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Legal’s client is the company – the company in its entirety. So, to be able to support the company’s interests and mission, Legal must be able to act at the operational level as well as at the more strategic, holistic level upwards towards the management and board.
Whether Legal has come a long way on its journey towards business partnering, or whether the journey has just begun, having an anchor point in the top management is both necessary and natural.
The top management is a major stakeholder of Legal in several respects. On the one hand upwards, when Legal functions proactively as an advisor to the management and the board, supports the management’s responsibility for safeguarding the company’s interests and risk management, and provides advice for preparing the decision base. And when Legal is an informal centre of attention and mouthpiece for the parts of the business that are not represented in the boardroom – the mouthpiece of the business, so to speak.
Downwards towards the business, the management is a major stakeholder of Legal since it helps ensure that Legal has a voice through the management’s support for, for example, change projects driven by Legal. This contributes to a positive perception of Legal as a commercial, value-creating partner.
And actually, perception is decisive for changing people’s view. And it requires hard work. The truth is, after all, that – if parts of the business are to change their view on their cooperation with Legal – it is in many cases helpful if the management supports the process.
A request from the management to consider Legal more than merely a legal engine could have a positive impact not only on the perception of Legal, but also when it comes to safeguarding business interests.
Thus, it would be an advantage if Legal secures support for the process from a member of the management. If the Head of Legal is not already a part of the management, it will more often than not be the CEO, the CFO or a HR Director who could sponsor Legal’s positioning journey – both as regards the advantages of involving Legal in the daily support for operations such as contracts, and as regards the roll-out of projects such as compliance programs and contract management.
Get closer to the management
How can Legal be included on the agenda of the management and board?
Often, Legal has a natural approach to the board when performing the role as its secretariat. Though this role may, at first glance, seem to be limited to that of a mere secretariat, it may nevertheless present a possibility for Legal to play itself into the field as a proactive sparring partner to the board and management when considering the company’s strategic goals and when making specific decisions.
This can be done actively by:
- Providing advice to the management about its obligations and responsibilities as well as about any special focus areas in the horizon (new legislative requirements or demands from clients/partners)
- Directing management’s attention to issues in the strategy that may result in legal focus points
- Putting the decision makers’ own agendas under Legal’s magnifying glass, thereby directing attention to contexts and overlaps.
Having a seat at the table where decisions are made would make it easier for Legal to identify any correlations between and consequences of decisions across the business, thereby ensuring a homogenous and effective decision-making process promoting the goals of the company as a whole.
Assume the role as your organisation’s sheepdog
Not only does the management have access to skilled legal counsel in Legal who can advise about responsibilities, obligations and risks. They also have access to a treasure chest of cross-organisational insight.
As an in-house legal counsel, you work across the entire organisation and at all management levels. During a typical workday, you will therefore be extremely operational and provide support for both the business in the engine room and the management on the navigation bridge by providing consultancy at a strategic level.
Thus, as a legal counsel, you get unique insight into and perspective on the business that nobody else can bring into the boardroom. Not only does it make it possible for Legal’s counsellors to gain influence. It also results in them having a responsibility for ensuring that the unique insight is used to bridge the gap between the top management and the rest of the organisation. Thereby making it possible to execute on the ambitions and potential of the company in the best possible way.
Considering this function a centre of attention provides an often overlooked source of value – to both the management and to Legal as such, which may – without sufficient structure and resources – lose itself in operational tasks. But should Legal be able to lift itself to a strategic level where the sum of cross-organisational knowledge could bring about new perspectives for the management’s considerations and decision base, much value is to be gained.
Ensure that the management is always informed about any risks through a decision document
In most companies, the management is not involved in the contract negotiations performed by Legal. But once the contract negotiations have been completed, the management is to consider whether it wants to conclude the contract after all.
But how can Legal make it easy for the decision-makers in the company to decide whether to sign a contract?
Filling in a pre-defined decision document with the risks identified by Legal in the contract concerned would be an effective and service-minded way in which to make it easy for the management to decide whether to sign. This document should contain the following: Which impact the risks would have on the company, and what has already been done – and what could be done – to reduce the negative impact of the risks identified.
The advantage of such a document – a decision matrix presenting the legal risks and a qualified position on the risks – could be linked to a commercial decision matrix. So that the management is, by means of both documents, made aware of all types of risks in a particular context.
In some companies, the management also wants separate information about specific issues. These issues could be incorporated into the document, thereby giving the management an experience of being appropriately informed to make the right decision.
This type of document will ensure that decision-makers are informed about the relevant terms of the contract before signing it. At the same time, Legal could use the document to show that Legal has informed the management about all relevant terms and conditions and contributed positively to the decision-making process with their legal professionalism.
Last but not least, work on a document containing both legal and commercial terms and conditions would also support dynamism and closer cooperation between Legal and the business. Quite simply because most of the terms and conditions stipulated in this type of document are best clarified through continuous dialogue.
Do you want to go from intention to action?
Positioning oneself internally in the company as a commercial partner is far from an easy job. And to achieve a successful start, it is important to consider the journey from both an operational and strategic point of view.
Would you like inspiration for how to prepare your management in the best possible way for making decisions on legal issues, then do not hesitate to contact Partner Trine Vissing or Director Stephan Christophersen, who can present specific proposals for how your Legal function can establish an anchor point with the management.
