Do more with less. It’s a recurring challenge facing in-house counsel who are being asked to reduce their organisation’s legal spend. In trying to meet these constraints, in-house teams often internalise work and negotiate lower rates with external firms. These solutions only go so far. While slashing budgets may help with the bottom line, in-house teams still need to get the job done. To maximise success, your in-house team might need to change the conversation by shifting the emphasis away from saving money and towards creating value. In this two-part series, we explore how your in-house team can maximise its impact by focussing on value-creation.

Finding the ‘Core’ of the Business

The best organisations become successful through focussing on what is important. When Warren Buffett and Bill Gates first became close friends, Bill was at Warren’s house for dinner. Warren’s father asked them to separately and silently write down one word that had most impacted their success. On that piece of card, they both wrote down the same word; focus.

While focusing on core activities can bring incredible value, many in-house teams are disconnected from the core focus of their business. A survey from the FindLaw Corporate Counsel Centre found that just 45% of in-house lawyers believe that their legal department’s priorities aligned with those of the chief executive. 11% said there was ‘no correlation’ between the two. So, how can your in-house team tackle this lack of alignment?

What is the ‘Legal Core’?

Navigating the challenge to do more with less must begin with re-aligning the focus of your in-house team with the activities that deliver the most value to the business as a whole. To do this, Australia’s largest in-house teams have first defined the core activities that align with the critical objectives of the business. Then, these teams sharpened their focus to deliver these core objectives.

Discovering ‘core’ activities for your in-house team begins with asking which particular legal activities:

  • advance the strategic objectives of the organisation;
  • align with the core capabilities of your in-house team; and
  • best leverage the in-depth business knowledge and understanding of your in-house team.

The key to defining these activities is first to understand the objectives of the organisation. Then, establish which of these objectives can be advanced with the ‘unique selling propositions’ (or USPs) of your in-house team. These USPs may include the:

  1. proximity of the business;
  2. commercial understanding of the legal team; and
  3. specialist legal capability.

A helpful exercise for in-house teams is to ask themselves:

‘If our in-house function could only do three things to support our organisation’s mission and strategy, what would they be?’

Implementing the ‘Legal Core’

To implement the ‘legal core’, your in-house team can use a cascade strategy. This strategy will derive specific legal activities from overarching objectives. Beginning with the objectives of the business, this tool translates the goals of your in-house team into quantifiable value for the business.

For example, let’s put this principle into practice with a retail business ‘A-Star Company’. This business’ key objective is to out-compete other retailers by reducing the cost of products and decreasing the time it takes to acquire new stores.

Set out below is a hypothetical example of how the cascade strategy would work. Here, it could be used by the retailer’s in-house team to implement legal activities that will advance the retailer’s mission.

What it All Means:

  • the organisational strategy is the macro-level strategy that is the primary aim of the business;
  • the legal strategy is the macro-level strategy of the in-house legal team, which is aligned with – and nestled within – the broader aim of the business. Identifying this legal strategy begins with an in-house team asking how they can add to, or support, the organisational strategy;
  • focus refers to the in-house team’s set of primary goals that support the legal strategy;
  • the measure concerns the specific, measurable outcomes for each area of focus; and
  • value refers to the tangible outcome of the in-house team working to support the overall organisational strategy.

The Importance of Gaining Executive Buy-In

Within our experiences working with in-house teams, we have seen that achieving the support of strategies from key executives within the company is essential. Known as gaining executive buy-in, this is an important component in aligning the activities of the in-house team with the ‘legal core’.

In-house teams who implement a strategy focusing on their ‘legal core’ have been able to better articulate their value beyond simply saving their spend. In doing so, key executives have bought into the strategies. By narrowing the focus of your in-house team to high-value outcomes and gaining business approval, executives often redirect in-house resources to ‘non-core’ activities, called peripherals. This will be further explored in Part 2 of this series.

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Key Takeaways

The pressure to do more with less is prevalent within some of Australia’s largest in-house teams. Re-focusing the objectives of your in-house team to align with the business’ core goals could assist in navigating the business’ aims. Shifting the focus to value creation rather than saving money will begin with your in-house team asking themselves which particular legal activities:

  • advance the strategic objectives of the organisation;
  • align with the core capabilities of your in-house team; and
  • best leverage the in-depth business knowledge and understanding of your in-house team.

Once these ‘core’ objectives are identified, you can properly implement them through the ‘cascade strategy’. You should also ensure the buy-in of key executives with the business. The focus of the in-house team can then turn to manage their excess (or ‘peripheral’) tasks. We delve into this challenge in Part 2 of this series. If you have any questions about how your in-house legal team can better meet business aims, contact LegalVision’s Legal Transformation lawyers on 1300 544 755 or fill out the form on this page.

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