SystematicandData-Driven
So, what does really work in (legal) management? As Rosenzweig remarks: “nothing works all the time”. Effective management is dependent on the context of organizations and managers should adjust their practices and decisions to fit this context.
Simple recipes for success do not exist. It is perfectly fine to simply try a new policy and see if it has effect. However, systematic management will require setting specific goals before implementing a new policy, and systematically measuring and evaluating its effectiveness. Experts will agree that generally there are basic “common sense conditions” that have to be fulfilled before there can be effective and systematic management of any organizational function. One of the most important conditions will be that an organizational function cannot be properly managed when there is no clear view and understanding of its components. Management is, for a large part, the art of directing limited resources to where they are most effective and beneficial. If there is an incomplete view and only partial information, this cannot be done in any sensible manner. These preconditions could be summarized as the need for good management to be systematic and, at least to a certain extent, data-driven. With regard to legal management, a legal department cannot sensibly prioritize legal risks and opportunities if it does not have a clear view of the organization’s activities and the connected legal aspects. As mentioned before, in-house counsel are sometimes accused of having a too reactive stance, responding only when problems have already arisen. The approach that the preventive and proactive law movements advocate to counter this tendency will always require legal departments to have an overview of the organization’s legal function.In-house counsel will not happily admit that they lack a clear view.
However, it is not uncommon to find that a legal department does not have a clear idea of what activities are undertaken by a certain department or subsidiary, even if it is plausible that it may perform activities that present considerable legal risk. Not having a clear idea is one thing and can be pardoned if the department has limited capacity. However, not wanting or striving to know what is going on within the organization is unacceptable. This may be a somewhat understandable survival tactic for an understaffed department (“we did not know and they did not come to us for advice, so we cannot be held responsible”), but it is not optimal management of the legal function. Effective legal management is directing the legal analytical power and good judgment that the in-house counsel of a legal department have to offer to where it is needed most. Hence, being able to perform a basic assessment of the most important legal risks and opportunities is a precondition for effective legal management. To achieve this, a legal department should constantly be communicating with other departments and business units, analyzing possible gaps between current and desired situations.14