The Management of Legal
Many general counsels have reacted to executive pressure by measuring and managing legal performance and by trying to involve legal in strategic business decisions. Pauleau, Collard and Roquilly[36] write:
The legal performance of a company can be understood in two different ways.
In a narrow sense, it refers to the performance of its LD, in other words the capacity of that department to achieve its own missions and objectives. (...) A broader - and perhaps more appropriate - understanding is to see legal performance as the company's ability to deploy legal resources (especially intangible resources such as a specific legal capability) and combine them with the other types of resources at its disposal in order to achieve its objectives, in particular its strategic objectives. In this sense, legal performance can be considered as an important factor in the overall performance of the company. And the performance achieved by the legal team significantly contributes to the legal performance of the company as a whole.Bassli[37] emphasizes that general counsels must pay more attention to financial metrics and business planning, for example by questioning traditional models of engaging and paying for law firms, and by considering managed services as an alternative:
Switching from a traditional hourly based billing model to a managed legal services model yields business benefits for both sides of the engagement. One benefit that immediately comes to mind is the predictability of a recurring monthly billing. A flat fee for services eliminates the peaks and troughs of normal hourly billing, making forecasting easier and more reliable for both parties.
Meents[38] cautions against a purely cost focused approach in managing legal and emphasizes the importance of delivering effective services that secure value realization and prevent value leakage:
Measuring cost is important. Legal functions need to be more efficient, and their failure to do so has only increased the level of scrutiny they face.
Almost all commentary on legal departments, to date, has focused on the cost of legal and its failure to leverage technology and alternative ways of working. However, if everything is viewed only through the ‘cost lens' then effectiveness is often overlooked - and ‘value' not understood.The orientation towards finances and performance also brings up the question if future general counsels must be lawyers at all, as asked by Hartung and Gartner[39]:
Nowadays, most GCs are lawyers. Is this a necessary prerequisite for a GC? Rather not. The GC has to advise the board on the best, or most appropriate, way forward with regard to risk and compliance management. Many legal and/or regulatory questions have to be taken into account. However, a GC who only focuses on legal issues would miss the point. Hence, being a lawyer can be one of the preconditions of being a good GC but it is not a conditio sine qua non.
Finally, Chomicka[40] points out that the separation of tasks from education not only allows non-lawyers to work in legal, but also enables lawyers to work in other lines of business, thus creating new job opportunities:
What if a contract administrator, contract manager or even a project manager, rather than a construction professional with an appreciation of legal issues, happens to be a law practitioner trained in basic construction ‘stuff'?
4.2