In Berlin, I often walk by a second-hand store called “Goods without Fault” (“Waren ohne Mangel”).
The naivete of this marketing approach has always baffled me. Why should a fundamental requirement of any product ever be worth mentioning, let alone entice customers to buy? Basically all goods, second hand or not, must function and be without fault—or else one could only use them for spare parts.
It seems to me that the owner of this store has little understanding of fundamental marketing principles.It’s similar with legal departments: To present the legal department’s achievements to executives, as many general counsels do, by saying “We do legal well,” or “We protect our clients from legal risk,” etc. actually offers little marketing value—because protection from legal risk is why legal departments exist. Companies hire and pay lawyers because they are expected to do legal well— it’s a fundamental requirement of the job!
Of course, legal departments possess a certain degree of freedom in how exactly they organize the work. Lawyers may specialize in certain practice areas, or become generalists with a broad knowledge over many practice areas. And general counsels may choose to insource or outsource case work. Sako[33] has investigated the conditions under which general counsels tend to internalize or externalize legal work:
Evidence from Fortune 500 companies reveal that internalizing corporations have more intangible assets (such as brands and intellectual property) to defend, and are more international in their presence. Moreover, companies that externalize legal resources have developed more stable relationships with fewer law firms, each providing legal services in a broader range of practice areas.
Yet regardless of how and by whom the work is done: If legal departments want to lead the business, they must deliver value above and beyond what is expected of them, and they have to start promoting their achievements.
My impression is that in order to repair their damaged image, legal departments should make a stronger effort to market themselves—even though, or rather because most lawyers seem to frown upon such activities. Endowed with a special education prescribed and sanctioned by society, lawyers used to offer what Timmer calls credence services: services whose quality clients cannot assess because they lack the knowledge to do so. Now however, legal departments stand next to Legal Process Outsourcers (LPO) and other alternative legal service providers, and therefore, in the eyes of many executives, in-house departments “need to earn the right to exist.” This right should be earned not by competing but by collaborating with LPOs. Ross'[34] argument for strategic collaboration between law firms and LPOs applies equally to in-house legal departments because like law firms, legal departments will use LPOs only for the effective delivery of internal services and not for representing their companies in court:The theory behind strategic collaboration is not rocket science, just the premise that the whole is greater than the sum of the parts. Contrary to early concerns that LPO providers would compete directly with law firms, it has become abundantly clear to those firms embracing strategic collaboration that the most effective legal services delivery model is a symbiotic ecosystem in which law firms and LPO providers both play crucial roles. LPO providers do not practice law and so are not true alternatives to law firms. (Ross, p. 6)
For in-house legal departments, there is absolutely nothing dubious or shameful about doing good things for the company—and talking about them. Legal departments must promote themselves to their clients, to corporate executive and to their own team members just like all other lines of business do. Brown[35] points out that legal can benefit hugely simply by learning from others:
Successful legal departments address the growing “more for less” challenge by adopting proven, relevant practices from other business functions. The most effective General Counsel and senior legal department leaders have stepped into their ‘C-suite of Legal' shoes, running the legal department with business discipline.
I want to pick up Brown's idea of a “C-suite of Legal” and illustrate what and how legal can learn from three other established business functions: management, operations, and human resources.
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