region?
In some instances, it will no doubt make more sense to free up your internal lawyers from complex specialist issues and outsource these to a law firm thus allowing for increased bandwidth to look at supplementary matters within your team. In other instance’s having a lawyer in house who can take charge of a particular area can be fantastic, not just from a financial perspective but also to best serve the business need.
A third consideration when structuring your legal team that is often overlooked is career progression. How do your lawyers rate their chances of moving forward with their career at your company? The nearer the top they get the harder it typically becomes to advance internally. As head hunters most of the discussions we have with candidates that are actively looking for a new role stem from the thinking that there are “one or more lawyers above me not going anywhere anytime soon”.
It is hardest to structure a department so that your top performers stay. In most instances this is best achieved by anticipating future business needs and making sure individuals that are performing well are on track to take ownership of those areas. Where there are roadblocks allow for geographical rotations or other creative solutions that enhance your team members learning and growth and demonstrate progression beyond pure rank and compensation. It seems obvious that it is important to motivate your top lawyers to stay, however, contingencies to make this happen are often unheeded and only addressed once it is too late and not as a systemic planning issue to consider alongside cost and service when shaping the legal department.
There is no one size fits all legal structural template. Just like any team you will need to look at the players you have in place and put them in the best positions to succeed bearing in mind the overall formation of how the pieces all fit together. The structure should have some fluidity to it to allow for change in the business and engagement from within. A legal function that is built to achieve the three core goals of being cost effective, providing excellent service and allowing for career progression will always thrive and endure.
Author: Ken Collins is a legal and compliance search partner with Greenway Collins covering the EMEA region.