Strategies for Integrating Your Legal Department Into the Business Unit
To integrate legal effectively into the business units, it is critical that the legal department build relationships with the decision-makers in the business, develop channels of communication and manage company expectations.
January 06, 2020 at 03:10 PM
6 minute read
The legal department aims to be a strategic partner to the business. It can be difficult, however, to build the culture of trust and collaboration required to become a meaningful partner. To integrate legal effectively into the business units, it is critical that the legal department build relationships with the decision-makers in the business, develop channels of communication and manage company expectations. Below are four strategies that can increase the chances that your legal department will work together effectively with the business units. These insights were drawn from a lively and fruitful discussion on the topic at the Women, Influence and Power in Law conference in Washington, D.C. earlier this year.
- Build Relationships Within the Business Units
The long-term success of any integration effort will depend on building relationships with the individual decision-makers at each business unit. As a legal partner, your goal is to better understand the needs of your business, its risks, and its operating rhythms. Working side by side with the business unit team will enable you to effectively align your goals with those of your client, to support and advance the business. It will also position you as a trusted member of the team who is invested in their success.
Legal often gets a bad rap as a naysayer and an impediment to the business. This result is predictable as legal is generally consulted late in the process. By joining the business team at the outset of a new project or deal, you can identify legal issues early and suggest alternative courses of action that present less risk to the organization. This early involvement will enable you to shape the project's outcome rather than inserting a disruptive "no" late in the game.
Building trust is key to this process. This will develop over time as your client learns that you are working to find solutions that advance business goals. Ultimately, effective working relationships will enhance your ability to partner with your client.
- Develop Channels of Communication
An integrated legal department works closely with the business unit on a daily basis. You will want to get to know the day-to-day players as well as senior leadership for the business unit. Ideally, your colleagues will begin to reach out to you earlier in the initial stages of a project to help shape the outcome. For example, a labor and employment attorney might be involved with collective bargaining negotiations and disciplinary actions, long before these might lead to a union grievance or a participant claim. In an industry such as entertainment or advertising, counsel can be involved at the early creative stages, to shape a client pitch or help with pricing. In other fields, counsel can identify regulatory barriers in the early stages of product or software development.
Don't overlook the importance of building lines of communication within the law department as well. This includes collaboration with peer attorneys, who can share information about client needs and potential solutions. It also includes a clear understanding of when and how to escalate matters to a supervisor or elsewhere up the chain of command as appropriate. Law departments that are dispersed geographically may find it useful to schedule all-hands meetings at least annually, led by the general counsel or chief legal officer. Another strategy for promoting a collaborative working relationship within the law department is to assign attorneys to the boards of affiliate companies.
- Train Your Client
You want to be indispensable to your client. At the same time, you don't want to be responding to the same crisis over and over, or on call 24/7. Instead, consider teaching your client how to approach routine issues so that they don't become overly reliant on your counsel. You can also offer training on larger matters—such as contract and sourcing principles—to better position your team. Although you would typically want to be included on any contract negotiation, this might enable the business unit to better understand how to structure vendor relationships more effectively from the outset.
- Allocate Resources Efficiently Within the Law Department
Integrating legal into the business units does not require any particular law department structure. Rather, it represents a functional effort to change how legal becomes involved with the business units, and to present legal as a trusted resource. A side effect of this integration effort is that it can decentralize the legal department, to some extent. If each attorney is tasked with supporting a separate business unit, it can spread resources thin and result in duplication of work effort among attorneys. The challenge is to allocate your resources efficiently within the law department.
To avoid reinventing the wheel, you will want to identify subject matter experts and recognize where to consolidate resources within the law department. For example, attorneys specializing in tax, employee benefits, and intellectual property could be concentrated at headquarters, where they can serve as a valuable resource for the entire organization. For other specialized areas—such as privacy or contract negotiation strategy—a competency center at HQ could develop corporate policies to provide guidance to the legal department companywide. Attorneys with valuable expertise in corporate, securities, environmental, commercial litigation, and contract negotiation may be better utilized if dispersed throughout the organization, so that they can respond quickly to the needs of each business unit.
In conclusion, a harmonious partnership between legal and the business units makes sense for all parties. Both groups face similar cost constraints in most organizations. By integrating legal, the business can maintain a leaner and more efficient staff. It can also reduce litigation costs and minimize other expenses, such as business disruptions, deal break-ups, regulatory audits, etc.
Robin M. Solomon is partner in the benefits and compensation practice at Ivins, Phillips & Barker in Washington, D.C., where she counsels large corporate clients across various industries on pension and savings plans, executive compensation, and health and welfare arrangements. Solomon is a frequent speaker and author and chaired a panel at the 2019 Women, Influence & Power in Law conference titled, "Effective Strategies for Integrating Legal into Business Units." She is also an adjunct professor at Georgetown University Law Center.
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