1. One size does not fit all
Your strategic planning process should take into account that clients’ needs will differ significantly and be subject to change. Thus, what they need and what you do will vary greatly. For example, if a company is in an aggressive acquisition mode, or implementing a new brand, or downsizing, each will drive the legal department’s plan. The strategic plan for the legal department should also consider the history/status/structure of the department (what it is and what it should be) and how that affects the delivery of legal services. Creation of the strategic plan provides an opportunity to be proactive as well as manage client expectations.
2. There is no substitute for careful thinking and planning
Although approaches vary, traditional strategic planning contemplates a progressive analysis that starts with the creation of clear mission and value statements, identifies strategic issues, progresses to the development of strategic goals and objectives, and finally to the creation and implementation of an action plan. While the process should not be tortuous or belaboured, it does require some important work that should not be avoided. Most importantly, you should understand the end goal and what you need to achieve. As two CLOs stated: “plan from the future backward” and “think before you plan!”
3. Align with and participate in the company’s strategic planning
While the sophistication of strategic planning may vary between companies, generally our business partners are ahead of us strategic planners. Use this fact to your advantage. Aligning with the corporate goals facilitates the creation of the strategic plan for the legal department (to say nothing of enhancing counsel-client relationships). For example, if the client establishes a goal to invest in a new foreign market, that goal will direct the legal department’s plan as it determines how it supports the company.
However, the legal department’s strategic planning should not simply be reactive. You should participate and contribute to the corporate planning process. For example, if moving into a new foreign market is subject to a legal and regulatory framework that makes outside investment difficult, that fact needs to be brought forward during the strategic planning process not afterwards. You need to be at the table to do this.
More mundanely, several CLOs suggested you write the department’s plan in the same style and format as the company plan to facilitate communication and alignment.
4. The right horse for your course
While we hesitate to compare in-house counsel to equines (as a U.K. CLO did), the underlying analysis remains valid. Your best lawyer may not be the best one for the jobs required by the plan. This does not necessarily mean you lack competent staff — even a Kentucky Derby winner will not perform well in the Grand National Steeplechase or as a Lipizzaner stallion. As corporate goals and legal department goals change, you must constantly reassess your department. Do you have access to the right skill sets to get the job done and if not, how will you get them? Perhaps you need more generalists and fewer specialists or vice versa. You should apply this evaluation to outside counsel as well.
5. Understand your client’s business
This cannot be said often enough as it applies to everything you do. If you do not understand how the business works, you cannot be a true business partner. This applies from start to finish, including how your client makes money, the business climate in which it operates, and the legal and business risks.
Say your client engages in a particular type of transaction that by sheer numbers is profitable for the company, but on an individual basis runs on tight margins. In your planning you will need to provide legal services that match those characteristics (e.g., securing one outside law firm to do all the transactions, but at a below-market fixed price that would not be profitable for several firms splitting the business). You need to understand the business to do this right.
6. The bottom line counts
Lawyers have a bad reputation as budget planners who traditionally argue you cannot predict or control legal costs, especially litigation. Today, most (if not all) clients reject this position. Good strategic planning requires good budget planning. Part of this process requires understanding how you spend your legal dollars and determining whether you spend them in the right places. For example, you may find others, such as paralegals or even clients with the right training, may handle the work done by your lawyers more cheaply and more effectively. Lawyers do not like to project and adhere to proposed expenditures but it can be done.
7. You are what you track: Get data, analyze, and apply it
The importance of securing and applying the appropriate metrics cannot be underestimated. Data comes in many forms — crunching numbers from outside counsel, numbers relating to transactions provided by clients, estimated hours to accomplish projects, timelines, client surveys, legal spend inside and out, as well as the number and types of lawsuits. Develop meaningful metrics, collect the data, and then use it in the planning process.
8. Culture matters
Strategic planning cannot be conducted in a vacuum. The existing culture — or even absence of an appropriate culture — must be taken into consideration. For example, if the culture of the company is to marginalize lawyers or to view them as obstacles that fact should be taken into consideration in strategic planning. Indeed, a planning goal in this instance may be to turn this culture around since it affects the ability of the legal department to be effective. Similarly, if the culture of the company is business units work in competitive silos, and the goals of the company contemplate status quo, that also should be considered in providing legal services.
9. Do not overanalyze
The traditional strategic planning process contemplates a certain analysis. However beware of getting bogged down in the details. Do not torture yourself over whether something is an objective or a goal or whether your mission or values statement is perfect. Avoid a never-ending search for the appropriate data that may not exist.
Dive in and get started with your planning and recognize your first time through the process may not be perfect. You can always start creating the data you now know you need; don’t spend time bemoaning the lack of it. Moreover, the strategic planning process is not stagnant. You will have time to correct your course moving forward, and you should do so regularly.
10. Strategic planning can accomplish other goals
For example, one CLO saw it as a great tool for team building. It could be a chance for someone to step out of their comfort zone and act as a leader where they otherwise might not have the opportunity. Finally, it can be a way to direct and implement change in a manner that allows staff to understand the reasons for such change.
This article is adapted from a paper prepared for the Association of Corporate Counsel co-authored with Deborah M. House, former ACC vice president and deputy general counsel.