“What We’ve Got Here Is Failure to Communicate” Between Legal and the Business
Yesterday I mapped a recent Gartner report about IT onto Legal, noting the similarity of IT’s and Legal’s separation from business goals.
Part of the problem is a communications breakdown. Legal has a big share in the problem, but it’s a two-way street.
Let me introduce it with the classic scene from Cool Hand Luke1, with Stother Martin and Paul Newman.
What are your options when two people speak different languages?
- One learns the other’s language – which takes years
- They struggle to communicate in a common pidgin language
- One speaks his own language (often slower and louder) and the other tries her best to puzzle it out
- They employ a translator – or facilitator
The business and IT often use translators/facilitators, who usually wind up unloved by both parties because they’re expected to negotiate impossible conflicts rather than simply facilitate dialog. However unloved they may be, though, they add value to the discussion by making a deeper discussion possible. I’d be curious to know if anyone has ever tried this approach with Legal, using non-practicing former inside counsel who either consults to the business or works in the CEO’s office2 to facilitate all high-level discussions between the CEO/CFO and GC.3
The ideal long-term answer, I think, is #1. Legal needs to learn the language of business, but you can’t do it overnight. There’s no Learn-French-in-Four-Weeks equivalent. (Not that I’m suggesting those CDs work, either.)
#2 is simply a bad idea. It’s no way to communicate difficult concepts.
What normally happens is #3. Oddly, it’s just as often the GC speaking “legal” as the CEO speaking “business,” maybe more.
But as serious as the language barrier is, the problem is more than language.
The Topic of Discussion
Yesterday I used this example:
The CEO or CFO may say to the CIO, “We want you to do all these great things to help us advance the business, and oh, by, the way, don’t go over budget.” Yet which of these will the CIO get fired for?
- Delivering great tools the business needs but exceeding budget by, say, 8%.
- Delivering little, keeping most of the old stuff running no worse than last year, and meeting budget.
As before, substitute “Legal” and “GC” for “IT” and “CIO.”
Agreeing on budget is a great guide to priorities. However, consider the budget discussions between Legal and the CEO.
Okay, that’s part of the problem. Most budget discussions occur between Legal and the CFO. That’s not good. The CFO does not represent the CEO in most organizations. She, too, is charged with focusing on the budget first and business priorities second. (See the conversation above and substitute “CFO” for “CIO.”)
But let’s say the CEO and the GC discuss the legal budget. What gets discussed? How often, for example, does it look like this:
Look familiar? But sometimes they’ll break it down by department:
Oops, I didn’t say whose departments. These folks are still speaking “legal” rather than business.
What about discussing a budget that looks like this instead?
That aligns with the business. It’s probably better, even though Legal will have to do some work to convert it to an internal operational budget. But Legal’s job is to support the businesses it serves, and the CEO deserves to understand how much legal services each business unit absorbs. (Legal departments that charge back to the business already have budgets that look something like this.)
But let me suggest one more breakdown:
Remember the chart yesterday about the top ten business priorities? Here’s legal spend broken out according to those priorities.4 This now becomes the basis for a wonderful discussion along the lines of the “business charter” I described yesterday. What’s important to the business? How much legal support does that priority receive? If it seems disproportionate, is that because, say, workforce support is cheaper than supporting new markets or because priorities and effort are misaligned?
Sure, this breakdown is going to create a bit of extra work for Legal… but they should have the core information already. (If not, go get it.)
Inside counsel might well share this breakdown with outside counsel, at least with those firms doing a broad cross-section of matters. I understand there’s some fear that this sharing might result in an awkward conversation where the firm says, “You’re spending 25% of your budget on increasing enterprise growth and 15% on customer building, yet we have more business from you in the latter than the former.” Actually, that’s a good discussion for both parties. Consider possible answers:
- You work is stronger in the customer-growth matters you’ve done than in enterprise-growth matters.
- We have an entrenched firm doing most of our enterprise-growth work and we’re happy with them.
- Oh, that’s interesting. I didn’t realize that.
- Yeah, each inside counsel gets to pick her own firm, and I guess the folks working on customer projects like you better.
Outside counsel could learn something about their own business development efforts from each answer. #3 might be a bit scary for both parties… but if it’s the case, they’d both do better to understand it up front. And if it’s #1, you’ve found a problem inside the firm you need to look into (or not – maybe this simply isn’t one of your strengths).
Next: One more thought on the CEO top-ten list.