Clarity about Corporate Law Function's True Role

May 17, 2022

Corporate Law Functions Can’t Keep Up w/ Soaring Demands, So Legal Has to Scale Its Capacity: Put Proven Managers in Charge — Part IV of IV

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The Point

What’s wrong with the corporate law function? For the last 40 to 50 years C-suites and boards have taken a hands-off posture on managing Legal, leaving lawyers in-house to manage lawyers in outside firms. Most of these lawyers are pretty good at law, but they’re bad at cost control.

Lacking the will to exert cost control on their fellow attorneys in firms — and free of accountability to the C-suite or board to do otherwise — general counsels passively continue to pay for the waste inherent in the billable hour business model. And fees to law firms have increased every year for the last twenty, except for two years during the Great Recession.

Meanwhile, from 1997 to 2017, law departments went on a hiring spree of in-house talent as an “economy move” — with in-house attorneys on corporate payrolls increasing by 203%. Continue reading

May 6, 2022

Corporate Law Functions Can’t Keep Up w/ Soaring Demands, So Legal Has to Scale Its Capacity: Why Lawyers Can’t Manage Scaling — Part III of IV

by Joel A. Webber

The Point

1. Corporate law functions perennially experience chronic, gaping shortfalls between the resources they need to do their job and what they actually possess.

2. Without an unlimited budget, a corporate law function must therefore scale its resources to keep up with soaring legal and regulatory demands.

3. To get at-scale impact, Legal needs disciplined systems and processes by which its people work together to accomplish what no single one of them could do on their own.

4. The disciplined systems and processes required for at-scale impact need a proven executive in charge — not an individual whose career has been limited to law practice. Continue reading

May 2, 2022

Corporate Law Functions Can’t Keep Up w/ Soaring Demands, So Legal Has to Scale Its Capacity: C-Suite Must Say What It Wants from Legal — Part II of IV

by Joel A. Webber

The Point

As I suggested in Part I of this series, scaling a company’s resources to meet soaring legal and regulatory demands is, ultimately, a management challenge. Because at-scale impact — using limited resources — won’t happen without disciplined systems and processes by which colleagues work together to accomplish what no single one of them could do on their own.

Successful companies usually have individuals who have proven themselves as managers. They might be serving in a corporate function like finance, or serving as a line manager in a business unit. Or, in the past five years to ten years, proven managers may be found among a new breed of professionals: “legal operations” executives.

But such proven managers are rarely found among lawyers, whether general counsels or others in-house or in firms. Unhelpfully, lawyers in-house and outside counsel “manage” in dysfunctional ways peculiar to their profession: rewarding excessive time spent on tasks and overstaffing work teams with inexperienced attorneys — actually disincentivizing efficiency.

Therefore only proven executives should manage the corporate law function. Attorneys should play a supporting role in Legal, confined to their technical skills in law and regulation. Continue reading

April 26, 2022

Corporate Law Functions Can’t Keep Up w/ Soaring Demands, So Legal Has to Scale Its Capacity: Solving The More-w/-Less Dilemma — Part I of IV

by Joel A. Webber

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The Point

1. In the last four decades, legal and regulatory demands on business have increased exponentially.

2. These demands trigger chronic, gaping shortfalls between what a company needs in order to achieve legal or regulatory compliance, on one hand, and the resources that Legal actually possesses, on the other.

3. Such severe gaps in capacity call for responses at-scale. And at-scale impact won’t happen without disciplined systems and processes by which colleagues in Legal work together to accomplish what no single one of them could do on their own.

4. But most lawyers cherish their autonomy. So most avoid systems and processes they view as cramping their individual style. Continue reading