CEOs & CFOs: 7 reasons to pay more attention to your Legal function, urgently

legal-department-operations-meeting1

Last week I was asked to speak to 180 in-house lawyers at a conference at The Law Society in London. Last month I spoke to a similar number from across the world at an ACC conference in Rome. I have spoken at and attended similar conferences over the past five years or so. I have also worked with many in-house legal teams on improving performance and leadership. So from these experiences and as a non-lawyer, ex accountant and former divisional managing director I offer the following seven reasons why CEOs and CFOs should pay more attention to their Legal functions, urgently. I acknowledge that what follows are generalisations and that behaviour varies significantly but I believe, based on extensive observation, I’m not far off the mark:

  1. In-house lawyers refer to you as “the business”. This should worry you. Other functions use the same terminology. But with lawyers it’s different. They use it as a protective, distancing and exclusive term. I don’t blame them. Sometimes you don’t make it easy for them to feel fully inclusive. This isn’t good for your business.
  2. They refer to themselves as “in-house lawyers”. Why the qualifier? Do you refer to yourself as the “in-house CEO” or “in-house Finance”? No you don’t. But does the language matter? Yes, because I believe it is symptomatic of their desire to maintain an umbilical chord to private practice. They use it because they don’t feel safe. You don’t make them feel safe. The function has not fully settled into corporate life in the same way as Finance, Marketing, Sales, Operations and IT have. Like HR, Legal is sometimes the Cinderella of the Executive Committee and, frankly, you have to shoulder some of the blame. Blame aside, ‘tis not good for your business.
  3. The dogs in the street are talking about “disruption in legal services”. But this has gone over the heads of most lawyers. Again this is not their fault. They’re not trained to engage with anything that is not capable of cold logical analysis. And, let’s face it, “disruption” is as woolly as an Aran cardigan. And so they don’t get it. But their Ryanair moment is coming, and they won’t see it before it hits them. At the ACC Conference in Rome they talked about wanting to “own” the disruption. Yet, apart from a few a-typical lawyers, there’s no sign of any Mick O’Learys amongst them. As a CEO and CFO you know that second guessing disruptive behaviour in the market is absolutely critical. My view is that the disruption won’t be technological –although that will assist – but there will be a revolution in lawyers’ behaviour in the provision of legal services. Whatever happens, if you are letting the preparation for disruption entirely to your lawyers – this could be very bad for your business indeed.
  4. But by far the biggest mistake you are making is that you are asking them to do ten things for seven dollars when ten things cost ten dollars. I wouldn’t mind if they said “No”. But they don’t. They persist in doing ten things for the seven dollars you give them. Why do they engage in this masochistic behaviour? Why do they perform the “diving catch” endlessly? They do so because they are trained to “get it done”. Their identity is tied up with execution. They would prefer to stay up all night writing a deliverables appendix to a contract that “the business” should have done rather than miss the signing deadline. But this behaviour is lethal for your business. If you think you are getting away with it, you’re not. This is a ticking time bomb for you. Serious risk lurks for you in the “10 for 7” fudge. You must know what value they should and are capable of providing to your business. They don’t because they are not trained in communicating value. You must allow them off the hook of providing the three things you are not paying for. Not doing so will be bad for your business sooner, or later.
  5. Stress amongst in-house counsel is the smelliest elephant in the room. A number of observers – Paul Gilbert in particular – has been warning patiently about this for a long time. It’s being ignored. Lawyers are trained – I’m sorry to keep banging on about training, but it’s true – to work extremely hard and not to complain about the hours. It’s what they do. But they are poor at dealing with “soft issues”, in themselves and in the people they lead. They are not natural leaders – although there are exceptions. In addition, their career structure is miserable. The only way up is to lead and manage. Most of them hate that. They love the law. So many are stuck under GCs who won’t and can’t move. And this, I’m afraid, is totally your fault. Your job as leaders is to create an environment in which people thrive. Well I’m afraid you get a C- for your progress within the Legal function’s career structure. It’s a mess. You have imported lawyers into your business for perfectly good selfish reasons but you’re not taking care of them, never mind leading them. This is bad for your business.
  6. The purpose of “the business”, that of the Legal function and of individual lawyers are all inter-dependent. There is little evidence – just attend any legal conference if you don’t believe me – that you have all got around the table to thrash out a shared purpose. But if you did, you would then have some hope of finding a shared strategy and agreeing behaviour and plans to implement it. These are the core elements of a target operating model. And I’m afraid that Legal has no generic TOM. This is very bad for your business.
  7. Finally you are, as the Americans say, “leaving so much money on the table” by not paying attention to these matters because Legal is, invariably, not run as a business. In-house lawyers know much more about your business than you think they do. They have an angle and knowledge that’s going to waste. This must be bad for your business.

If you would like to know more or get involved it the debate, I have written on these matters in a pamphlet about the GC-CEO relationship which is available for download on Amazon and in paperback at Success Store. I’m also hosting the first ever  ♯50/50LawyerTheBusiness Conference at the IOD in London this September. Every lawyer must bring a colleague from “the business” and every non-lawyer must bring their “in-house lawyer”, if they dare.Main Pic Law Society Conference June 2016

Ciaran

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