Are you just another service provider?

If there wasn’t enough for in-house counsel to do in a day, the pressure is on to reduce external spend and take on projects that improve the bottom line of their internal client.
Aligning the goals of the business with the goals of a legal department is often discussed as an ideal model, but how many in-house counsel can do that while at the same time fighting against the tide of work flowing into their departments?

In this issue our Law Department Management story (see page 30) looks at an idea born out of the United States, which sees some large in-house teams bring in money owed to the business. It has served to raise the profile of in-house departments at companies like DuPont in a way that daily fire fighting can’t. In the case of DuPont, its efforts include recovery of anything in the form of cash, products, or services for the company or its affiliates through legal intervention. This includes trademark infringement to goods lost or damaged in transit.

Canadian in-house counsel seem split on whether this is an approach that could work here. The departments are smaller, for one thing, with fewer bodies to go pick battles outside their current mandate. Many just don’t see it as part of their job description.

However there is a Canadian-made model that is somewhat similar happening in larger in-house departments. At the Canadian Corporate Counsel Association’s 2012 National Spring Conference held in Montreal, in-house counsel from Bruce Power and Loblaws talked about how they are making room for projects that speak directly to the bottom line of the business units they support.

“You have to ask, ‘what is the value proposition of the legal organization?’” said Brian Hilbers, assistant general counsel at Bruce Power’s law division. “We need to provide business-oriented advice that will positively impact the bottom line of the organization.”

As Richard Stock, a partner with Catalyst Consulting, said, “This is about more than reacting to the demands of running the legal emergency room.”

Hilbers says there was concern initially from those at Bruce Power who didn’t see it as the legal department’s role to participate in activity that directly addressed the company’s bottom line.

“We look at the business plan of the company and key clients internally and attribute time to the matters of strategic interest to the company. We spend 20 per cent of our time on strategic work,” Hilbers said.

Making sure legal departments know what their goals are beyond getting the day-to-day job done is critical to mining additional value out of the department, says David Gore, vice president and legal counsel with Loblaw Companies Ltd., who also spoke on the panel.

Without a strategic plan or goal-setting process that engages with the business units, and changes from year-to-year, the legal department is just another service provider. With CFOs taking a closer look these days at what the in-house legal team is doing, it seems only logical that general counsel should be sitting down to determine what the goals and mission of the department should be — it’s the first step.

As Gore said, “The biggest hurdle is getting over the mindset of not being in reactive mode.”

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