Managing the Organisational and Business Expectations. Part 2 – Defining Value

To recap, the topic of ‘managing expectations’ was the top topic in our GCRC survey; and continues to be the number one topic when I am training, advising or coaching in-house lawyers. The format for this series of reports is based on the following formula – know – like – trust.

Part 1 focused on what did you know about your organisation, its business and the sector it operates in, the people and culture etc. In order to manage expectations then you will need to make time for building those relationships across the top and with the specific business units you (and your team) serve. Part 2 examines defining value.

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Do you feel undervalued by your organisation?

An in-depth study* of 25 leading in-house lawyers by AddleshawGoddard reported that GCs feel undervalued by their organisation. It is very difficult to add value when you feel undervalued.

Do you know what your colleagues value, and is it something that you can deliver?

Part 2 aims to address these fundamental questions of value and provide you with ideas, precedents and processes to assist you in meeting this central challenge.

It may seem obvious to state but in order to feel valued you must lead on delivering and adding value.

Delivering Value?

It is no good providing tea in an exquisite china cup if the tea is cold.

Before addressing ‘Added Value’ you will need to ensure that you and your team are ‘delivering value’. This means you are supplying the services you are employed to provide to your organisation in the manner you agreed with them and are recognised as doing so.

Lack of clarity and agreement about delivering value here is very common even after four decades of lawyers operating in-house and causes a lot of confusion both in the legal team and for internal business clients.

So defining ‘delivering value’ with your colleagues is a foundation stone for this journey. It is also worth the time spent examining their expectations and matching these to the resources you have.

Further this report assumes that you do have an agreed strategy with the organisation for the delivering of legal services and is aimed at expanding the ‘value’ element of this.

So where are you on the ‘value continuum’?

1. Receiving information from your clients about your service

This can be very challenging for in-house lawyers as they are normally the ones delivering opinions. Further the opinions they receive from colleagues are about how they delivered or did not deliver the answers/solutions the business wanted, not about their legal technical brilliance.

So first assess what information you have, either formally or informally, and review this against the suggestions below for collecting intelligence on you and your team.

Formal

A standard formal way to judge if you are delivering value is to conduct an internal survey to collect information that will help you decide on what the business needs and wants as well as what it values.

Your service needs to be seen as an accelerator of business drivers, not a ‘spanner in the works’.

Then you can consider how you can incorporate this into your reports to the Board and your colleagues. If you do not include impact on outcomes for your business colleagues (and maybe the shareholders) then your reports are merely recording progress of activities undertaken by legal. Senior lawyers need to be confident about communicating their impact on the business goals to the Board. Being busy is not enough!

From there, it’s vital to think differently about legal outcomes: which day-to-day activities carried out by the legal function have a direct and positive impact on these business goals? Which have little or no impact? What could be done to provide greater focus? Please see my Legal Strategy blog as this provides a simple method for concentrating on three critical areas to ensure your service is strategic and valuable.

It is recognised that defining Key Performance Indicators (K.P.I.) is challenging and most in-house teams struggle for metrics, especially if the organisation has none. As this is another topic in itself I have confined this report to ones around ‘value’ see Appendix A. High-performing legal teams also use external consultants*** and benchmarking information**** to stay ahead of the game.

So if you don’t already have some form of K.P.Is or Service Level Agreements (S.L.A.) to support your reputation in delivering first class legal services, then this might be the place to start. This will also expand the clarity of ‘delivering value’ and it is worth the effort to start the journey even if you are not sure of the final destination.

An example of K.P.I.s and internal surveys are contained in our book ‘Managing External Legal Resources’ or our new book “An in-house toolkit’ (due to be published shortly by the Law Society) should you want to examine or re-examine this aspect of your service delivery.

Informal

You and your colleagues may be more comfortable discussing this in an informal way over coffee or in periodic review meetings. A conversational way to collect feedback information is to start with what you enjoyed about working with them on that major transaction(s) or what went well. Then to move to what would they like to be done differently for the next one? If you become defensive, they are extremely unlikely to provide honest feedback again. Active Listening is the key here (please see Part 1).

The reason you would start with what went well is to embed the ‘value’ you are delivering. By asking – what could be done differently next time – shows that you being open to continuous improvement. I would also suggest that you keep feedback conversations to significant matters otherwise you could sound paranoid and under-confident about your service.

Hot topics for business colleagues to be included in your consultations

You will not be surprised to find costs at the top of the list. In fact due to an Oxera survey** the main reason for employing a lawyer or legal team was to reduce legal spend.

Apart from specific transactional financial information you might also want to be able to answer the following four critical business questions:

  1. Do you know how much you cost the business and how much externals do?
  2. How are your ‘hourly rate’ and the ‘hourly rates’ of the team employment calculated?
  3. Do you know how much you save the business and how much externals do?
  4. What is the proportion of internal v external costs for your organisation?

So before you start any feedback dialogue you should have the financial information at hand that is relevant to the transaction and also germane to the legal service generally. Please see my blog on Budgets, which you may find useful in supporting you in this area.

2. Delivering information about your service and its value to your colleagues

You cannot be recognised for what they do not know or understand!

Most in-house lawyers only report work in progress (a basic list of legal matters) to senior management, but not the impact that their actions will have or other matters of value to the business. The work in progress type of report is more important to the head of legal for internal workload management and useful to provide details to colleagues where appropriate.

So how do you report your value?

I set out six questions that should help you ensure that you are reporting the value as well as the activity.

  1. What reports do you provide on your work to your colleagues and the Board, and do they contain information concerning the ‘value’ of the work you and your team are doing as understood by your organisation?
  2. If your report is on risk management, does it quantify the ‘value’ of having immediate access to risk advice on the transaction or the improvement of managing ‘internal legal affairs’ generally? The Oxera report states that the organisations survey specifically stated this as the number two reason for employing an in-house legal team.
  3. Do you report the ‘cost saves’ of delivering the work in-house? For example – a contract which takes 10 hours to complete using the cost of the internal lawyer versus the cost of external lawyer.
  4. From my own in-house experience, skills such as leadership, management, financial awareness, team working were also highly valued. So do not overlook these. Please see Appendix A for an example survey I have used to align the service to those aspects that were important to my colleagues at that time. How does your organisation value you and your team’s interpersonal skills?
  5. How do you talk to your business colleagues about your work or a particular transaction? Do you couch it in business language? I have included a Business Acumen Competency in Appendix 2, which you may find a useful yardstick to assess your personal strengths and areas for improvement in this skill. Please also see Providing Legal Advice Report for further recommendations.
  6. Are you recognised for – being commercial and/or thinking outside of the box and/or delivering or adding value. If so use this information to inform your service and reports for your colleagues.

3. Operationalise it!

So what ‘process’ do you have for capturing and recording information on value delivered? f you do not have one then I suggest that it will be easier to stay on top of the organisational and people changes if you do.

This is where IT should be utilised from the beginning to ensure that you have the management information statistics year on year. I have personally found these extremely handy when dealing the ‘cost consultants’ engaged by the business from time to time. In fact on both occasions I was able to expand my department to meet the growing demands.

This information should be shared with the team on a regular team meeting – maybe every third team meeting should be on how you and they are getting to know and staying ahead of the constant changes in the organisation.

If you are a sole in-house lawyer then you can add various questions on any of the above topics to your internal relationship meetings agenda. The team should have a plan about how they are going to cover this for the relevant business units.

Conclusion

This is a continuous journey – you are never ‘done’, as the goalposts will continue to move.

Depending on where you start, as a basic minimum you should have some form of survey to collect information preferably electronically. Without this information you will never have the evidence about the service you deliver. You also clearly have to be seen to action this feedback you receive by your business colleagues in the context of your organisation.

Your reports need to include information on outcomes, values as well as activities, again preferably electronically.

Whatever software system you use, it will have to be adaptable to the changing requirements of the business and legal. For further information on software systems and apps to support you – please see www.gcresearchclub.com/premiummembership or contact me.

Any questions/comments on this report to ann@managingexternallegalresources.co.uk My book “Managing External Legal Resources’ can be purchased direct from www.managingexternallegalresources.co.uk My specialist website offers strategic coaching, leadership; management and interpersonal skills training for In-house lawyers. I also provide consultancy*** on all aspects of operating a legal team including value including facilitation process meetings for in-house teams.

The GC Research Club (GCRC) blends social media expertise, a wealth of specific industry knowledge and metrics management into a cost effective approach to creating value, improving productivity and protecting and growing your department’s contribution to company and reputation. We harness in-house legal networks to create value, improve productivity. We help you gain the competitive advantage through customer participation, workforce collaboration, and business partner optimisation.

Reports quoted from in this blog include:
* AddleshawGoddard Value Dynamics – www.addleshawgoddard.com – see references to the Client Development Centre
** The role of the in-house lawyer survey by Oxera commissioned by the SRA dated February 2014 (study undertaken in 2012-2013)
****www.lexisnexis.com/counsellink/legal-spend-benchmarking.

N.B.A report on the hot topics for in-house lawyers undertaken by GCRC is available from the author.
All my other reports and blogs mention in this report can be found on the GCRC website – www.gcresearchclub.com and on my website – www.managingexternallegalresources.co.uk

Appendix A – An example of a client survey on delivering value

Below is a short extract containing the top 10 value characteristics from my survey on value to help you formulate your own in defining your value to the organisation:

 

Value Characteristics Legal recognised for this? 1 2 3
1. Business linkage Legal work aligned with key business issues
2. Organisational strategy Legal team understands strategy and is aligned
3. Risk sensitive Providing services that recognises risk to enable the business operations to achieve their goal
4. Competitive advantage Legal understands our competitive drivers and works with the business to achieve these
5. Leveraging resources Accesses and leverages the right recourse (inc external) to meet the needs of the business
6. Access Provides a clear and pertinent point of contact
7. Speed of service Providing appropriate timely responses to specific business needs
8. Commerciality Advice demonstrates commercial context
9. Costs effectiveness Budgets are prepared and costs are commensurate with value derived
10. Motivated and approachable team Legal has a relationship plan and all lawyers enjoy working with the business

Please tick where your legal department (or you) is recognised by the business using the following mechanism:
1 = no
2 = sometimes
3 = always

Once you have collated the scores you will need to ensure that you are:

  • recognised for your ‘3’s
  • Prioritising improvements on any 1’s
  • Continue to build on ‘2’s to turn these into ‘3’s where appropriate.

Appendix B – Business Acumen Competency

Competencies describe the behaviours for effective performance at work. They are a set of codified characteristics which research has shown to be associated with achieving successful outcomes in organisations.

This competency contains eleven such characteristics that are meant as a starting point for understanding and implementing successful behaviours, and needs to be adapted to your circumstances:

  1. Demonstrates knowledge of the organisation’s strategic and business goals
  2. Understands internal structures and relationships
  3. Network, create and develop productive working relationships at all levels
  4. Identifies and gets the best from key stakeholders to enable effective service delivery
  5. Shows commercial awareness of the internal and external environments and future challenges to the organisation
  6. Is able to generate ideas and solutions which add value to the business
  7. Has a plan to promote the role of the legal function in adding value to the organisation* and implements it
  8. Contributes to the development, implementation, monitoring and review of corporate plans as part of the senior management team
  9. Recognise and implements corporate values and ethos within legal team and working with colleagues
  10. Takes calculated risks to achieve business goals so legal support is ‘risk sensitive not risk adverse’
  11. Evaluates areas where legal risk management would add most value to your organisation and its business goals

About Ann Page

A Top 100 Lawyer of the Year, Ann is perfectly placed to offer strategic coaching to fellow lawyers, as she has both delivered and received legal services. Her impressive CV over a 30 year legal career includes senior positions at companies/organisations as diverse as Citibank, Crest Homes, Next plc, National & Provincial (now Abbey) and The Co-operative Bank. She is a published book author (‘Managing External Legal Resources’) and has appeared on the professional services TV channel talking on this topic as well as speaking and writing on lawyers’ professional development. Ann has also been involved with the Law Society National Commerce & Industry Group for 15 years in a variety of roles and chaired it for 18-months. Ann is Head of Business Affairs for the Institute of Paralegals, has trained with the Coaching Academy and also holds a HNLP certificate in coaching as well as being an NLP Master Practitioner.
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