Cross-functional legal alignment: how to make friends

This is one of 13 chapters from our eBook, 'Legal operations: how to do it and why it matters'. Download the full eBook or explore the other competencies below.

Mike Russell, Lean Leader, Legal Operations, Ingersoll-Rand, shares his insights on achieving cross-functional alignment. The views in this article are the author's own, and do not represent the views of Juro nor those of CLOC.

Cross-functional alignment is one of the legal operations competencies that would seem most mysterious to a lawyer from 50 years ago. Legal, as a function, didn’t need to be aligned; it was there to give clarity to other functions on what they could and couldn’t do, as prescribed by law and interpreted by attorneys. But the modern business environment made it impossible for that attitude to persist. Earlier in my career, I was part of a team challenged to streamline a corporate legal department of nearly 2,000 professionals in more than 70 locations with up to $1bn in managed legal spend handled by more than 1,200 law firms. If legal is to exist in-house at that scale, and escape its historical reputation as a cost centre and a blocker, then failing to align across the business’ functions is not an option.

You don’t know until you land in a company how aligned and optimised its various functions are. The impact of a poorly aligned contracts function is visible immediately, but something like product liability is hard to troubleshoot until problems occur. It’s important for an in-house lawyer to get a sense of this as soon as possible, and identify the most valuable areas for legal to align across the business.

The IT crowd

The encroachment of technology into in-house legal has taken longer than it should have, but there’s no doubt that it’s transformed what we do, and how we do it. The wholly digital nature of providing legal services in-house means that the first function with which you need to become aligned is IT. It’s fair to say that many of the best things we do as in-house legal, in terms of efficiency and process improvement, are driven by technology. This means that knowing and appreciating your colleagues in IT is crucial, to foster a mutually beneficial relationship.

You need friends in IT who know what you need and why, and why it matters to the business that your project takes precedence

Some legal departments are fortunate and will have dedicated IT resources, but many companies operate a shared services model; in such an environment, IT dedicating time to legal necessarily means another department taking a back seat. You need friends in IT who know what you need any why, and why it matters to the business that your project takes precedence - for example, the business impact of a faster contract closing cycle, or the risk mitigation that an IP management system would bring. Without alignment between legal and IT, you risk being an item on a to-do list that’s never addressed.

Done right, the relationship works both ways. When it comes time for CIOs and GCs to report on objectives to their C-suite peers, there’s always a focus on customer-facing business enablers and security compliance. Having a lawyer with a seat at the table, who can explain in detail why IT and legal have agreed on a particular solution, and the real ROI and time savings that come from tools like matter management and e-billing software, is a huge help. If in-house lawyers are aiming to add value, few things are more useful than helping to explain that value at the C-suite level.

Finance is the next obvious function with which legal needs to achieve alignment. It’s no longer good enough for lawyers to be unaware of who their budget controller is, nor to maintain ignorance of what legal spend actually means. I make it my business to sit down with my in-house lawyers and ensure they understand what a dollar of legal spend really accomplishes, where it actually sits in company books and budget lines, and the consequences of that spend. Particularly for a public company, legal spend and its impact on top-line costs can have a significant impact on shareholder value - making this real for in-house lawyers will make cross-functional alignment, and efficient service delivery, much more likely.

Be the fence, not the ambulance

The need to be aligned isn’t driven only by making procurement easier, and budget conversations less painful. Establishing legal as a value-add rather than a cost centre is a driver for us all, as we look to give back in areas like IP enforcement, business recovery, and so on. But this value can also be expressed in terms of the types of advice we’re empowered to focus on. I like my legal department to be the fence at the top of the cliff, rather than the ambulance at the bottom; legal is often far too reactive, cleaning up avoidable messes, rather than preventing them happening in the first place. A non-aligned legal function is much more likely to be blindsided by unforeseen risks and end up driving the ambulance - all the way to the courtroom, in the worst-case scenario. By aligning properly with other business teams it’s easier to horizon-scan, spot risks and focus on preventative law, where legal as a value-add really comes into its own.

The best legal leaders are constantly reaching out and partnering at their level, and making sure their direct and indirect reports do the same, all the way down the reporting chain

A culture where cross-functional alignment can become a reality doesn’t happen on its own. It starts, like so many key initiatives in the corporate environment, with tone at the top. Leadership that understands the value of cross-functional alignment is a must, but beyond that, you need leaders who walk the talk. The best legal leaders are constantly reaching out and partnering at their level, and making sure their direct and indirect reports do the same, all the way down the reporting chain. They insist that their lawyers are embedded in processes across the business; sitting in on HR’s contract reviews, or IT’s data security audit. Making legal staff available in this way - proactively, rather than as a reactive helpdesk - is a great way to build trust across the company.

Aim small, miss small

The helpdesk mindset is not acceptable as a modern way to work: in-house lawyers must be nimble, responsive and concerned with client satisfaction in order to drive success in the company and spot opportunities to gain a seat at the table. But earning and maintaining the trust needed to keep that seat requires a track record of success, and in my experience it’s useful to start small with cross-functional projects. We probably all have experience of a transformational change project involving new systems or processes that ended up in constant firefighting mode, with changes coming too thick and fast, and stakeholder management at scale too unwieldy to ever reach the final target state. While it’s great to secure funding and buy-in for a cross-functional project of that size, scope creep and moving targets can quickly come back to haunt you - and squander that trust you worked so hard to build with other teams.

Instead, it’s easy to establish and benefit from cross-functional alignment on smaller, more agile, sprint-oriented work. We’ve seen success with finding a discrete part of a legal process, common to several functions but carried out by multiple law firms, and pulling it out to be addressed by an ALSP or a new technology solution. Similarly, moving to self-serve on a small number of specific, lower value documents, like NDAs, sales contracts and end-user licences, is a great way to free up lawyer time, whilst delivering a benefit to various functions at the same time. Once this is in place, your role can refocus to gathering and analysing data, and perfecting the service that legal provides.

Above all, don’t forget the soft skills that help cross-functional alignment to succeed. Centralising work, disaggregating processes, redistributing work between functions - for many people within those functions, this creates a fear that they’re being optimised out of a job. Any change to process that has a resource impact means walking a fine line. The key here is to communicate often, clearly and transparently, and to radiate a positive mindset in those communications: this change isn’t to eliminate you, it’s to liberate you to focus on the high-value work that we hired you to do. But the better legal becomes aligned with other functions, the clearer it should be where lawyers actually add the most value. True cross-functional alignment is a win for both sides - and ultimately for the company itself.