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 Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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