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07 Mar 2016

What Got Us Here Won’t Get Us There: The Case for Change for In-House Legal Teams

Mick Sheehy

You are sitting around the table with other members of your Legal senior leadership team; it’s the yearly offsite. What a year. As a team you’ve collected the lion’s share of legal industry gongs for in-house teams. Client feedback is excellent and most importantly employee engagement is at an all-time high. Sure, the company is facing challenging times but the Legal group remains world class. Where do we spend our efforts for the coming year? A senior lawyer at the table reminds us that if it isn’t broken why fix it? She makes a good point, but it doesn’t feel right … why is it imperative that a best performing team cannot afford not to devote considerable effort to being better?

Why Should We Change?

We are all familiar with the modern legal industry challenge of being expected to produce more with less. That in itself is the reason why the way we work today must be improved if we are to meet the expectations of tomorrow. Large companies have been reducing legal budgets year on year since the GFC. It is not realistic that budgets track to zero but it is the case that lawyers will increasingly need to show the value they provide. To date it has been more a case of doing the same with less budget. Going forward I expect the conversation will change to what more are you doing with the same. How is your legal function moving up the value chain, ceasing time spent on low-value non-strategic work? What is the company’s return on investment?

It is also tempting to be cautious about change that might cause us to lose the secret sauce that got us to where we are today. Too much focus on maintaining the status quo ignores the fact that the environment around you is rapidly changing. Just as traditional law firms become disrupted by niche players using lower cost jurisdictions, specialist service providers and technology, so too will the ways in which corporate clients expect their services to be provided by in-house legal teams. We need to innovate just to stay still. And few would argue that the biggest asset for an in-house legal team is its people. Creating an innovative environment that leads change rather than follows it will be a competitive advantage for attracting and retaining the right type of lawyers for the future.

Change Needs the Right Resources

If you accept the importance of change then there are many things that can be done to implement it. The most important thing to do is dedicate appropriate resource to it. So many smart legal teams will agree they need to be more productive and innovative. They will spend time discussing it and identifying opportunities for improvement. But when it comes to execution, they will leave the discussion table with the good intention of getting everyone to go back to what they were doing, but this time working smarter or harder. This type of approach will rarely lead to any change. A wise executive once told me that if you are serious about change the only way to make it happen is to have someone whose only job when they turn up to work is make that change happen. In-house legal teams need to have appropriately senior and experienced executives dedicated to staying ahead of the curve on innovation and improvement.

Consider Measurement Carefully

Once you have committed the right level of resources to change programmes there are various ways of undertaking them. Most will involve a deep understanding of current work practices. It is impossible to know which areas to prioritise if you don’t understand whether they will ‘move the needle’ more or less than alternatives. We know ‘we get what we measure’ but we surprisingly often go about our work without understanding the cost in terms of internal hours spent, risk mitigated and the commercial impact. We are good at tracking external spend but we often stop there. A productivity programme can only be effective if it measures change off a clearly understood base-line. As we are expected to show our companies’ returns on investment, being able to explain improvement in these terms will become increasingly critical.
It is important to question the behaviours and processes that we value the most. They may be the keys to today’s success but they may not reflect the right ways to work tomorrow. It can be hard for us to see these ourselves so we need to know when it’s appropriate to get outside perspectives.

Stay Agile

On execution, there is much to be learnt about the fast agile prototyping techniques deployed in the field of design thinking. Quickly modelling a rough solution over a matter of weeks can be a much better way to understand whether the change is worth investing more resource to, as opposed to rolling out a gold plated change programme over many months. We seek long term strategic change that can often be difficult and time-consuming to achieve but we also need quick wins on smaller initiatives to maintain a sense of progress for those of our people working on change.

In short …

Ideation and execution can take many forms. There will be a lot of failures and hopefully some great successes along the way. But it’s critical to remember little will be achieved unless the senior leadership accepts the importance of why change is not negotiable and that nothing will be achieved without a dedicated senior resource to make it happen.

Mick Sheehy

Mick Sheehy is Telstra’s General Counsel of Finance & Strategy. With an extensive M&A background and 20 years’ experience working on transactions in Australia, US, Europe and Asia, Mick is passionate about innovation in the legal industry and the opportunities for lawyers to continually add more value to their clients.

Mick will be presenting “What Got Us Here Won’t Get Us There: Innovation Is Not Negotiable” at Legal Innovation & Tech Fest, 16-17 May 2016 in Melbourne.

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