Legal Department Priorities and Time Allocation: Who's In Charge?


The slogan that corporate counsel live by is: THE COMPANY IS THE CLIENT. But with several – and often different – interests at the company, which particular party sets the company's legal priorities?

Time management is one of the core issues each lawyer must deal with in his/her practice. For the in-house lawyer, effective time management goes beyond simple "to do" lists; it is rooted in the priorities defined by the company's legal needs. However, with the many facets comprising the corporate client, balancing the legal needs of the company against the needs of the executives, board, and management can be a challenge.

According to David Schellhase, author of The Corporate Legal Department Handbook:

"When an attorney practices with a law firm, he rarely has to worry about time allocation, the law firm lawyer's priority is to serve his paying clients. He never has to decide what is important because the clients implicitly tell him that the task is important by agreeing to pay his fee.

For the in-house lawyer, however, time has been bought and paid for in two-week, salaried increments, not on an hourly basis. As a result the burden is on the in-house lawyer to decide what is a priority and what is not, and to allocate time accordingly. Spending time on unimportant matters hurts your company; spending time on what is important helps. The equation is that simple."i

In corporate practice, Schellhase's simple time allocation equation is frequently complicated by "urgent" requests from executives. According to a recent survey of FindLaw Corporate Counsel Center (CCC) users, 27% percent of FindLaw corporate counsel survey participants said that executive priorities often conflict with their legal department priorities. Evidently, in-house lawyers and their executive clients do not always agree on what lawyers should spend their time doing.

Over 40% of the survey participants indicated that their biggest time management issue was that they have too many "fires" to extinguish that prevent them from achieving long term goals. Whether these "fires" emanate from the executives or other branches of the company, the danger of sacrificing long-range projects for the "here and now" seems inherent to corporate practice.

Schellhase counsels: "Because your clients may be relatively unsophisticated consumers of legal services, it is often up to you to decide how to budget the precious commodity of your attention and expertise. Time spent drafting an email policy is time not spent giving a seminar on how to avoid inadvertent sexual harassment or racial discrimination. Time spent on securities law compliance may mean that your OSHA compliance goes begging for a while. In-house law is all about understanding what is a big risk and what is a little risk and allocating attention and money accordingly."ii

Although Schellhase advocates the lawyer's point of view, he is mindful of the reality of corporate practice. "There are two sides to every discussion of immediate priorities, and the negotiating leverage is usually squarely on the side of the executives."iii

Priority Perception Gaps

A legal department's priorities inform its time management. The parties that establish these priorities essentially set the agenda for where and how legal resources are allocated.

The following chartiv, featured in The Corporate Legal Department Handbook, illustrates the difference between a typical CEO's perspective on what the priorities should be for a general counsel, set against what most general counsels would probably agree are their priorities.

What your CEO believes should be your priorityWhat is probably important to you
Responding immediately to whatever legal issue rises to his attentionDealing with high priority legal matters before high urgency legal matters
Cutting legal costsAllocating legal resources properly in the context of the company, its scope, resources and appetite for risk
Keeping legal issues out of his sightBringing legal issues to management's attention when they are significant
Getting accurate adviceGiving accurate advice
Reducing the company's legal risks while not impeding the company's growthReducing the company's legal risks while not impeding the company's growth


Luckily, there is some common ground here. Drawing again from the CCC survey, only a small percentage (11%) of respondents said that there is no correlation between their legal priorities and what the CEO believes the priorities should be. In fact, most respondents admit an affinity between legal and the CEO. Forty-three percent indicated some overlap, while an additional 45% said that their legal department's priorities matched what their CEO thought their priorities should be.

Also, the level of a legal department's autonomy seems to vary by company. For instance, 30% indicated their legal department had complete autonomy in setting its priorities. An equal number reported little or no autonomy. By far, the largest numbers were in the middle: 49% indicated their department had "some autonomy" over setting their own priorities. This large number seems logical, because within every company, there are many different departmental priorities, all parading under the guise of the client.

Allowing the legal department complete autonomy over its agenda would seem myopic, unless that department followed Schellhase's advice:

"Try to remember that what your client wants is not always what he needs. Lawyers are the experts in the law, and in-house lawyers must set the company's legal agenda. When you set your agenda, do it based on your understanding of your client's needs, the risks and rewards of the company's business model, and your perception of the current legal landscape."v

Click here to read more about issues facing corporate counsel and additional information about The Corporate Law Department Handbook.


FOOTNOTES

  1. David Schellhase, The Corporate Law Department Handbook, 1-7-1-8.
  2. Ibid., 1-8.
  3. Ibid., 1-9.
  4. Ibid., 2-1-2.2.
  5. Ibid., 2.2.



For further information:

  1. Corporate Governance—Addressing the Project Management Challenge and Achieving Cost Effective Reform
    http://articles.corporate.findlaw.com/articles/file/00338/009572

  2. Case Management For Mass Litigation
    http://articles.corporate.findlaw.com/articles/file/00996/009107.html

  3. Conflicts of Interest Aren't All Bad: Lessons From The Corporate Accounting Scandals And Beyond
    http://supreme.findlaw.com/legal-commentary/conflicts-of-interest-arent-all-bad.html

  4. SEC Adopts Standards of Professional Conduct for Attorneys
    http://articles.corporate.findlaw.com/articles/file/00338/009271

  5. Get More Done With Less Stress: Workplace Tips On Productivity
    http://practice.findlaw.com/archives/feature_0203.html

  6. Selecting a New Contacts Management Database: Can your firm handle the change?
    http://practice.findlaw.com/archives/feature_0902.html

  7. Online Compliance Systems
    http://practice.findlaw.com/worldbeat-1103.html

Andrew Zangrilli, Esq., a senior producer at FindLaw, specializes in Corporate & Business Law, Intellectual Property and Internet Law. He manages FindLaw's judicial opinion summaries, legal newsletters and Modern Practice magazine.