Last year, as companies tightened their fiscal belts, few legal departments avoided budget cuts. That has meant general counsels being asked to do more or the same level of work with stagnant budgets.
A panel of GCs and legal operations executives discussed how to do more in a flat budgeting environment by finding ways for their legal departments to stretch their allotments even as business demands increased.
Get your own budget
“Make sure you have a budget — some [companies] don’t apply a budget to the legal department,” said Megan Fouty, GC of Glowforge, a Seattle-based 3-D printer manufacturer. “Advocate for your own P&L.”
Fouty and the other panelists spoke October 8 at the Association of Corporate Counsel conference in Nashville.
To help with that argument, GCs should collect detailed metrics on their departments’ financial achievements — everything from settlements negotiated downward to contract workflows streamlined to outside counsel tasks brought internally.
“Come with data,” said Fouty, who moved in-house from a law firm. “Then you can demonstrate your return on investment.”
Partner with your CFO
Lawyers tend to love words and finance people generally operate with data — and it helps to speak the language of the people who oversee your budgets.
“Finance people really do love numbers. They love data and tables and charts,” said Nikki Rahimzadeh, senior director of legal operations and strategy at Analog Devices, the semiconductor chip maker. “It really does help to build the relationship to speak to them in that way. Being conversant in finance terms is absolutely mission critical.”
Another important lesson: Don’t be difficult, said Brittany Leonard, the GC at Civix, a technology company. Being helpful will pay dividends.
“If you are a jerk to other people in your business units they’re not going to want to help you,” she said. “The more you’re hostile and don’t want to work with others, you’re not going to get what you need down the road.”
Decline work
GCs also need to align their teams’ workloads with the needs of the business, and not let other parts of the business migrate tasks to legal that other departments should handle.
“You have to make sure that the team understands that there are expectations on them around what they do,” Rahimzadeh said. “Most in-house people love their jobs because they love working with their business clients and it’s hard to tell them no.”
Find pain points
Every team has some process or function they consider a hassle. Find the ones that your team can address, said Elida Moran, director of legal affairs for T-Mobile USA. “For our internal clients, what are the pain points?” she said. “Is it getting an NDA?”
Sometimes, a quick process change can help a team outside of legal become a “self-serve” operation for a routine matter or a basic nondisclosure agreement, Moran said. At other times, having proper data can help rebut contentions that a particular delay is the fault of the legal department, when it might have been with the customer or other business unit, she said.
Understand your spending
Department leaders should take a deep-dive approach to their expenditures and make sure they understand where their budgets are going. “Do you need a lawyer to do this work or do you need a white shoe law firm to do this work?” Rahimzadeh said.
Many companies also fail to monitor their outside counsel and what work they’re doing — and how quickly they’re doing it, Leonard said.
Set expectations
If the budget means annual raises are likely to be flat, and bonuses nil or modest, it’s wise to align the team with the company’s broader performance. Employees will want to know why compensation has been affected, and managers should be ready to explain the financial drivers.
“Is this a bad quarter, or are we in a slump that we’re going to have to ride out for a while?” Rahimzadeh said.
