Basic HTML Version
94
|
GC
| WWW.GCMAGAZINE.COM
But that was the bait; here’s the switch. If you
think that description was relevant to your
own function then you’re bluffing about how
much you truly understand how organisations,
including your own, view and think about your
role. And that bluff is in danger of being called.
Those not bluffing would have recoiled in horror
because they recognise that what is outlined
above is an argument for ‘vertical integration’.
They would have thought: ‘This is only a small
portion of the tasks we do; we add value in
many more ways than this.’ When I asked the
GC how they ‘added value’ I was told that they
‘deliver a more efficient service than last year at
a lower cost’. When I asked what else they would
be doing to add further value, I was met with
a blank stare, then ‘oh, greater efficiency’. The
game was up. And it won’t just be me who spots
the bluff…
Recent years have seen a strange economy
for in-house lawyers as their power has grown
substantially: the global impact of Sarbanes-
Oxley (2002) and Dodd-Frank (2010) amidst a
rapidly changing global and economic climate
has produced a rising tide of legislation and
regulation across all industry sectors and areas
of law. The pressure to reduce overheads has led
to the large law firms suffering as work has been
brought into growing in-house departments.
In many industries, especially banking, legal
has been ‘on-call 24/7’ dealing with barrage
after barrage of compliance-based demands;
unravelling frighteningly complex balance
sheets and asset holdings has kept everyone
busy everywhere. The large legal firms are, quite
frankly, 20 years out of date in their corporate
sales model when compared to the likes of the
large enterprise suppliers (like EY, Computer
Sciences Corporation, McKesson, Accenture,
IBM, PwC and co). Although they want to sell
more services, they aren’t really willing to
reinvent themselves enough to be consistently
strategic business partners. The illusion that the
vertical integration model will continue for much
longer is easily maintained - in-house teams are
growing, people are busy and times are good.
The impact and influence of in-house teams has
never been higher and they’re adding more value
than ever.
Or are they? Our own (and others’) research has
shown that while those in-house are busy and
in many ways powerful, by pushing a vertically
integrated model they are often unwittingly
avoiding the activities that generate impact
and influence. When asked in confidence, few
non-legal stakeholders have viewed the legal
function as a ‘truly strategic business partner’.
Instead, they are often perceived as ‘necessary’,
doing ‘important’ but ultimately ‘unwanted’
work ‘for the lowest price we
have to pay.’ By continuing to
use the language and argument
of vertical integration it is likely
that many GCs and their functions
are unwittingly perpetuating
this view. And that is important
because if you’re not viewed as a
strategic asset, at some point the
outsourcing crew - the men and
women with clipboards and spreadsheets doing
‘functional and role redesign’ in order to secure
‘efficiencies’ - will be looking you and your team
over.
There is a warning from history; this has
happened to most other functions over the
‘PRICE IS WHAT YOU PAY; VALUE
IS WHAT YOU GET.’
WARREN BUFFETT