Aligning the legal department with a company's strategy, vision and values | Practical Law

Aligning the legal department with a company's strategy, vision and values | Practical Law

This note is aimed at a new head of legal or general counsel and suggests ways to help you develop your legal function's strategy, mission and objectives. This will help you to support your organisation and elevate the legal function from a mere problem solver to a genuine business enabler.

Aligning the legal department with a company's strategy, vision and values

Practical Law UK Practice Note w-009-4002 (Approx. 7 pages)

Aligning the legal department with a company's strategy, vision and values

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This note is aimed at a new head of legal or general counsel and suggests ways to help you develop your legal function's strategy, mission and objectives. This will help you to support your organisation and elevate the legal function from a mere problem solver to a genuine business enabler.
Aligning your department with your organisation's strategy, vision and values takes time. You need to understand how your organisation operates within its legal and competitive frameworks, and how they both shape its strategic goals. You also need to consider your team members and align their roles with your department's aims. Finally, you'll need to communicate your objectives simply and clearly to your colleagues and show them that you are serious about making a meaningful contribution.

Make your department mission critical

The first step in aligning the legal department with the wider organisation is to review the organisation's business and market sector, and understand:
  • How its offering differs from that of its competitors.
  • The organisation's relationships with its customers and suppliers.
  • The means of development and production.
  • The distribution chain.
  • Any critical infrastructure or other resources.
Next, identify where legal activity is focused, for both in-house and external lawyers, and other legal service providers. Consider how this corresponds with the organisation's activities and, in particular, with those areas that are both key to the organisation meeting its objectives and which involve complex, fast changing or high business impact areas of law. This will help you assess how the legal team is supporting the organisation and identify any under or over-serviced areas. It will also highlight whether you're directing your resources and efforts to the people and areas that need them the most.
Study the financial and management accounts of your organisation to find out exactly how it makes its profits and where it spends or invests most (for further information, see Practice note, Demystifying company accounts). Look at the market your organisation operates in and find out what its competitors are doing. As well as having an impact on your organisation, this could highlight industry-wide legal issues. For example, which new markets are your competitors moving into? Do you have the resources to support your colleagues if they wanted to follow?
Take time to evaluate the organisation's culture and how your colleagues use the legal function. For example, do people regard you as either a mere provider of legal advice in a crisis or a genuine business enabler who should be involved in big decisions at an early stage? Also analyse whether you could improve your communications with senior executives. For further information, see Practice notes, Communicating effectively: fundamental skills for lawyers and How to influence the board effectively.

Review the company's strategy and mission statement

It is vital that you get to grips with the organisation's strategic plan and mission statement. If these aren't documented, ask senior executives to articulate the vision and summarise the main elements. This will help you make decisions about the legal function and define your own departmental mission statement. Ensure everyone in your department understands the organisation's goals and the role each business unit plays in achieving them.
Similarly, aim to be involved in the corporate planning process. You need to understand why decisions are made and, at the same time, provide valuable input that will not be available from other departments. For the same reasons, encourage your team members to participate in planning activities with the business units they support at departmental level.
The benefits of your involvement in planning and strategy work both ways. You will be able to raise legal and regulatory considerations at an early stage, and set realistic expectations for timescales and costs. You can also use your legal knowledge to help senior management exploit opportunities that they may not yet have considered or manage previously unidentified threats. In turn, senior management will appreciate the constructive role that you and the legal team can play in the organisation's commercial business.

Take soundings from your colleagues

Listening to your colleagues' ideas about the legal department's strategy and objectives is essential. Although you won't want to end up with a laundry list of disparate business needs, this process will help you get a good understanding of common requirements across the organisation. It can also help you align your view with your management colleagues about how to prioritise your scarce resources when working with them over each financial year.
Start by speaking with senior managers and encourage your department members to do the same with their key internal client contacts. Depending on the size of your organisation and your budget, you could also carry out a formal survey. However you gather the information, the increased communication with colleagues beyond the day-to-day provision of legal advice will improve your relationships and strengthen those ties. It will also help you to plan ahead, so that your team can be effective and efficient, rather than over-worked.
Encourage your team members to share their ideas and perceptions about the legal department and how it can satisfy the wide-ranging needs across the organisation. Share the information you glean from your review of the organisation and its strategy with them.
Gathering information in this way may be time-consuming but it will help identify any potential roadblocks and concerns within the organisation and your department. For example, you may not have the skills to support a new business initiative and will therefore need to recruit temporary project or permanent staff or retrain existing staff. It will also help build a departmental consensus, making your strategy more cohesive and relevant, and your prioritisation decisions more aligned with key business needs.

Create your departmental mission statement

Your departmental mission statement can be the starting point for developing the legal department's strategy, objectives and plan. It is your department's statement to itself, and the rest of the organisation, about what it will deliver and the role it will play. Your mission statement will act as a guide and a framework for the department's objectives and help your team interact with internal clients. It should reflect the organisation's wider strategy and take input from senior executives into account. Your mission statement should consider:
  • The organisation's needs and perceptions of the legal department.
  • What you can realistically deliver.
  • The benefits you can offer the organisation through your department's skills and competencies.
Review your mission statement regularly to ensure it remains relevant.

Set your objectives

Although it may be tempting to demonstrate the value of your department by setting out a long list of objectives, be wary of this approach. It's far better to set a few high-value objectives and achieve them all. Remember that your business colleagues won't measure you on the number of targets you hit but on the value you bring and the contribution you make in helping them to achieve their goals.
Always prioritise activity that will bring the highest revenue or cost savings to the organisation and support its strategic initiatives. Try to ensure that this prioritisation is shared and agreed with management. This approach greatly improves your team's relationships with its clients and frequently helps you to make the case for more resource as your clients appreciate how effective and efficient your team are.
Examine the complexity and cost of each objective and avoid burdening your department with goals that are too complex, uneconomical or broad in scope. Instead, make then SMART:
  • Specific.
  • Measurable.
  • Actionable.
  • Relevant.
  • Timely.
Share your objectives with your team members and develop their individual key performance indicators around the departmental aims.
Track your department's performance against its objectives throughout the year and again at year-end when you start planning for the next year. This can be very helpful in budget and resource planning sessions with management as you are using their "language" (numbers) to make your case. Objectives rarely remain static as new issues regularly emerge, so remain flexible. If you miss some of your targets, don't consider it a failure. It's more likely a sign that priorities have changed, and you have adjusted accordingly. As you move into next year, take your learnings from this missed target into account.

Share your plans with the organisation

Don't be shy about sharing your mission statement and objectives with the organisation; tell people about the commitment you have made to supporting them. Use your organisation's language, terminology and tone of voice when you write your mission statement. As well as creating a seamless fit with the wider plan, it will make it easy for colleagues to understand and absorb it. Also explain how each objective will support the organisation's strategy and objectives. Provide senior management with regular progress reports, whether they request them or not, as this will demonstrate that you are serious about being a valued business partner.
The Centre for Legal Leadership provides education, coaching, mentoring and related career support services for in-house leaders to get the best performance from themselves and their teams.