The Director of Legal Operations

Why should companies hire their own legal executives? For the significant return they’ll receive on investment

OVER THE PAST five years I have had the opportunity to work with dozens of corporate and government law departments in Canada and abroad. Most have at least four features in common.

First, the leadership and lawyers of the department must comply with a broad range of financial, human resource and technological requirements identical to those affecting all other departments in the organization.

Second, as inside counsel become more closely aligned and sometimes embedded with business units, the demand for their advice and legal services increases. The average work week becomes longer, with much legal work getting done after 6 p.m.

The third feature is pressure to manage relationships with external counsel more effectively and efficiently. Very few law departments have the experience or appetite to manage the “supply chain” well.

The fourth is a performance imperative. Law departments must have business plans and objectives with measurable targets. Some of these are financial and readily quantifiable, but others are strategic or developmental and can be difficult to frame.

Part of the solution is to bring management expertise to law department operations. In most cases, this means introducing a new management position in the form of a director of legal operations. The job title may vary, but most financial institutions as well as large municipalities such as Calgary, Edmonton and Ottawa have had such positions in place for more than 15 years. I recently spoke to several such legal executives about the current state of law department management and the prospects for the future.

Scott Morgan has been Air Canada’s Director of Legal Operations for over two years, bringing with him 20 years of experience in legal leadership at two Montréal-based law firms. He supports the general counsel on efficiency projects, tracking departmental objectives, managing professional development programs, the introduction of new technology, and concluding fee arrangements with law firms. Scott anticipates law departments will be using emerging technologies much more to improve service delivery within two years.

The Regional Municipality of York has a full-time Manager of Business Operations and Financial Planning. Julie Grellette brings business and budget planning experience to the role, which includes establishing performance measures, arrangements with external counsel, financial planning, and technology in support of the region’s court system.

Bell Canada’s Miguel Baz divides his time between legal operations and the role of Assistant Corporate Secretary. His long-standing responsibilities for relationships with external counsel were formalized in 2013. Since then, his emphasis has been on harmonizing arrangements and controls for legal fees.

Baz predicts that technology will continue to transform legal service delivery for in-house and external counsel alike. However, technology literacy will need to improve for all counsel to keep pace.

CN’s Jonathan Leung is a Financial Analyst in the law department and facilitates the flow of information between the law department and the finance/accounting department. Budget and performance targets are tracked. Leung has invested considerable time over the past 18 months in working out the operational details of reducing the number of primary external law firms to two.

Construction-engineering firm SNC-Lavalin boasts a 70-person legal team across 15 countries, and added a Director of Legal Operations in March 2017. Jean-François Denis was tasked with helping to transform the legal department into a “centre of excellence.” His responsibilities include legal support systems and technologies, policies and procedures, training, talent retention, measuring performance, and (like his CN counterpart) reducing primary external law firms to two. Denis believes that business and legal technologies must drive change in how firms are retained and service delivered across 24 time zones. Innovation, information management and focus are the watchwords.

General counsel who are leading departments of 10 or more lawyers should consider hiring a full-time director of legal operations; the return on investment is significant. And many good resources exist to help law department managers in their jobs, including from the Corporate Legal Operations Consortium, the Association of Corporate Counsel, and the Association of Legal Administrators.

Richard G. Stock, M.A., FCIS, CMC is a partner in Catalyst Consulting. For law department management advice that works, Richard can be contacted at (416) 367-4447 or at rstock@catalystlegal.com.