10 years into my legal career I accepted a corporate client’s offer to run one of its divisions as a general manager. Only by leaving law practice and becoming an executive did I learn how to protect a company from its legal risks.
This protection has two elements:
First Element: Prevent legal problems before they happen — attorneys’ emphasis on fire fighting amounts to bad risk management; and
Second Element: When you fail at the first element, see to it that legal problems are solved with the same high quality and efficiency that you demand in every other corporate function.
Every corporate function other than Legal.
Lawyers, for the most part, don’t see their jobs this way. Prevention of legal problems receive their lip service; but after-the-fact clean-up takes more time (hours billed) — and so it pays better. And one-off, ad hoc efforts on “bespoke” tasks (each contract is “different”) get their serious time and attention — “boring” process disciplines, not as much.
And when legal problems arise, the profession’s business model offers its own, dysfunctional, “management” methods:
- Pricing that’s unpredictable — because it’s based on how long the lawyers decide to take doing their work;
- Over-staffing by design — more people billing more hours; and
- Assignment of inexperienced attorneys alongside those who actually know what they’re doing.
Meanwhile, these “management” methods stymie adoption of accuracy-improving and labor-saving technology: Systems that remove errors automatically and make workflows more efficient reduce the hours for which attorneys can bill the client.
So a company needs P&L people to make sure that the job of protecting the company from legal risks gets done right. And that’s because CEOs, CFOs, and other general managers — in my experience — focus more readily on the company’s business goals.