So you want to manage an internal law department? Are you sure??!!

Practising law is the business of law firms; in-house practice and legal departments are just part of a business that has many other priorities. Legal group budgeting, financial systems, hiring, firing, promoting, contract management, records keeping, and IT have to integrate with everything else. General Counsel is just one member of an executive team. The Legal Department (“Legal”) is just a small — but important — part of something much bigger.

Budget and resourcing come first. Is budget sufficient? Are there enough lawyers and support staff? Can we hire outside counsel for the specialist, sensitive or high horsepower matters? How is the budget set: is it based on previous years adjusted for known future matters? Bottom-up budgeting for Legal is difficult, even risky. Does Legal cross-charge other departments, requiring a type of timekeeping in all or some matters? (Yes, some in-house groups have to do it.)

Is Legal full-service or are there areas you will send out, like litigation, tax issues, major deals? Budget enough for external counsel and negotiate a reasonable fee arrangement with your firms.

How do you retain and manage external counsel? Can other departments directly retain them, or does every retainer go through Legal? Better the latter: Legal stays informed, and can direct, evaluate, and shape the external work to fit into the general picture. External counsel should always report to an internal lawyer, with detail and frequency of the reporting depending on internal workload, the trust factor, and the matter’s importance.

What’s the company’s line of business and its general risk tolerance? Risk aversion means more legal work and a higher standard of advice; 80/20 won’t be enough, if it ever was.

Is the IT resourcing right? Internal Legal is document heavy and Legal is often an organization’s institutional memory, the first stop in looking for contracts and history. Good document management software is important; get the attention of the IT group to help implement your preferred solution.

What about the entity’s contracts? Legal is assumed to have all the signed contracts (frequently a wrong assumption). May as well offer to create the contract archive if there isn’t one already. A simple searchable spreadsheet catalogue will do, but be sure to remind the company regularly to send Legal all signed contracts at or above defined value or risk levels. Try not to take on contract management such as diarization of key contract dates. That should be for the business groups. Make it clear that Legal helps with the contracts, but does not manage them.

Other questions: what is the file naming convention, is metadata automatically stripped from email documents, if open space for lawyers comes along what position will you take on it, do you have mentoring/buddy systems for new lawyers and are you coaching the new juniors, can you pay for continuing legal education, what’s the precedent system like, do you have approved templates internal clients can use in simple matters like consulting contracts, how are requests for legal help made (do they all come to you, go through an online queuing system, or does a client just call their favourite internal lawyer)?

How collegial and happy is the department and are there recruitment and retention challenges. If so, why? Do new hires know the limitations of the annual raise process? How experienced should your lawyers be, senior or junior, and what are the implications?

Tell your team what’s going on in the company, listen to them, support them. It’s about them, not you. And don’t take the best office for yourself!