I’m qualified to discern fat-vs-muscle in Legal spending from firsthand experience on both sides of the lawyer / client table. I’ve practiced business law for 25 years, and I ran divisions as a general manager and then served as an M&A executive for 12 years.
To cut corporate law function spending — and to do it safely — a company needs both an attorney’s technical grasp of the legal system’s demands, and a businessperson’s cost control and management savvy.
Two distinct skill sets. Each acquired through its own career path. Very few practicing lawyers — in-house or in firms — have had P&L duties. So, very few lawyers — in-house or in firms — have mastered cost control or other management skills.
1. On the lawyer side of the lawyer / client table, I learned that business requires excellent attorneys to protect it from legal risks.
Missing the legal system’s technicalities, or its subjective quirks, can be deadly. As a practicing lawyer, I was (and continue to be) constantly reminded that the judges to whom I put arguments, the agency officials investigating a client company, and the deal documents I negotiate and draft, all live and die by esoteric minutiae that excellent lawyers understand — and that non-lawyers generally don’t.
Sometimes it’s the individual prejudice or eccentricity of a judge, bureaucrat or arbitrator that makes all the difference. Again, attorneys are well-acquainted with this cast of characters and their proclivities — and non-lawyers generally aren’t.
2. Only in moving to the business side of the lawyer / client table did I come to master cost control and other management skills.
10 years out of law school, after practice with a Wall Street law firm, and then trying cases before juries in Manhattan, I accepted a client company’s invitation to run one of its divisions as a general manager.
During 12 years on the business side of the client / lawyer table, at Whirlpool and then at GE, I learned 90% of what I know about cost control and other management skills. On-the-job. And that was under the intense tutelage and demanding correction of my boss in my first business role (the company president).
It’s hard, perhaps impossible, to learn cost control and other management skills in a class or from a book. I’m thankful for great classroom experiences at Northwestern / Kellogg and Notre Dame’s Mendoza College of Business, and for reading extensively among the likes of Peter Drucker, Jim Collins, and Andy Grove. But to cut costs and manage effectively, nothing substitutes for direct, on-the-job experience.
Discerning fat-vs-muscle in the corporate law function calls for two different skill sets: an attorney’s technical grasp of the legal system’s demands, and a businessperson’s cost control and management savvy. Lawyers in-house and in law firms have only one of those. The corporate law function needs both to have a realistic chance at spending discipline.