GCs: relaunch, don’t cut, your law department cum-COVID-19

Everyone is talking about post-COVID. This is wishful thinking. There will be no post-COVID. Ever. Vaccine or no vaccine. As one client put it: it will be forever “cum-COVID”, not post. We will live with this pandemic and its impact for the foreseeable future.

As after World War II, nothing will be the same again. Only worse. At least during that war the foe was in plain sight and the pubs were open.

COVID-19 has changed everything. All the assumptions in your organisation’s target operating model are now up for questioning.

  • How, will your customers’ needs have changed? For they surely will.
  • How therefore will your strategic resources required to meet those changing needs, in turn, need to change, especially your people? And how will these have changed, irrespective of changes in your customers’ needs?
  • How, therefore, will you alter your strategic processes to apply your resources to your customers’ new demands?

As if these questions were not enough, the fundamentals of capitalism, already under scrutiny pre-COVID-19 via the ESG and other movements, will come under accelerated pressure as the societal consequences of the size of state bail-outs of businesses in furlough and other schemes become clear.

One consequence is that your organisation will come under accelerated pressure from society – which includes you, the people who work for your organisation, who buy from it, who sell to it, who sue it and are sued by it – to prioritise the environment, society and governance issues before profit.

The society Genie is not going back into the business bottle. COVID-19 is the final nail in Milton Friedman’s coffin. And if you doubt this ask yourself why the Black People Matter campaign took off so instantly, so virally, and so viscerally, given that Mr Floyd was not the first victim of police brutality and mobile phones have been around for some time?

One part of the answer is, as an Observer editorial pointed out, that “…The disproportionate impact of the virus on black people, in terms of death and infection rates, has unforgettably dramatised the corrosive inequality at the heart of American society.”

So, when this phoney war against the virus is over – by phoney I mean when the furlough money, cash balances and state intervention monies are all gone – we will have the mother of all depressions with unprecedented levels of unemployment – and in those circumstances, society will not tolerate extreme Friedmanesque behaviour by any organisation. And it won’t be polite about it. And society includes you and the people in your organisation.

So, it’s against this dystopian background that you are leading the legal function in your organisation. You are the CEO of Legal whether you have a team or whether you are a sole GC or Head of Legal and whether you like it or not.

You may be tempted to react to your organisation’s inevitable call for cuts by faithfully taking an axe to your legal budget, doing even more for even less and performing the “diving catch” more frequently and more masochistically than before.

Don’t do it. You, your organisation and society will regret it. Don’t cut. Instead, relaunch your law department using these seven steps and remembering that your purpose is to enable better decisions using excellent legal counsel and process. You are now mission-critical to your organisation’s cum-COVID-19 survival.

  • Step 1: help your organisation relaunch it’s “PSB” – its purpose, strategy and behaviour plan
  • Step 2: decide, don’t ask, what ten things the business needs in terms of legal counsel and process to relaunch itself
  • Step 3: set up a Legal Operating Board which includes “non-lawyer” experts in finance, IT and internal communications to run Legal as a break-even business
  • Step 4: sell to your Board the purpose of Legal as an enabler of better decision-making for the good of society and “the business” in the light of COVID-19; be ready to walk away if they don’t buy it; you’d be unwise to stay in those circumstances, and don’t bluff
  • Step 5: invest in relationships with Law firms to help you negotiate the gap between you and the C-Suite; if you say there’s no gap then you are part of the problem
  • Step 6: negotiate a business plan, using zero-budgeting, with “the business” which meets its needs and its responsibilities to society while honouring Legal’s purpose
  • Step 7: acknowledge that you the GC are the CEO of Legal, whose job is to deliver the ten things for ten dollars and not ten for seven.

I have set these steps out in more detail in my ebook InHouse TOM – a new target operating model for the law department, law firm & C-Suite relationship which you can download at https://www.ciaranfenton.com/downloads-tools.

Also you should read Section 4.12 of the recently published Mayson Report if you want to get ahead of the direction of travel of legislation in the provision of legal services. Recommendation 20 of the Report is that law departments be the set up as separate business units.

Currently I am facilitating the implementation of these steps with a number of GCs in the UK and in the U.S.A.

Please email me at cfenton@ciaranfenton.com if you would like to hear more.

Ciarán Fenton

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