What does the Board want from its legal advisers?
In order to avoid the temptation to be introspective, let's start with what the CEO is thinking about. The answer, of course, is very different from what the Legal department is worrying about. Any company's CEO is focussed on a few strategic imperatives. They may change over time, but at any given moment, there are not going to be many of them. In my own case, I had five.
To get a large group to achieve a difficult goal, you have to have more than a plan. You have toorganize (which includes putting the right people into the right jobs), communicate so that everyone knows where you're trying to get to and measure, so you can track how you're progressing. In the hope that a picture really is worth a thousand words, here's my suggestion of what is involved.
|What your CEO is thinking about|
|A lawyer's view of how to get good results isn't the same as a CEO's|
|Risk - keeping your Audit Committee up at night|
|The Legal Department's endless To-Do list|
What I can say with confidence, based on almost every discussion I have with in-house lawyers, is that there is a limitless demand for legal services in any business and the Legal Department often feels overwhelmed and unable to cope. This creates ambivalent feelings in most in-house lawyers. It can cause them to feel angry and frustrated, but they often like the security that comes from feeling wanted and in great demand.
|What the CEO and the Board want from their legal advisers|
First, "Execution". This is probably the element which most Legal teams spend their time worrying about - getting the job done. Whatever the job is (buy company X, enter into an alliance with Y), your CEO and your Board expect Legal to get it done, whether with internal resources or with external help. They also expect Legal not to be spending its time on things which don't matter to the company.
What are the things they do well? (1) Lawyers are very good at absorbing and synthesising complexity. They can master and marshal a large amount of detail and are undeterred by it. (2) Lawyers are extremely resilient under pressure. They are trained to argue from facts and to stand their ground. That makes them good at speaking truth to power. (3) Lawyers are able to keep confidences, something which many other professional advisers seem unable to do consistently. That means lawyers can be trusted with the most sensitive information.
Legal Departments are extremely well placed to develop further as critical components of well-run companies. If they are to do so, they need to concentrate on going beyond execution and towards insight. Based on what I hear from others, I'm a little concerned that too many Legal teams are engaged in the production of management information which is defensive in nature, intended to demonstrate how busy the Legal Department is. I'm not suggesting that MI around execution isn't worthwhile, but some of it may be wasted if it is motivated by defensive thinking.
If Legal Departments can bridge the current gap in financial understanding, they have an enormous opportunity to bring their other talents to bear in creating meaningful insights for their businesses. That will bring competitive advantage. And that really will be valued.