Why change anything in a law department when there is always too
much work to do and a good deal of it is interesting. Moreover,
clients appreciate the contribution of the in-house counsel and
have no real complaints.
Innovation is not invention. It is about introducing something
new that, perhaps, has been done elsewhere. Or it is about
improving what is being done and the way it is being done. Legal
professionals do this by inclination and training.
Over the last 5 years, I have seen that many more law
departments have formal, annual business plans in place than was
the case previously. Some are developed from the bottom up after
consulting the members of the department. Too few can be readily
aligned with the company's corporate business plan and
operating priorities. All the boxes are ticked, but it is difficult
to see how the legal team leverages its knowledge of the company
and its skills to add value in the company. Lots of activity, but
the impact is indirect at best.
A key performance indicator is designed to focus resources on
priorities that will make a difference to the company and to
internal clients. The earliest editions of performance plans for
law departments always contained activities to improve service
levels and overall satisfaction with the law department. This was
pretty much the same basic approach that one would expect from a
The next generation of business plans, with KPIs and their
corporate targets were more sophisticated in that they included
contribution to specific projects, controlling the cost of external
counsel, and developing the capabilities of senior members of the
law department. Every one of the objectives had some sort of
innovation built into it. Innovation was embedded and assumed in
the initiatives or actions supporting other KPIs like efficiency,
cost-reduction, technology and knowledge transfer.
Yet in recent months, I have come to the conclusion that having
a stand-alone KPI for innovation, as well as having
"innovative" activity supporting other KPIs, is well
worth it. This is not because law departments need a longer list of
things to do or to measure. Instead, an innovation KPI requires the
leadership and members of the law department to actually discuss
innovation, to develop initiatives that make a difference in the
company, and then to invest the resources to make this happen.
There are several categories that should be priorities for
innovation in the law department. These include
shifting more of the resources from daily operational support
of business units to developmental and corporate projects that the
company says are priorities
insuring the self-sufficiency of business units with a
combination of training, systems, templates and a more limited role
in contract reviews, all with a view to boost the available
capacity of the law department by 25 %
abandoning hourly-based legal work in favour of
performance-based fees for external counsel
making sure that the lawyers and other members of the law
department has substantially challenging work most of the time
raising the proficiency of the department's lawyers in
skill areas: leadership, business negotiations, and project
management – all intended to ensure that they are not
"strictly legal" as time goes on
Innovation has several beneficial side effects: it demands
creativity; it depends on discipline to execute the initiatives;
and it is transformative. Moreover, innovation is interesting
– far more than working faster or longer hours or getting
greater discounts from law firms.
For the most part, the best innovations for a law department are
externally focussed. They are dedicated to corporate projects and
to the priorities of the business units rather than to the internal
workings of the law department. Successful innovation answers he
question "What difference do the lawyers make?"
There are now at least three national awards available for law
departments that innovate. Service and adaptability can be replaced
by innovative contributions on multiple fronts as the hallmark of
law departments determined to add value. May the best innovators
Originally published in Lexpert, April 2015
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