26/05/2013

London Corporate Training

The Legal Department

Presented by:
Geoff Truman

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London Corporate Training

Polite Reminder

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London Corporate Training

Today’s Objectives
By the end of today you will be able to:
• Describe the functions of the corporate
legal department
• Demonstrate how you add value to the
company’s performance
• Reduce corporate risk
• Show how corporate legal performance
can be measured

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London Corporate Training

Today’s Programme

• Typical functions
• Adding value to company
performance
• Reducing corporate risk
• Measuring corporate legal
performance

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London Corporate Training

An Elevator Pitch
• How would you describe what your legal
department does if fate placed you in an elevator
with your new Chief Executive and you only had
the time it takes to get from the top of the
building to the bottom" – approximately 30 – 60
seconds?
• This is known as an elevator pitch
• Your exercise is to individually produce a written
version of your pitch and to deliver it to the rest of
the participants.

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Corporate Legal Departments …..
• Help the business grow
• Keep the business and its employees
out of trouble
• Manage litigation
• Ensure regulatory compliance
• Partner with other functions which
generate legal issues
• Meet commitments as a function.

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London Corporate Training

Legal Work

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London Corporate Training

Today’s Programme

• Typical functions
• Adding value to company
performance
• Reducing corporate risk
• Measuring corporate legal
performance

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London Corporate Training

Legal Departments Add Value by ……
• What are the typical objectives of a corporate legal
department?
• The goal—to be a corporate service that adds to, not detracts
from, the company’s bottom line (but it is still a work in
progress)
• Does that mean corporate legal services should be a profit
generator?
• How is the legal department going to assess value
• As with most things, the fundamentals are critical. Then, it is
about basic strategy, execution, and continuous improvement

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Corporate Legal Departments – Work Focus

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London Corporate Training

Value Creation Fundamentals
• Know the business you serve to the
same degree or better than other
business managers, and understand
its value creation drivers
• Be fluent in business as a second
language
• Assess the processes and resources
available through the business and
leverage them to good advantage
• Build a superior team of people.

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The Expenditure Budget
• How can you leverage your
expenditure budget?
• Cut costs - manage legal spend
• Develop new approaches to routine
work processes. Reducing cost frees up
budgets to address higher priorities
and lowers the hurdles to productivity.

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London Corporate Training

Inside Lawyer versus Law Firms

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Skills

• What skills do members of a

corporate legal department
need to have in order to
“add value” to the
organisation?
• Discuss in pairs and come
up with a list for plenary
discussion.

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London Corporate Training

Today’s Programme

• Typical functions
• Adding value to company
performance
• Reducing corporate risk
• Measuring corporate legal
performance

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London Corporate Training

Reducing Corporate Risk
• Recent survey suggested the biggest
risk challenges are
• Current economic climate
• Cost control
• Headcount pressure and
• Regulatory compliance
• How do these match up with your
experiences?

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London Corporate Training

Risk Intelligent Organisation

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London Corporate Training

Today’s Programme

• Typical functions
• Adding value to company
performance
• Reducing corporate risk
• Measuring corporate
legal performance

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London Corporate Training

Performance Measurement Metrics
• Its important, but ……
• Most legal matter indicators and financial
indicators are backward looking - it has
been likened to "steering the ship by
watching the wake“
• Tend to be measured over the short term
and induces short term ‘fixes‘
• Cannot communicate the department's
strategy and priorities to its managers and
staff
• How could it be done?
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London Corporate Training

Meet the Balanced Scorecard

• Draw on a sheet of flip

chart paper the basic
gauges (information
displays) a pilot might
have in an aeroplane on
the dash board which he
uses to fly the plane.

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Financial Measurement

• Balanced scorecard is an integrated

measurement system that retreats
from the traditional Financial
Measurement to assess organisational
success
• What are the limits of financial
measurement?
• Discuss in groups and then prepare for
open discussion.

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London Corporate Training

Limits of Financial Measurement
• 60% of metrics used for decision-making are still
financial in nature. Criticisms include
• They are not consistent with today’s business
realities
• Driving by rear view. The classic criticism. There
is no assurance of ongoing success
• Tendency to reinforce functional silos.
• Sacrifice long-term thinking
• Financial measures are not relevant to many
levels of the organisation.
• BUT Financial metrics still deserve a place on the
scorecard
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Rationale – Why Develop a BSC?...

Demonstrate
Ability
New Leadership Meet customer
needs

Improve Customer Employee

performance Financial Learning Execute
Internal strategy

Funding crisis Align Employee

Communication & goals
Education

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Strategic Planning with the Balanced Scorecard.flv

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London Corporate Training

Private Sector Balanced Scorecard
Financial
Perspective

Customer Internal Process

MISSION &
Perspective Perspective
STRATEGY

Innovation &
Learning Perspective

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Conceptual Model of the Scorecard
Financial
What do our financial
stakeholders expect or
demand?

Customer Internal Process

Strategy At what business processes must
we excel to drive value for
Who are our target customers,
what are their expectations and customers?
what is our value proposition in
serving them? Employee Learning &
Growth

What do our financial

stakeholders expect or
demand? www.lct.uk.com
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London Corporate Training

MISSION
Financial
What do our financial
stakeholders expect or
demand?

Customer Internal Process

Strategy At what business processes must
we excel to drive value for
Who are our target customers,
what are their expectations and customers?
what is our value proposition in
serving them? Employee Learning &
Growth

What do our financial

stakeholders expect or
demand?
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Perspective, Objectives and Measures
P OBJECTIVE MEASURE
E Improve customer • Satisfaction survey
C satisfaction • Complaints
R
U
S
S Reduce customer • Statistics monitoring
P churn • Average retention time
T
E
O
C Increase market share • Industry comparison
M • Number of customers
T
E
I
R
V Serve internal • Customer care course attendance
customers better • Employee satisfaction
E
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London Corporate Training

Using Dashboards

https://websmp102.sap-
ag.de/~sapidp/01100035870000
0642122009E/LegalDepScorec
ard.swf

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BSC Exercise
Metro Bank Internal
Legal Department

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London Corporate Training

Levels of Balanced Scorecards

Cascading process
• High Level Scorecard
• Business unit level, etc.
• Department Group Level
• Team and personal Balanced
Scorecards

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Fishbone Diagrams
People Policies Procedures
Did not set Alarm

Backup battery dead

Effect
Always late
for work

Bus full up Power cut reset time

Only one mode - bus Power cut reset time

Alarm did not go off
Bus unreliable
Cost Public Equipment
transport
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London Corporate Training

An Organisational Block
• Group exercise
• Think of one thing which
impedes you completing a
project or key task
• Use it as the “Effect” in a
Fishbone Analysis exercise and
draw up a fishbone diagram on a
flip chart to identify the root
causes of that problem.

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Public Sector BSC?...

• What might be different?

• What perspectives or legs might be
applied
• Briefly discuss with your neighbour

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London Corporate Training

Corporate Social Responsibility and Legal
• “Corporations work within a governance
framework which is first set by law, then by
regulations from the regulatory bodies. In
addition publicly quoted companies are subject
to shareholders in general meetings and all
companies to the forces of public opinion”.
• Corporate Social Responsibility (CSR) is the
leading example of how the governance of
companies has to conform, sooner or later, to Sir Adrian Cadbury
public opinion.
• CSR not part of the statutory or non-statutory
framework

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Parable of the Sadhu
On a mountain climbing expedition to the
Himalayas, Bowen McCoy, a managing
director of the Morgan Stanley Company,
and his party found a pilgrim, or Sadhu,
dying of cold…….

Read on

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London Corporate Training

Corporate Social Responsibility is ....
“….. a concept which encourages organizations to consider the
interests of society by taking responsibility for the impact of the
organization’s activities on customers, employees, shareholders,
communities and the environment in all aspects of its operations.
This obligation is seen to extend beyond the statutory obligation
to comply with legislation and sees organizations voluntarily
taking further steps to improve the quality of life for employees
and their families as well as for the local community and society
at large”.
World Business Council for Sustainable Development

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The Benefits of CSR are …..

• Satisfied employees.
• Satisfied customers
• Positive PR
• Costs reductions
• More business
opportunities

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London Corporate Training

CSR and the Legal Department – CCBE says …
….CSR should be part of company policies and integrated
into strategies and decision-making
• As lawyers are specialist advisers to corporations this
will reflect on their responsibilities when acting as
member of, or secretary to, the Board of Directors.
• CSR must be considered as an area where
negligence may result in losses of a considerable size Représentant les
for the involved company. If the issues leading to the avocats d’Europe
Representing
loss were treated during a board meeting, and the Europe’s lawyers
legal department did not respond adequately, due
to ignorance, this may very well lead to liability.

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The Scope of CSR is …..
• Employees/Workers
• Customers/Consumers
• Shareholders/Investors
• Surrounding Community (be it a city or a country)
• Any individual or group of people directly or indirectly affected
by what the company does
• Standard for practices in the workplace (SA8000)

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London Corporate Training

PRIMARK Case Study – HER Project

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