Canada: Law Department; Comfortable - Or Condition Critical?

Last Updated: May 19 2015
Article by Richard Stock

In recent months, the Canadian economy has been stressed. The oil patch has significantly reduced its capital programs and laid-off employees. From Target to Tim Horton's, governments from Alberta to Quebec to the Government of Canada and its 2015-2016 Budget - employers are making structural, operating and financial adjustments in response to economic realities.

Employees are feeling vulnerable. Law departments in every setting must adjust their priorities, practices and resources. Better to do so in anticipation of change rather than as a defensive reaction to change. Law departments have come into their own over the last 25 years. Internal clients are used to having them around--- as part of the fabric of the company. But are they nimble enough? Are they goaltenders or on the front line seeking out ways to add value? In too many cases, the law department is too "comfortable" with what it is doing and how it is doing it.

It has been nearly 15 years since two dozen GCs gathered in New York City to set out what they then considered to be the Critical Success Factors (CSFs) for a progressive law department. Their 17 CSFs were anchored by 52 constituent elements or statements. Although the factors and elements now need a little upgrading half-way into the second decade of this century, they are still relevant in many ways. Tough economic times and difficult working environments challenge the Chief Legal Officer must ensure that the business plan for the law department is up to the test.

There are 6 CSFs that I believe are particularly relevant to Canadian legal leadership. The factors are equally important and worth considering along with their supporting elements. Each CSF should be assessed for compliance on a 10 point scale by scoring its constituent elements. My report card follows.

CSF—A trusting and effective working relationship with the CEO, executive officers and clients.

There are five elements or statements in support of this CSF:

  • The CLO has frequent dialogue with the CEO
  • Executive officers are briefed on the steps the law department is taking to align itself with company objectives and business
  • The CLO creates opportunities for lawyers to work with executive officers
  • The CLO monitors the quality of the relationships between lawyers and executive clients
  • Client satisfaction surveys are conducted

In general, I would not give Canadian law departments a higher score than 4 for this critical success factor. The highest mark is awarded for monitoring working relationships with executive clients. Client surveys are conducted by fewer than half of law departments and this is done on an irregular basis. The other elements of this CSF are informal at best and rarely documented. In summary, law departments are much too passive in managing internal relationships. They must make the time to plan and do so.

CSF—There exists an effective strategy for integrating lawyers with client/user management teams.

Four elements support this CSF:

  • Significant business unit management teams include a lawyer as a participating member
  • Lawyers have a formalized role in new product development processes
  • Lawyers review and contribute to annual business plans
  • Legal teams review major policy decisions before they are announced

Law departments score better on this factor than they did three years ago. Increasingly, business units have in-house counsel attend their meetings and review major policy decisions. However, they are seldom called upon to contribute to business unit annual plans on a systematic basis. The main barrier is the limited availability of in-house counsel for other than urgent legal work. Overall, Canadian law departments deserve no more than 6 out of 10.

CSF—The annual and long-range plans of the law department are closely aligned with corporate objectives.

Three elements anchor this CSF:

  • Written annual and long-range plans with objectives are explicitly linked to corporate objectives
  • Evidence exists that the legal team works with clients to identify a joint long-range plan
  • The assumptions about legal issues driving the business environment are identified in the plan

Most law departments have written annual plans. But fewer than 20% of these departments have written long-range plans for the law department and only some of their objectives are closely aligned with corporate objectives. Planning assumptions are rarely documented and not supported by multi-year forecasting of the demand for legal services by volume, type and complexity. Law departments do complete corporate planning forms but remain poorly aligned and reactive in deploying their resources---deserving only 5 out of 10.

CSF—The law department has effective budgeting processes and financial reporting systems in place.

There are three elements:

  • There is agreement on a comprehensive reporting format for financial reporting by the law department to its clients
  • Procedures and systems are in place for the law department and external counsel to collaborate on budget management
  • Clients monitor legal spending and provide imput

Few law departments record time by matter and clients. Even without this law firm type of activity, quarterly reporting to clients of the consumption of legal resources seldom occurs. Legal project management and budgeting with external counsel remain in their infancy. Overall, law departments deserve a score of only 3 out of 10 for failing to move beyond discounted hourly rates with external counsel.

CSF—There is a strategic sourcing approach to external counsel retention and management.

Two elements are sufficient for this factor, given the hard-wired and relationship-based nature of law departments with external counsel:

  • The law department retains external counsel based on strategic alliances, competitive bidding and performance evaluations aligned with core competencies used to evaluate inside counsel
  • Billing data is used to identify and reinforce use of best practices

General counsel tend to avoid competitive processes to retain external counsel. They are not at ease with preparing specifications, drafting RFPs, alternative fee arrangements, project management and negotiating with preferred counsel. This is in part because they fail to examine billing data, to intervene in law firm business practices, and to make the time to do so. There is much more formality to sourcing professional services in banking, most levels of government for some corporations. However, even with these, there is precious little innovation and risk/reward sharing with multi-year partnering agreements. Law departments receive 4 out of 10 points for this factor.

CSF—Professional development initiatives are focused on current and future core competency requirements.

Four elements are in play:

  • Development is focused on core competencies for lawyers and paralegals
  • Future talent requirements are forecast
  • Career path plans and management/leadership skills development tracks exist
  • There is multi-source feedback on individual performance

Public companies and most levels of government benefit from strong HR support for this factor. This is less true in other settings. Core legal competencies are not identified by experience level. Law department demographics are poorly aligned with work type and complexity. Multi-source feedback, especially client feedback tends to be of the "walk-about" variety. Best practices warranting a perfect score of 10 can be found in Canadian law departments. But most GCs do not invest enough time to develop their own competencies and those of the law department, defaulting instead to a "survival of the fittest" form of professional development. The overall score is 5 out of 10 for this factor.

With scores like these, the condition of many law departments is critical. There is much work to be done.

Originally published by CCCA Magazine - Spring 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions