Planning for the year ahead

Planning for the year ahead
In-house counsel are expected to provide legal advice — but nowadays that’s just the beginning. They’re also expected to add strategic value and advance the goals of the business.

But if the legal team is spending all of its time putting out fires for the business units, there’s not a lot of time left over to focus on strategy. A business plan can help create an alignment of priorities and plans with the business focusing more on longer-term strategy.

Oftentimes the organization itself has a business strategy, but the legal department doesn’t — at least not one that’s written down, says Richard Stock, founding partner of Catalyst Consulting.

“Most legal departments don’t reduce it to a formal plan with targets; they do it more intuitively or in reaction to things,” says Stock. But coming up with a formal business plan isn’t difficult, he notes, and it offers a number of benefits. “It gives you focus, it injects discipline and accountability, and there’s a higher probability that you’re going to achieve what you said you’re going to.”

These days, putting out fires isn’t enough. A business plan can help improve performance and showcase the value-add a legal team brings to the business. But it’s hard to improve performance without a plan, says Stock. “Ask any athlete or high achiever — luck isn’t enough.”

A legal team doesn’t want to be seen as a cost or overhead to the company — it wants to be seen as adding value. Good lawyering is table stakes, says Greg Porter, vice president of legal with Telus. But in-house legal departments should also be looking to advance the strategy of the business.

At Telus the executive team outlines objectives and priorities for the organization, and team members align around scorecards that succinctly identify “SMART” objectives. SMART generally means being specific, measurable, achievable, results-oriented, and time-bound.

This year, its legal team also adopted a scorecard approach. “In the past we had spent a great deal of time creating a cumbersome business plan that identified priorities we would follow in supporting the business,” says Porter. “We decided this year we’d create a scorecard on a single piece of paper outlining the key objectives, metrics, and priorities for the legal department.”

The chief legal officer and each of the company’s VPs have a scorecard that cascades objectives through to everyone on the legal team.

In-house priorities include Telus’ “customer first” commitment, operational efficiency objectives (from annual internal customer surveys), and team member growth and development objectives. The legal team has also adopted specific key objectives from internal customers’ scorecards to reinforce the company’s collaborative focus.

“We exist to help our Telus colleagues advance the strategy of the business,” says Porter. “We ensure that we’re constantly aligning our objectives with our internal clients’ priorities. You have a lot of people running around with their hair on fire with things that need to get done, so prioritizing is key.”

This involves meeting with internal clients on a regular basis. “We think it’s really important to be involved in meetings and not just off in an ivory tower,” says Porter. “We encourage team members to closely work with the business and attend overall strategy sessions and gain insight into their priorities.”

Results are reviewed quarterly against the scorecard, allowing for early course correction; an annual performance bonus is connected to personal performance objectives on scorecard results.

The scorecard approach can call out legal where they’ve not only facilitated the business but also advanced the business. “We don’t want to be seen as overhead, as a cost centre,” says Porter. “We’d like to highlight the instances or a-ha moments where we’re advancing Telus corporate strategy, so we’ve been asking team members to capture items of value-add and then we’ve prepared a mid-year report.”

So far, the scorecard approach has been well received; the legal team appreciates the simplicity of a single page that captures their main objectives.
And the SMART approach keeps them objective. “We stay away from the subjective,” says Porter.

Not all legal departments have taken such a formalized approach, but still recognize the need to set goals and objectives. Overwaitea Food Group, for example, doesn’t have a formal business plan in place for its legal department and takes more of an informal approach.

“If there was a one-size-fits-all, everybody would be doing it,” says Donald Eng, general counsel with Overwaitea Food Group. “We don’t want to be too structured.” For him, it’s more about being flexible to accommodate the company’s needs.

“That being said, it’s not like we’re running amuck like chickens with our heads cut off,” he says. “Although we don’t have a formal business plan in place, we do have goals and targets, (and) our key objective is to ensure we know what our organization is doing on a day-to-day and long-term basis.”

This means getting involved as early as possible in any business dealings — and at the highest possible level. “We always try to get our fingers in the mix as early as we can so we can offer guidance on a legal perspective,” says Eng.

But this does involve a change of mindset — one that isn’t going to change overnight. In most cases, people only go to the legal department if they need legal advice. So, for in-house counsel, changing that mindset means being proactive — from attending meetings to having ad hoc discussions to listening into the proverbial grapevine. “We don’t want to put out the fires, we want to be there in advance and hopefully avoid fires,” says Eng.

The legal team can also serve as a bridge between departments to ensure there’s proper alignment with company-wide contract terms and overall corporate goals so “when you sit down with a particular department, you’re not just looking at it in a vacuum,” he says.

His legal team is proactive in going to the business units and asking them what their needs are, and then providing specialized seminars on topics of interest ranging from software licensing to privacy. The team also does lunch-and-learn seminars that are open to the entire company.

Once people see the business value of the legal department they start turning to legal at the beginning of the process, rather than when something goes wrong. “Let them see the value you can add to whatever it is you’re doing. If they don’t see value, they’re not going to call you,” says Eng.

For Port Metro Vancouver, a quasi-government organization, having a five-year plan is mandatory under the Canada Marine Act (there are 18 port authorities in Canada governed by the act). “We make sure we stay in those parameters,” says Dean Readman, director of legal services and corporate secretary with Port Metro Vancouver.

Each year, its board of directors has a brainstorming session in the spring, followed by a strategic planning session with key executives across the organization, including legal. This involves looking at how they can advance certain goals and priorities over the coming year, as part of its rolling five-year plan. Over the summer months, they fine-tune those objectives; in the fall a plan is drawn up for resources and the business plan is approved in December.

“Instead of putting fires out we try to give strategic advice throughout the whole process,” says Readman. “I look at what could go wrong and how we can add value from the beginning of the process to the end.”

Setting goals and objectives is particularly important with a smaller legal team; Readman’s team consists of four staff lawyers and himself. “We don’t have to go to every meeting, as long as we keep informed and stay on a prudent path,” he says. “We can add a lot of practical advice and strategic direction, not just legal advice.”

There are a number of approaches to developing a business plan, depending on the organization and its needs, but Catalyst Consulting’s Stock says the initiative should come from the head of the legal department. “The business department isn’t going to issue invitations,” he says.

But it’s also critical in-house counsel get input from the business departments — and that means most likely they’ll have to take the first step and initiate a conversation.

Typically a business plan should be done every year, says Stock, and the process should start three months before the beginning of the fiscal year, which is when the business departments are typically planning for the year ahead.

That means fanning out and finding out what those priorities are. “Sit in on those meetings, so you understand the priorities and which you are likely to be involved with,” says Stock. “Those become part of legal’s goals and objectives for the year.”

This should not be confused with the mission statement of the legal department, he added. A business plan should set out your plans for the coming year, taking a customers-first approach. But that’s just a start. It’s also about how to make the legal department smarter, better, and faster. And it’s about training and knowledge transfer of the legal team, as well as managing costs.

“It’s not a list of New Year’s resolutions,” says Stock. “They’re New Year’s resolutions accompanied by specific targets.” And measuring and meeting those targets can help in-house counsel become a more indispensable part of the business.

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