There’s no question that in-house law departments serve an important function at companies across Canada. But because they’re one of many cogs in the corporate wheel, these lawyers don’t always get the recognition, attention, and resources that they would if they toiled for traditional law firms.

Improving your in-house department, however, doesn’t have to be an expensive or all-encompassing endeavour requiring CEO sign-off every step of the way. In fact, if you heed the advice of our panel of experts, a lot of the common sense initiatives they recommend could generate substantial savings, both in dollars and time.


1. Develop a strategic plan

Considering that law departments tend to be reactive to most things rather than proactive, the first step that needs to be taken to improve an in-house legal department is to develop a strategic plan.

Deborah House, vice president and deputy general counsel for the Washington, D.C.-based Association for Corporate Counsel, says legal departments need to conduct a thorough analysis of their operations, including an examination of their strengths and weaknesses as well as threats and opportunities.

“The point of a strategic plan is to identify what the law department needs to do to be the best law department possible,” she says.

Failure to set out a strategic direction comes with significant risks, she says.

“You will just react to the most recent crisis that has walked in your door. You won’t be pro-actively eliminating them before they get there,” she says.

For example, if a corporation’s strategic plan is to acquire a number of smaller companies to fuel its growth, the law department needs to determine its role in the strategy, whether it has lawyers who know how to do M&A work internally or if it should go to outside counsel.

“If the CEO says, ‘We’re going to acquire this company tomorrow,’ I’m not running around in circles trying to figure out how to respond because due to our strategic planning, I have the right players in place,” she says.

House says your law department’s plan should also be communicated to your clients.

“If you show them you’re doing strategic planning, it makes you much more of a true business partner with them rather than just a guy that causes overhead,” she says.


2. Collect your corporate knowledge

In-house legal departments are constantly building knowledge and generating opinions but it’s not always done as part of a coordinated effort. Tom Smee, senior vice president and deputy general counsel for RBC Royal Bank, recommends compiling a list of frequently asked questions about the company’s business and market so that other people in the firm can get the answers they’re looking for without always having to ask a lawyer.

Its team of about 135 lawyers worldwide, including slightly more than 100 in Canada, developed a list of more than 300 frequently asked questions for business people or bankers to access. If they still don’t have an answer after consulting the list, they go to a member of the legal team, Smee says.

“It’s a great efficiency-generating mechanism and a good use of the accumulated knowledge [of the firm]. There’s probably a lot of research, through no fault of anyone, that gets done two or three different times,” Smee says.


3. Hone your management skills

Lawyers are trained to know and interpret the law but heading up a corporation’s legal team also requires an ability to manage.

James Wilber, a Milwaukee-based principal at Altman Weil Inc., a management consultancy to the legal profession, says it’s important to understand that one’s management role is just as important as your legal one.

“It’s not unusual to find management is given the short shrift in the daily needs. With putting out the legal fires and the large amount of work that most law departments have, it’s a challenge for the managers to find the time to manage,” he says.

But without devoting sufficient time to the managing side of things, human resources, technology, and departmental costs will be far from optimal, he says.

He says management and business don’t tend to come naturally to most lawyers simply because they don’t have that kind of training. You can, however, get a baptism by fire by immersing yourself in the business issues of the day.

“Lawyers in a law department need to be good business people too. After all, they’re working in a business corporation,” he says.


4. Operate proactively, not reactively

Richard Leipsic, senior vice president and general counsel at Winnipeg-based CanWest Global Communications Corp., says its legal team tries to “develop antennas” to a wide variety of issues so it can be in front of them and alert management in a timely manner.

“You want to be able to sense what’s important or what’s going to be an emerging issue. Try to get out there before things get out of hand or you’re playing catch up,” he says.

This requires the development of good relations within the organization so lawyers can be the employees who learn things early on, he says.

“You have to be sensitive. Try to recognize things as emerging issues when you read them in a report or a business development plan,” he says.

Leipsic says he does his best to encourage the media giant’s business people to involve its lawyers as early as possible in various processes.

“We don’t like it when issues go unidentified or things are coming to us as a work in progress. We don’t like to be raining on other people’s parades but that happens because they’ve forgotten to get us involved early. They’ll have regulatory or legal issues they haven’t addressed and sometimes have to retool what they’re working on,” he says.

Leipsic recommends getting out from behind your desk to meet as many people within the organization as possible. Be positive and creative, he says, so you’re seen as a solution to a problem as opposed to a potential speed bump.

“It’s a question of having relationships so they’ll have confidence in you that you’ll help them and give them a creative solution as opposed to reasons why there are problems,” he says.


5. Tighten outside billing and reporting practices

Bruce Bowman, vice president of legal and general counsel at Canada Safeway Limited in Calgary, says he has long been struck by the lack of business sophistication many lawyers in private practice have with regard to billing practices.

“Lawyers will often generate a ton of work in progress, which is income to the firm, but it languishes unbilled. From the client’s perspective, that’s not in their interests. It might seem so at first blush but clients can be faced with very unpleasant surprises with many months of work having been done by the outside law firm,” he says.

Canada Safeway has implemented a mandatory monthly billing and reporting policy from the law firms with which it works to avoid such surprises, Bowman says.

“Every month I get a stack of bills from law firms. It allows me to keep track of the expenses we’re incurring but also the status of various matters, some of which I’m not intimately involved with. I find that very important, especially for a small department,” he says.

Bowman says Canada Safeway tracks the hourly rates being charged by individual lawyers and requires they keep him posted of the number of hours put in and the nature of the work being done. He cautions against being overly concerned with comparing the hourly rates of different lawyers.

“Lawyers vary tremendously in the way they record their time and in their own personal efficiency. A lawyer charging $275 an hour might actually be less expensive than a lawyer charging $200 an hour because of personal time-keeping habits and efficiencies. It’s not a scientific process. As an in-house lawyer, you have to be careful not to be slavishly addicted to hourly rates. They’re not necessarily indicative of the ultimate cost,” he says.

Bowman says because his firm has so many middle and senior management people who deal with outside lawyers on a regular basis, in-house counsel might have to intervene occasionally to make sure the personal relationships aren’t getting in the way of the company’s interests.

As such, the company forbids law firms from giving gifts or heaping lavish entertainment on its management.
“It detracts from the arm’s-length relationship we want to maintain with outside lawyers,” he says.

Leipsic is also a fan of having established policies. He says many problems can be avoided if your company’s people know the rules and what’s expected in certain situations.

For example, having a policy on file retention gives people a clear understanding of when they can destroy documents.

“It adds a lot more efficiency in the legal department. We don’t have to answer the same question 10 times,” he says.