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How to Set up an In-House Legal Department?

Introduction

In today’s modern business world, in-house legal departments have been experiencing exponential growth in prominence. In America alone, in-house lawyers have  grown 7.5 times faster  than law firms from 1997 to 2017. 

The main reason for this shift is that incorporating an in-house legal department helps businesses, from startups to multinationals, succeed in managing constantly changing landscapes and survive a highly competitive marketplace. These departments are deemed better equipped to grasp the complexities of the business and its connections than an external counsel. Today, half of corporate legal budgets are allocated to in-house resources, as per a survey conducted by the Association of Corporate Generals (ACC) in 2022.  

This article analyses how in-house legal departments can positively impact businesses and how a business can set up an in-house legal department. 

What is an In-House Legal Department?

An in-house legal department comprises a team of lawyers (also called in-house counsels) responsible for providing legal support to the business. The main differentiating factor between them and an external counsel is that they work exclusively for the business, so they can concentrate on important business matters and promptly provide customised solutions. This also means that their billable hours are not calculated based on the number of client cases they evaluate. Rather, their goals are consistent with the key performance indicators (KPIs) and the overarching corporate objectives of the business. 

What Do In-House Counsels Do?

The main job of an in-house counsel is to offer legal assistance and reduce any potential risks for the business by ensuring that the business complies with all applicable laws and regulations. The exact job description shall depend on factors such as the sector that the company is working in, the nature of problems they are experiencing, and the work done by the company. 

An in-house counsel is expected to know the company and its departments comprehensively and allocate the required time to various jobs in accordance with the risk importance associated with each of them. They might even be provided with project management work, which ensures that the money spent on external legal support (if required) is utilised aptly. 

Today, in-house counsels are expected to fulfil the function of helping the company to remain competitive with lesser risks, strengthening the business-focused perspective of the company, being more closely associated with the value creation and generation, serving as a trusted advisor, improving corporate governance, and codify company policies and create knowledge capital. The general expectations from in-house counsels are to ensure:

• Business orientation familiarity 
• Cost sensitivity
• Efficiency and productivity
• Ability to provide proactive and strategic advice
• Flexibility and versatility
• Speed and agility
• Risk management and controls

When Should I Set Up an In-House Legal Department?

Rather than employing in-house counsel, most businesses start involving external counsel in their operations from the start. Even though this might seem more straightforward, the company loses out on the benefits of in-house counsels and departments. An important point of consideration here is that in-house legal departments do not just provide legal advice to a business; they also act as partners and counsellors since they are exclusively associated with the company. As the volume of legal work rises, there is an increase in the need for internal resources, which encapsulate the depth of business knowledge. Therefore, when your volume of legal work reaches a point where hiring an in-house counsel becomes more cost-effective than paying the exorbitant fees of an external counsel, know that it is the right time to bring in an in-house counsel by setting up an in-house legal department. 

Tips to Set Up Your In-house Legal Department

If you are now confident to set up your in-house legal department, the following tips shall be a helpful starting point for the same:

• Know the fundamentals of your business plan  – To be able to analyse the needs of your business and to set the expectations that you want your in-house legal department to fulfil, it is essential to understand your business requirements, objectives, shortcomings, and action plans. The best way to do so is to contact your Human Resources (HR) or the team responsible for the recruitment tasks. Through multiple conversations, you should be able to gather information about the intended goals for the department, the type of issues handled by them, the department strength, the management structure within the department, the qualifications expected, and most importantly, how the transformation shall take place from an external to an in-house legal department. Identify where the company struggled to fulfil its strategic and transactional goals, which can be done by talking to your existing team and all other important stakeholders. Ensure that you are considering your business requirements and coming up with a customised action plan for the department, which should be open to flexibilities and changes, at least for the initial period after its commencement. 
• Come up with a strategic plan and set up the in-house legal department  – Once you have come up with a proper strategic plan by taking into consideration all the short-term and long-term terms, you can go forward with setting up with your in-house legal department. Work on gathering experienced individuals with relevant qualifications and skills to join the team. They all must have defined department roles and a strategic purpose. Further, considering that their work affects the entire business, work towards building trust and harmony between various departments. This can be done by setting up workshops or company activities to build a good rapport between them. 
• Encourage the participation and use of technology  – Today, legal technology is the answer to achieving productivity efficiency, streamlining workflow, and meeting client demands. While the involvement leads to increased costs in the short term, it provides relevant returns to compensate for the costs. Therefore, ensure that your department is motivated to use and include such technology, and ensure that an adequate budget is being provided to the department. 

Important Titles and Roles in the In-house Legal Department

You can develop your accepted and personalised organisational structure for your department. However, the following list shall provide you with an idea about the standard titles and their roles within the department:

• General Counsel  – This role is the head of the department and, hence, is responsible for overseeing the activities of the department and ensuring that they match and live up to the strategic plans of the business. 
• Chief Legal Officer (CLO)  – A CLO can either be a substitute for a General Counsel or be an additional role in your structure, where they are more invested in the legal and compliance functions of the department. 
• Deputy General Counsel  – The title is directly below the general counsel, and the role is to assist the general counsel in management activities. While not mandatory, it is recommended for the individual to have a specialised area of their own (such as company law, intellectual property, etc.) to ensure that they are able to contribute and provide legal assistance, as required.
• Legal Director  – This position oversees a particular important practice area or division within the department. They are required to optimise operations, processes, and strategies within that division. Therefore, it is possible for multiple legal directors to exist within the department. 
• Senior Legal Counsel  – This position oversees all complex legal transactions and manages key legal processes. They are directly involved in mitigating legal risks for the company. 
• Other Counsels  – The company can invest in hiring practice area-specific counsels to make appropriate divisions within the department. Some standard titles can be – employment counsel, litigation counsel, regulatory counsel, data security counsel, product counsel, real estate counsel, etc. 

Measuring the Success of Your In-House Legal Department Through Top KPIs

Once you have successfully set up your in-house legal department and the department has started functioning, it is vital to ensure that you can measure whether the department can work efficiently by making more informed decisions, increasing business efficiency, and reducing legal costs. Some common KPIs that might be useful for this task are:

• Budget v. Actual Spend  – This comparison may be done monthly or yearly. The ideal way of comparing is by keeping track area-wise, such as contracts, litigation, intellectual property, corporate secretary, etc. 
• Measuring department spending as a percentage of company revenue  – This analysis can help understand whether the operations and management of the legal department can influence the legal spending, which in turn is growing or slowing down the revenue earned by the company. This also helps in comparing the performance of the legal department with that of other departments of the company. 
• Measure completed contracts  – This can be easily measured through a Contract Lifecycle Management tool, wherein you can keep track of the number of contracts completed and whether the figures can meet the established targets. 

Other KPIs may arise depending on the nature of the business. Here, you can either provide the responsibility of a specific KPI to specific individuals or consider hiring a General Counsel responsible for reviewing the work of the in-house legal department. Ensure that the company can receive periodic reviews of the team progress, to ensure that the team aligns with the company goals and objectives. 

Setting up an in-house legal department can be costly; however, over time, the team can become opportunity creators for the company. Therefore, by establishing a mechanism to form objectives and track the department’s progress, an in-house legal department can become the main reason for a company’s success story. 

If you wish to understand more about in-house legal departments or in-house counsels by experienced individuals with practical tips and tricks, consider reaching out to  LegaMart’s  team. You are just a click away from receiving trusted legal assistance and limitless opportunities for your specific jurisdiction. 

Frequently Asked Questions (FAQs)

Who is the head of an in-house legal department?

Generally, a General Counsel is responsible for overseeing the legal department’s working and performance. The company may also split the position into Senior and Junior General Counsel, depending on the level of experience expected. 

What is an in-house legal department vision statement?

An in-house legal department vision statement is a document used to establish the purpose of creating the department. This statement is also used as a guiding principle for the department, in line with the company’s objectives and goals. Therefore, it is required to be drafted clearly, with no ambiguities. 

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Benefits of a strategic plan for your Legal Department

It’s important to have a strategic plan for your in-house corporate Legal Department. It provides your team with a roadmap that aligns with the business and indicates how legal fits into the bigger picture. A Legal Department strategy plan will help you:

• Accomplish meaningful improvements in process 
• Find operational adjustments that enhance service delivery (and your quality of life) 
• Demonstrate value to your organization, executives and business clients
• Create a shared vision, common goals and accountability in your legal team
• Establish a sense of purpose and be valued as a strategic partner
• Improve resource allocation
• Make your legal team more efficient
• Strengthen relationships with your internal clients

What do we want to accomplish with our Legal Department strategic plan?

The first step in creating your in-house Legal Department strategic plan is to determine where you want to go: How do you want your in-house law department to look at the end of the year?

We appreciate the advice of Sterling Miller , the general counsel of Marketo, Inc., who writes: “Legal departments do not always lend themselves to neatly setting goals like the business units, i.e., it can be difficult to measure ‘success’ in legal vs. measuring profits and sales or setting key performance indicators (KPIs). That said, setting goals for the department is important and a fresh opportunity to take stock of many things… Don’t shirk the opportunity and think of goal setting as some kind of pain-in-the-neck HR exercise you have to muddle through… there will be a payoff for you and your team if done properly and with some enthusiasm.”

What are some examples of Legal Department strategic goals?

Every in-house Legal Department is different, and your Legal Department goals will be tailored to your specific situation. But if you’re just not sure where to get started, Miller provides his sample “Big Five” top-level goals , which he would use to build specific steps and measures. Below are some Legal Department strategic goals to consider:

• Build and retain an exceptional legal team with extraordinary people
• Meet legal budget targets
• Prioritize and complete high revenue/cost saving and strategic commercial agreements
• Deliver on strategic transactions and initiatives (mergers, joint ventures, acquisitions and key deal activity)
• Defend and protect the interests of the company (litigation, IP, government affairs, compliance).

“The key,” Miller writes, “is that everyone is rowing in the same direction under the Big Five.”

Get started with your Legal Department strategic plan now

Are you ready to craft your Big Five Legal Department goals and strategy? Are you ready to start your year with some strategic direction? Download Xakia’s ready-to-use Legal Department Strategic Plan Template today to get started on your in-house Legal Department goals and objectives.

Download the Strategic Plan Template now >

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Key Goals and Objectives for In-House Legal Departments To Drive Efficiency

In recent years, the role of in-house counsel has evolved to become a more strategic business partner that supports the company's general goals. As in-house teams hold an increasingly relevant position within their organizations, it is essential to set performance objectives that reflect this shift. 

One of the primary differences between average in-house legal teams and the most successful ones is their ability to identify and evaluate issues, and implement effective solutions quickly. This article will discuss the objectives that high-performing corporate counsel should strive for and the best ways to pursue and track them. We'll also look at the key metrics to help measure their success. 

How Clear Objectives Can Benefit Corporate Legal Departments 

You can articulate your department's functional purpose and value by defining objectives and corresponding key results that align with the business goals. 

Setting objectives and KPIs can also be extremely helpful in measuring and improving an in-house legal team’s performance. However, setting too many goals can be counterproductive and limit the team's ability to achieve them. 

Reducing the number of objectives to just three or five per quarter can help the team focus on what's important and increase their chances of success.

New Goals of In-House Legal Departments as Strategic Business Partners

An emphasis on clarity of goals, proactive communication, and reporting can go a long way when aligning department objectives to the company goals. The legal department's goals as strategic business partners should be purpose-driven, forward-focused, actionable, and measurable. 

Recent studies forecast that the main challenges in-house counsel will face in coming years are leveraging technology to increase efficiency, managing costs in an inflationary environment, and focusing on Environmental, Social, and Governance (ESG) issues. 

With these in mind, here are some examples of the most common goals forward-thinking legal departments are aiming at: 

Financial Goals 

• Meeting budget targets
• Decreasing external legal spend
• Optimizing billing systems

Purpose-Driven Goals

• Create or amend legal contracts and general policies to include ESG compliance
• Expand diversity and inclusion initiatives on legal departments 

Forward-Focused Goals

• Better defend and protect the interests of the company — litigation, IP, government affairs, compliance
• Implement technology to automate traditionally manual workflows
• Create a data breach mitigation strategy
• Find the best firm for each matter

It's tricky to find key metrics that fully encompass the nuanced work of in-house legal departments. However, it’s important to find ways to break down the legal team’s goals into individual KPIs to track progress and identify potential roadblocks. 

The Top 6 KPIs for In-House Legal Teams 

Because every legal department has different priorities, the metrics used to evaluate its performance will vary by industry, budget, and overall goals.

Below are some standard metrics that most in-house legal teams can use to track how they’re pacing towards goals and make better, more informed decisions, increase efficiency, and reduce legal spend. 

Measure Budget vs. Actual Spend

This is a crucial KPI because it reveals how close you are to your budgetary goals and highlights where inefficiencies may occur. 

You need to track this by Year to Date (YTD) and Month over Month (MoM). You will want to report on the overall YTD expenditure vs. planned over the previous year. 

Ideally, you would track by sort of subject, such as litigation, contracts, corporate secretary, intellectual property, etc. You can additionally track the average hourly rate for outside law firms and how the department is doing against any savings measures that might be in place.

Measure Department Spend as a Percentage of Company Revenue

Measuring the law department's spend as a percentage of company revenue can show how changes in the department's management or operations can influence whether legal spend is slowing down or growing on par with the company year-over-year relative to revenue.

It can also help set benchmarks for the department and show how it is performing compared to other departments within the company. Specifically, you'll want to track internal spend on legal matters, external spend on legal matters, and the combined total of spend as a percentage of company revenue. 

Evaluate Outside Counsel Performance

As one of the most significant budget lines for the law department is the outside firm expenditure, there are several reasons why you should formally evaluate outside counsel. Formalizing evaluations will set quality management expectations and enable discussions about external counsel performance. 

You can track specific metrics like the actual spend against the initial budget, the number of law firms used the number of legal matters each law firm handles, and fees paid to each firm. This information can help in-house legal teams make informed decisions about assigning work to certain law firms in the future.

Measure the Source of Legal Spend by Business Unit

By identifying which business units require the most legal assistance and why, the General Counsel can make strategic decisions around distributing incoming work.

It may make sense to increase headcount or to hire specialists to meet a certain corporate division's needs. Teams might also decided to invest on training, especially if various business units have seen a rise in the same types of legal problems.

Track Legal Team’s Productivity

Keeping track of lawyer and legal assistant workload and productivity is an important aspect of running a law department. 

Using metrics to evaluate productivity in the legal department may help a General Counsel identify employees that are meeting or failing department expectations, find ways to improve team performance, and recognize high-performers.

Measure Attorney Performance

General Counsels can use several metrics to measure attorney performance. Some of the most important ones include the number of matters opened and closed, the amount spent on outside legal services, and the cycle time per matter. 

Measure Legal Ops Staff Performance

Likewise, you might want to consider the efficiency of contract management, eDiscovery projects handled, amount of documents reviewed, or legal issues researched for legal ops staff. 

Before implementing productivity metrics, a General Counsel should ensure that each team member understands how their performance will be measured.

They should also consult with the company's human resources department to verify that the metrics are consistent with the employee's job responsibilities and the company's employment policies.

Measure Completed Contracts 

Contract Lifecycle Management is concerned with the lifecycle of contracts, from start to end. Reviewing and optimizing this process could find the most significant cost savings. 

It might be simply a raw number, or you can track it against a target established at the start of the year. If you'd like to be more precise, you can break out the number of contracts by type, such as commercial, NDA, vendor, complex, simple, value, or any other type of contract your department deals with.

Checklist to Setting the Right Goals for Your In-House Legal Team

Here’s a simple checklist that can help you set strategic OKRs for your legal department: 

• Brainstorm your goals. What do you want to achieve? Keep your company’s targets in mind as you develop your action plan.
• Determine your measuring system. Find the data that you already have and how to organize it. 
• Write down your Objectives and Key Results. Drill down to the most important 3 - 5 objectives and the metrics you’ll use to track them. 
• Give each key result an owner. While key results are a result of the whole legal department’s performance, one individual should be in charge of monitoring progress.
• Create a report. You'll want a visual representation that allows you to present your progress and provide qualitative observations and interpretations. 
• Periodically review for alignment and utility. Establish a system to keep you informed of broader company goals and objectives (this might be a routine meeting with key stakeholders or constantly tracking business OKRs.)

As in-house legal teams evolve from cost-centers to opportunity-creators, setting performance objectives aligned with their new role within the organization is essential. By taking the time to establish measurable objectives and track progress, you can ensure that your team is contributing effectively to the company's overall success.

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Ten Things You Need to Know as In-House Counsel®

Twenty years of experience in ten points™, ten things: how to create a strategic plan for the legal department.

Running an in-house legal department is not an easy job, regardless of whether you are a legal department of one or a legal department of 200.  To start, there is never enough money, people, or time to get everything done.  Second, priorities change frequently so prioritizing where to focus your scant resources is a challenge. Third, the business often considers (wrongly) that the legal department is simply another cost center and/or necessary evil, meaning the legal team is ignored or marginalized – treated like outsiders vs. an integral part of the business.  And fourth, the legal department often lacks strategic direction, reacting to problems vs. planning for them.  I have dealt with (including failing at) all of these issues – and more – as an in-house lawyer, especially as general counsel for multiple companies over the course of a long in-house legal career.  I wish I could tell you that solving these problems is easy, but it is not.  The biggest hurdle is that it’s hard to plan in advance when most of your day is spent frantically trying to dig out from under the incredible amount of work dumped on your desk or when cleaning up the latest catastrophe brought on by the knuckleheads in [ insert business group name here ].  Still, in order to be successful as an in-house lawyer and create a legal function that fits snugly within the cloak of the company’s strategic goals and plans you must make time for planning.  It’s that simple.  Sure, you can mutter curses at me under your breath or chuck imaginary (or real) [1] rocks at your screen as you read this, but I am just telling you what you need to hear – not what you want to hear.  The good news is that creating a strategic plan for the legal department is difficult but pretty straightforward and something you can accomplish if you set your mind to it (and let others help).  So, hold the rocks and creative profanity for a few minutes as this edition of “Ten Things” discusses how you go about creating a strategic plan for the legal department:

1.  What is it?  A legal department strategic plan is simply a map setting out how the department will get from A to B.  You can make it as simple or as complicated as you want to make it (though I always vote for simple over complicated).  Essentially, it is a written guide to help the legal department better align its resources and activities with the strategic and business goals and objectives of the organization.  It generally sets out the legal department’s mission, goals, strategies, and specific actions – including KPIs – over some period of time (i.e., one year, three years, five years, etc.) that will allow it to more closely align the legal team with the rest of the business.  The benefits of creating a strategic plan for the department include:

• Direction for the legal team.
• Proactive risk management.
• Better alignment (and relationships) with the business.
• Increased efficiency and effectiveness in the delivery of legal services
• A framework for measuring performance and identifying areas for improvement.
• Stakeholder confidence in the legal function.
• A map to/basis to make the case for asking for more resources for the legal team.

2.  How do I go about creating one?   Damn.  I was afraid you’d ask that and right here at the beginning of the blog.  Really?  Okay, fine.  I’ll tell you.  Start with a commitment to create one and see it through to completion.  I know that sounds a little trite, but it is crucial that you (and your team – if you have one) agree that creating a strategic plan is important and a priority of the department.  If you are doing it grudgingly because someone is making you do it, [2] then the exercise will most likely fail or you will create a plan that sits in a drawer and gathers bugs and dust.  Neither is a great outcome.  Second, pick the team that will work on the plan.  Sure, it may just be you and that’s fine, but if you are part of a legal department of any size, the exercise will be far more likely to succeed if many hands are helping with the work.  Start with volunteers, i.e., those interested in the exercise but also look to place a skeptic or two on the team.  They will help balance out the effort and give you a more realistic plan vs. pie in the sky, which you will generally get from the eager beavers.  If you are fortunate enough to have a legal operations person or team, they are definitely on the team.  Third, set a deadline to complete the plan (otherwise it will keep getting pushed) and set regular check-ins to monitor progress, answer questions, give direction, and keep things on schedule. Fourth, don’t boil the ocean.  Your first strategic plan should be simple.  Over time you can make it more complicated.  And lastly, pick a format, i.e., what do you want the work product to look like?  Is it a Word document, a PowerPoint, or a combination?  How detailed will it be?  Will you need charts and graphs? [3]   If you are a member of the ACC, you can access its strategic planning resources , with templates.  Same for members of CLOC .  You can also find plenty of free templates online.  You may not use them “as-is” but they can help get you started.  See, e.g., Gartner , Xakia , Exigent , or Lawcadia . [4]   You can also just bypass the legal department-specific templates and search out generic strategic plan templates, e.g., OnStrategy .

3.  Assess where you are today .  All right, you’re ready to get started on this unforced march to creating a strategic plan for the legal department.  Next step?  Create a baseline, i.e., where is the legal department today.  To do this, you must know what areas your strategic plan will cover.  In my experience, here are some of the most likely areas you will focus on:

• Retention/Attrition
• Sources for talent
• Skills in place
• Skills to develop
• Data Privacy/Data
• Risk management
• Corporate governance
• Next 12 months
• Next 36 months
• Next 60 months
• External (outside counsel, vendors)
• Future needs
• On-hand now (and is the department maximizing what’s on hand?)
• Needed in short term
• Needed in long term
• Cost and favored solutions
• Applicable benchmarks
• Measurements required by the business
• Measurements of interest to the department

This above is pretty high level.  There will be a lot more to it in an actual plan but these high-level topics will get you started (or at least highlight the different areas to focus on as you build out your plan). It also underscores that strategic plans are not cookie-cutter documents. What works for your department depends on the particular needs and circumstances of your situation.  So, as always, do what works for you and not what the Bobs tell you to do.

4.  Prepare a SWOT analysis .  One simple, yet highly effective what to start developing your plan is to build out a “SWOT” analysis of the legal department. A SWOT analysis is a shorthand way to set out what the legal department is good at ( Strengths ), what it is not so good at ( Weaknesses ), where there are opportunities to add value to the business ( Opportunities ), and what you need to watch out for ( Threats ).  You can create one for each part of your plan, i.e., one for people, one for technology, and so on.  A 2×2 SWOT matrix is a common tool utilized by businesses all over the world (and if you have worked in-house long enough you have likely seen one – or a thousand). I went into a lot of detail on how to do this in a prior “Ten Things” post on creating a SWOT for the legal department so I won’t repeat the “how to create one” here.  Let’s just say that a SWOT analysis is a great first step in building out your strategic plan for the legal team.  Here is what it looks like:

All you need to do is start filling in the boxes.  Simple and effective.  I like to create SWOT boxes on a whiteboard.  But, I am old.  You can now create them online in Teams , Zoom , using ChatGPT (which is actually kind of cool), etc. [5]   So, however you want to do it is fine.  But, seriously, consider a whiteboard and make an old guy happy.

5.  Get input from others . This one is uber important. Sure, you could create a legal department strategic plan all by yourself but that would be what scientist people call a big f#$&ing mistake (or “BFM”).  So, don’t do that.  Instead, cast a wide net to get input from as many sources as you can.  Not only will you get better information to base your plan on, but you will also engender a lot of goodwill by simply asking different parts of the business for their ideas.  Here is a basic list of people to reach out to for input:

• Your team (start with these folks) – a legal department offsite is a terrific place to start to gather input from your team.
• Senior management (the C-Suite and heads of key groups – business and staff – throughout the business).
• “Super Users,” i.e., people or groups that are big consumers of legal services.  They will definitely have thoughts on this.
• Strategy team (if your company has a group dedicated to corporate strategy, get their input).
• Outside counsel (seems odd but they likely have some helpful ideas and would love to share them).
• Look backward (take some time to mull over the past year or two and what worked well and what didn’t work well and how you will fold either enhancing or improving on those areas into your plan).

You can interview people or create a survey to get input.  And, of course, get your hands on the company’s business plans and goals for the next year and beyond.  Likewise, any long-term strategy documents you can access go on the pile.  Lastly, come up with your own ideas about what matters to the legal department.  If you are a long-time reader of this blog, you know this is an exercise I did at the beginning of every year (and still do).  To see an example, check out my “Ten Things” post on critical issues for in-house lawyers (2024 edition) .

6.  Where do you want to go?  Regardless of whether you are the CLO, general counsel, or just a cog on the team, a critical component of strategic planning is understanding where you want the legal department to go .  It’s wonderful to get input from different groups and dig into corporate strategy documents.  That is all very helpful.  But, at the end of the day, it rests on the leaders of the legal department to set the course.  So, what are your priorities?  Do you want the team to get bigger?  Do you want more technology?  Do you want more focus on a particular area of the law?  Do you want to be more strategic ?  Create better processes ?  Do you want to maximize the value of the legal department ?  Do you want to be more productive ? [6]   Is it all of these or a combination? The choices are almost endless.  But, it all comes down to the strategic vision of the leader of the department (usually with input from other members of the legal team).  Don’t lose sight of the fact that at the end of the day, the legal department will determine the direction of the legal department.

7.  What do you need to do to get there?    As you start to sketch out your goals, i.e., what you want to do, you also need to think hard about the “how,” i.e., what steps will you need to take to achieve the goal?  This can be as detailed or high-level as you want it to be (or that time allows).  But the idea here is to not only set out the goal but the steps you will take to achieve it.  For example, you may have a strategic goal to decrease outside counsel spend by 10% year over year for the next two years.  The next step is setting out how you will do that.  For example:

Strategic Goal : Decrease outside counsel spend by 10% year-over-year in 2025 and 2026.

• Identify work to bring in-house by [date].
• Identify and then move work to lower cost/high quality law firms by [date]
• Ask current law firms for an across-the-board 10% decrease in fees by [date].
• Create new role in department: “AI Czar” to maximize opportunities by [date].
• Create policy for use within the legal department by [date].
• Identify 10-15 most impactful uses for the department and train the department on how to draft prompts and use the tool by [date]
• Set yearly update process by [date].
• Provide copies of guidelines every January to all outside counsel and other vendors.
• Set expectations on cost with outside counsel on every project starting [date].
• Identify inefficiencies in current vendor pool by [date] and negotiate better deals or move to different vendors by [date].

Goals are great but it will be the steps (and target dates) to accomplish the goal that truly matters.  As you can see, you can make these hyper-granular or more general.  But, you must set out steps that you can measure or, more likely, create KPIs and regular check-in meetings to track progress.  Additionally, you should prioritize the goals so the most important ones get the most attention.  If you have 20 goals in your strategic plan, you already know that you cannot give equal attention and resources to each. Some will simply be more important than others.  Put the most important at the top of the list.  Most importantly, be flexible.  I can tell you from experience that the items on your strategic plan in 2024 will look different come 2026.  It’s just the nature of the beast.  If/as priorities change, roll with the punches.  Expect to constantly update and change your plans (or at least the steps designed to achieve the plan).

8.  Focus on culture .  There will be a lot of candidates for inclusion in your strategic plan.  One area that should be high on the list of priorities is the culture of the legal department.  The right culture is critical to getting things done, in the short term and over the long term.  Consequently, your plan should contain a section on people and how best to attract, train, and keep the best ones and, if necessary, how to identify and manage out anyone that doesn’t fit what you are trying to accomplish.  I’ll be a bit blunt here:  I will take “drive” over “talent” pretty much any day of the week.  Similarly, I will take a good/positive attitude over super-talented but negative (and surly) all day long as well.  Why?  Because drive and attitude will lift the entire department and reflect well on the team overall.  Surly, lazy, and entitled will bring the entire department down and reflect poorly on the team.  Next, I want doers and not order-takers.  Doers are self-starters who do more than is asked, are proactive at spotting and solving problems, and are always raising their hand to help.  Order-takers are looking to do the minimum they have to do to get by and if you didn’t tell them to do it, they are not looking beyond the specific project or assignment.  Lastly,  I want a department of people who are looking after each other, are willing to help others, and – most importantly – do not want to ever “be the problem.”  If you have a legal department full of people like this, you will not only achieve your strategic goals, but you will also have fun doing it and the business will flock to your banner because the legal team is approachable, positive, and built to help them solve their problems.

9.  Keep it updated .  One thing many in-house legal teams forget is that a strategic plan is not static.  It needs your constant attention and must be nurtured and altered as circumstances warrant.  Once you create your plan, set a monthly meeting to discuss it among the leaders of the legal department (or with yourself if you are a department of one ).  Track progress, deadlines, barriers, successes, etc.  Make changes as needed, i.e., if something was a strategic goal in March but by September circumstances have passed it by, delete it and replace it with a goal more in tune with the new reality.  In other words, don’t keep pounding away on something that is no longer strategic to the needs of the company or the legal department.  Hit delete and move on.  Lastly, share the progress (or lack of progress) with the full legal team and ask for their feedback on ways to go faster or overcome a barrier.  You will be pleasantly surprised with what you’ll hear – especially if you give them some warning in advance that you are looking for their ideas.

10.  Market the plan .  Once you have created a strategic plan don’t hide it like a Hobbit’s magic ring. Make sure the leaders of the business know what you have created.  At a minimum, you have sought their input on what the plan should focus on.  Now you can let them know that their input had an impact on the strategic direction of the legal department!  A big part of being a successful legal function is understanding that you must market the legal department every day .  A strategic plan is just another great tool to demonstrate the value generated by the department and – more importantly – that the legal department is part of the business, aligning itself with the strategic needs of the business (and is not off with its head up its ass working only on things that no one but lawyers believe are important). [7]   Do the following:

• Unveil the plan to the C-Suite and other leaders of the business.  Tell them you took their input into the plan but if anyone has additional feedback or ideas, the legal department welcomes hearing from everyone.
• Create KPIs or other metrics to track progress and report on that progress to the C-Suite and other leaders regularly.  Many won’t care (and that’s fine) but a lot will care and their engagement in your success will pay off down the road as these leaders will “get” the value provided by the legal team.
• Showcase the innovation of the legal function.  Tell the business of creative ways you are solving problems or are using technology or other business techniques (e.g., Six Sigma ) to hone and refine the ability of the legal department to get the right things done as effectively and efficiently as possible.
• If you are falling behind on a strategic goal, let the business know your plan to get back to “green.”  If there is one thing the business loves is to see a plan on how a part of the business will get things “back on track.”  Use that to your benefit if not everything is green across the board.
• Solicit their ideas and suggestions.  Let the business know that the legal team values their input and is eager to take advantage of the experience and ideas that senior management can bring to the table.

There is a lot of meat on the bones with this post.  Creating a strategic plan for the legal function is not easy, but it is more than worth the effort.  Besides giving direction to the department, it provides an opportunity to work closely with the business (and members of the department) and tie the efforts of the legal function to the strategic goals and direction of the business.  When the business sees that legal “gets it,” your life as an in-house lawyer will be significantly improved as you will become part of the inner circle and not “those legal guys down in the basement.”  And, it will keep the Bobs happy too, which shouldn’t matter – but it does.

Sterling Miller

May 31, 2024

It has been a slog but book number six is in the hands of printer and will be out in late June/early July.  I am excited and pleased to share the front cover with you for the first time.  The book is called The Productive In-House Lawyer: Tips, Hacks, and the Art of Getting Things Done .  I think you will find it a true resource for yourself and the legal department as a whole.  Still, I will miss seeing the ABA Book Writing Enforcement Team thugs outside my window late at night.  I think now they will release my kitten.  But, here is the cover of the book in its first fully public appearance.  Let me know what you think!

My fifth book, Showing the Value of the Legal Department: More Than Just a Cost Center is available now, including as an eBook!  You can buy a copy HERE .

Two of my books, Ten Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies and Ten (More) Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies Volume 2 , are on sale now at the ABA website (including as e-books).

I have published two other books: The Evolution of Professional Football , and The Slow-Cooker Savant .  I am also available for speaking engagements, webinars/CLEs, coaching, training, and consulting.

Connect with me on Twitter  @10ThingsLegal   and on   LinkedIn   where I post articles and stories of interest to in-house counsel frequently.   

“Ten Things” is not legal advice nor legal opinion and represents my views only.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers.  If you have questions or comments, or ideas for a post, please contact me at [email protected] , or if you would like a CLE for your in-house legal team on this or any topic in the blog, contact me at [email protected] .

[1] Not recommended unless you get monitors for free.  If you do, let me know.  You are my new best friend.

[2] Most likely the CEO, CFO, Board of Directors, or (worse) the “Bobs.”  The Bobs (lifted from the brilliant movie, “ Office Space ”) are big-time consultants hired by the Finance team (or the board) to advise you (legal department) on things they know nothing about. They ask a bunch of questions and then put your answers into a cool PowerPoint and charge the company a ba-jillion dollars for regurgitating what you told them.  If you are really lucky, they have a bunch of benchmarks that bear no semblance to how your department functions but they will measure you against these inapplicable standards as a way of justifying the ba-jillion dollars.  Then, three months after paying the ba-jillion dollars the slick PowerPoint, with “pillars,” buzz-words, and other useless ideas goes into a big bag labeled “Shitty Consultant Ideas” which is then weighed down with bricks and tossed into a deep pond and never seen again (unless you have a mini-submarine or scuba gear).  If it sounds like a racket, it is.  The good news is that the Bobs are generally freshly minted MBAs and fairly useless so you can bullshit them all day long and pretend they are being helpful until they go back to Boston or New York or whatever level of Dante’s Inferno they crawled out from.  And that’s all I have to say about that.

[3] The answer to this question is always “yes.”  The business lives for charts and graphs so give them what they want!

[4] Note that you will need to give them your email and other information so you’ll likely get a lot of marketing emails and calls.  Sorry, that’s the price of “free.”

[5] I assume there is a whiteboard feature with Google Meet but I am too lazy to Google it and find out.  So, the ball is in your court on this one.  Let me know what you find.  Crap.  I probably could have Googled it already.  Damn you irony.

[6] Yes, this is a shameless plug for the new book on productivity coming out in June/July 2024.  Buy it.  And buy a few copies for your team and friends.  You’ll feel better for doing so.  You’re welcome!

[7] There are certainly things that lawyers focus on that are necessary to the success of the business even if the business doesn’t know or care about it.  But in-house lawyers ignore the priorities of the business at their peril.  Most of the effort of the legal team should be directed at understanding business priorities and making sure it is spending most (but not all) of its time pushing those priorities forward – and telling the business about it!

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Creating a strategic plan for a legal department, as outlined here, is not just a roadmap but a crucial tool for aligning legal efforts with broader business goals. It addresses the perennial challenges of resource scarcity and changing priorities by advocating for proactive planning over reactive firefighting. Emphasizing collaboration and commitment, this approach not only enhances efficiency and risk management but also fosters a culture where the legal team is seen as integral to the company’s success. This article provides a clear framework for any legal department looking to navigate complexity and deliver value effectively.

Thank you Kattia!

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Best practices

Structuring your in-house legal team for success

Table of Contents

An in-house legal department is a crucial strategic asset, but only with the right structure and operational rigor. Here are some best practices for designing an efficient and business-aligned legal team . Whether leading a small team or a global legal powerhouse, you'll gain actionable tips for structuring an in-house legal department that drives business value.

What does an in-house legal department do?

An in-house legal department plays a crucial role within an organization, acting as both a guardian of the company’s legal health and an advisor on a broad spectrum of legal issues that affect the company’s operations, strategy, and risk management. The responsibilities and functions of an in-house legal team are diverse, reflecting the multifaceted nature of modern business environments. The exact scope of the in-house legal department’s role can vary widely based on the organization’s size, industry, and specific needs. 

Here’s an overview of some typical functions and responsibilities of an in-house legal department:

• Legal Compliance and Risk Management:  Ensuring the company complies with all applicable laws, regulations, and industry standards. This involves monitoring changes in legislation, advising on legal risks associated with business operations, and developing strategies to minimize those risks.
• Contract Management:  Drafting, reviewing, negotiating, and advising on contracts with customers, vendors, suppliers, partners, and employees, and ensuring contracts are in the company’s best interest while managing legal and financial exposure.
• Corporate Governance:  Advising on corporate governance practices, including compliance with corporate laws, drafting and implementing internal policies, and assisting with board meetings and documentation.
• Intellectual Property (IP) Management:  Protecting and managing the company’s intellectual property assets, such as patents, trademarks, copyrights, and trade secrets. This includes advising on IP strategy, handling registration processes, and managing disputes or litigation related to IP.
• Employment Law:  Helping the company manage its human resources responsibly and legally and advising on employment law matters, including hiring practices, terminations, employee disputes, and compliance with labor regulations, and 
• Litigation and Dispute Resolution:  In-house legal departments often hand;e litigation and manage disputes, whether through negotiation, mediation, arbitration, or court proceedings. This includes developing litigation strategies, managing external counsel, and advising senior management on legal risks and strategies.
• Regulatory Affairs:  Especially in highly regulated industries, in-house legal departments advise on regulatory compliance, engage with regulatory bodies, and participate in regulatory processes, including submissions, inspections, and inquiries.
• Mergers, Acquisitions, and Divestitures:  In-house lawyers play a key role in mergers and acquisitions (M&A), from due diligence to negotiating terms and managing the legal aspects of integration or divestiture.
• Legal Education and Training:  Providing legal training to various departments on relevant legal issues, such as compliance, data protection, and anti-corruption practices.
• Strategic Business Advisor:  Beyond their traditional legal roles, in-house legal teams often serve as strategic advisors to the executive team, offering insights on legal aspects of business strategies, market expansions, and other critical business decisions.

The  ACC 2023 Law Department Benchmarking Survey  (the “ACC Survey”) found that the top five most common functions in the legal department are compliance (77%), privacy (70%), ethics (52%), risk (34%), and government affairs (27%).  For a deeper dive, learn about the in-house legal department titles, roles and responsibilities in our guide.

How should you structure a legal department?

The answer to how to structure a legal department is the tried and true lawyer response to any question — it depends. There is no one-size-fits-all law department. Structuring an in-house legal department is a dynamic process that must adapt to the evolving needs of the business, the legal landscape, and the team itself. A well-considered structure enhances the legal department’s efficiency and effectiveness and aligns it more closely with the organization’s strategic goals. Thoughtful consideration of legal department structure can also help attract and keep legal talent engaged. A well-designed legal department structure supports attorney career growth and retention. Clear reporting lines to a general counsel allow mentoring, training, rotational assignments, and promotion opportunities to motivate and retain legal talent. Here are some key considerations and strategies for structuring your in-house legal department.

Service needs of the business

When structuring a legal department, it is crucial first to understand the business and its legal service needs. The department’s structure should align with providing timely, efficient, and effective legal intake and support for the business. The company’s industry and business model heavily influence how the legal department should be set up. Consider what legal expertise is needed — is it mainly to support headquarters operations or to advise a specific business line? Typical headquarters functions include the corporate secretary, tax, intellectual property, and benefits specialists. Other areas that are often centralized include litigation, employment law, mergers and acquisitions, real estate, and antitrust. Ensuring the legal department structure matches the business needs enables the attorneys to deliver top-notch counsel.

Location of the in-house and legal operations professionals

Legal departments primarily adopt either centralized or decentralized structures to align legal with the business’s service needs. In a centralized model, all legal functions are staffed at one location, share one budget, and report to a single general counsel. However, in-house lawyers may have specific responsibilities and relationships, like a product counsel assigned to an internal product group.

In a decentralized legal team model, the in-house counsel and legal operations professionals are distributed across locations to support each business unit’s unique needs directly. Co-locating counsel with their business clients can be beneficial. With decentralization, these attorneys often view themselves as part of the business team, reporting to different business and legal leaders and subsidiaries.

For multinational companies, the geographic location of legal team members can be a significant factor. Consider local legal requirements, language barriers, and time zones. A decentralized structure, where legal professionals are staffed close to key business operations, can improve responsiveness and local compliance, though it may require more robust coordination mechanisms.

The choice between centralization and decentralization depends on the company’s strategy and how the legal department can best enable business goals. This highlights the importance of adapting the legal department structure to meet organizational objectives effectively.

Size of the department

The optimal ratio of legal department size to company size varies significantly across different industries and is influenced by factors such as regulatory environment, company strategy, and the extent of legal work that can be outsourced. Highly regulated industries and companies with extensive intellectual property may require larger legal teams relative to their size, while startups and younger companies might lean on external counsel more heavily. 

According to the ACC survey , the average legal team size by company revenue is as follows:

• Revenue under $1 billion: two lawyers and four legal staff members.
• Revenue of $1 billion to $5 billion: ten lawyers and 17 legal staff members.
• Revenue of $5 billion to $20 billion: 38 lawyers and eight legal staff members.
• Revenue greater than $20 billion: 80 lawyers and 145 legal staff members.

The ACC Survey reveals that the typical ratio of in-house counsel to employees stands at 1:300 on average. When broken down by company revenue, the average ratio of in-house counsel to employees is as follows:

• Less than $1 billion in revenue: 1 in-house counsel for every 193 employees
• Revenue of $1 billion to $5 billion: 1 in-house counsel for every 515 employees
• Revenue of $5 billion to $20 billion: 1 in-house counsel for every 467 employees
• More than $20 billion in revenue: 1 in-house counsel for every 714 employees.

The size of the legal department often dictates its structure. Smaller teams may benefit from a more generalized approach, with attorneys handling a wide range of legal matters. In contrast, larger departments can support a more specialized structure, with lawyers dedicated to specific areas such as compliance, contracts, or litigation.

Budget constraints play a critical role in structuring the legal department. It may limit the number of in-house specialists or the extent to which outside counsel can be leveraged. Efficient budget management might involve a mix of in-house generalists for day-to-day legal matters and external specialists for complex issues that require specific expertise.

Skills of the existing team

Evaluating the skills and strengths of the current team is essential. A team of generalist attorneys might be flexible and adaptable, while a team of specialists can offer deep expertise in critical areas. Balancing generalists and specialists based on the legal department’s needs and the nature of the business is key to effective legal service delivery.

For example, a tech company likely requires more intellectual property and data privacy expertise, whereas a manufacturing firm might prioritize environmental and labor law attorneys. Understanding the unique legal demands of your industry is crucial for determining the necessary specializations within your legal team. This may involve establishing dedicated support for different business units or focusing on areas of high demand, such as contract management or regulatory compliance. The goal is to align expertise with the legal issues that drive the most business value.

Existing legal team’s job satisfaction

The impact of structural changes on the legal team’s morale and job satisfaction cannot be underestimated. Engaging with the team, understanding their preferences, and considering their development aspirations will help design a structure that supports positive work dynamics and career growth.

What the CEO and senior leadership wants

Ultimately, the legal department must serve the organization’s strategic objectives, which means aligning with the vision and priorities of the CEO, senior leadership, and the board of directors. Understanding their expectations can guide the structuring of the legal department to support the company’s overall goals best.

Regularly reviewing the structure of the in-house legal department, in consultation with senior management and in response to changes within the business and the legal environment, ensures that the department remains aligned with the organization’s needs and continues to provide effective legal support.

What does legal operations do?

Legal operations , also known as legal ops, is a relatively new field focused on applying business practices and technology to improve the efficiency and effectiveness of legal departments. Essentially, they are the team tasked with running the legal department like a business so that the in-house attorneys can focus on legal analysis, not administrative work, budgets, and business planning. Here are some of the key responsibilities of legal operations:

• Process improvement:  Analyzing and optimizing legal workflows and procedures to identify bottlenecks and increase productivity. 
• Data analysis:  Leveraging legal spend, request volume, contract, and other data to inform legal strategy and legal department planning. 
• Technology management:  Overseeing legal technology tool evaluation, selection, and implementation for software such as intake and workflow automation , CLM, e-signature, and e-billing software.
• Vendor management :  Managing relationships with and spend on external legal service providers such as law firms and alternative legal services.
• Budgeting and cost control:  Developing legal department budgets, forecasting, and monitoring legal spending. 
• Cross-functional alignment:  Partnering with other company departments, such as IT, Sales, Finance, Procurement, Marketing, and more, to improve the delivery of legal services and systems.
• Strategic planning:  Supporting longer-term initiatives around legal service delivery, policies, risk management, and more. 

The legal ops role helps apply modern operational rigor to legal departments. With business and technology expertise, legal ops aims to improve the legal team’s value delivery. This role is becoming critical for modern legal teams looking to become more efficient.

Interviewing for a legal operations role? Prepare with our comprehensive guide to legal operations interviews .

When should you expand your in-house legal department?

The expansion of an in-house legal department is often dictated by the organization’s growth phase, the evolving complexity of the business, and the imperative for specialized legal expertise. Some situations include:

• Business Growth:  If the company is rapidly expanding into new markets or acquiring new entities, more legal support may be needed to handle the additional workload and complexity.
• New Regulations:  Entering a highly regulated industry or new regulations in your current industry may require additional legal expertise to ensure compliance .
• New Company Initiatives:  Major strategic initiatives, such as new products/services, international expansion, or IP development, may require specialized legal skills.
• Workload Increasing:  If the existing team is consistently working at capacity and unable to take on new work in a timely manner, expanding may be prudent.
• Insourcing:  Bringing more work in-house instead of using expensive external law firms may warrant additional headcount.
• Cost Savings:  In some cases hiring more in-house lawyers can reduce overall legal spend versus using outside counsel.
• Response Time:  If legal issues are not being addressed quickly enough, more lawyers may improve responsiveness.
• Risk Management:  Higher business risk may necessitate more legal oversight and support.

The decision should be data-driven , with workload metrics , KPIs , budgets, and business goals informing when to expand legal department headcount. The focus should be on adding value and capabilities to the business. These legal metrics can be tracked automatically with software like Streamline AI . Here are some helpful metrics and evidence to use when advocating for additional legal department headcount:

• Workload Data:  Track legal requests and matters handled over time, by type, and by department to demonstrate increased volume. Look at legal requests trends and anticipated volume based on historical trends.
• Cost Savings:  Estimate potential cost savings from replacing outside counsel work with internal team members.
• Risk Management:  Outline areas of heightened legal/regulatory risk that require more attention.
• New Business Initiatives:  Detail upcoming projects/expansions that will require enhanced legal support.
• Response Times:  Provide examples where legal delays are impacting operations or decisions, especially when a lack of headcount can affect revenue or timely close of deals.
• Attorney Hours:  Track hours worked per lawyer to prove capacity constraints.
• Headcount Ratios:  Compare legal staff to revenue/profit, employees, or other metrics versus competitors and industry benchmarks. 
• Internal Client Feedback:  Anecdotal feedback from internal clients can illustrate the need for more legal resources.
• Talent Retention:  Attrition data can signal a need for more headcount and development opportunities. 

The strongest business case will include a mix of quantitative data like hours and budgets as well as qualitative impacts on risk, responsiveness, and business outcomes.

How do you scale an in-house legal department?

Scaling an in-house legal department effectively is more than just hiring more people. It also requires a strategic approach to legal operations , embracing legal technology, and optimizing workflow processes. As legal demands grow with the business, in-house legal teams face increasing work volumes and complexity. 

To address this, legal operations become crucial in identifying areas for efficiency gains. This involves streamlining administrative tasks, such as legal intake, request triage , and matter management , to free up legal professionals to focus on more strategic initiatives. Implementing project management methodologies and adopting best budget and vendor management practices can also significantly contribute to scaling efforts, ensuring that resources are allocated efficiently and effectively.

Adopting new legal technology and software solutions is another efficient way of scaling an in-house legal department. Advanced legal tech solutions, like legal request intake, triage, and workflow automation software, can efficiently transform legal services within an organization. For example, legal tech platforms like Streamline AI enable the automation of intake triage and custom approval routing, thereby reducing manual effort and minimizing the risk of human error. This not only accelerates the legal process but also enhances accuracy and compliance with set processes. Streamline AI also offers real-time analytics and reporting capabilities , providing insights into key legal performance metrics , workload distribution, and process bottlenecks. Such data-driven decision-making empowers legal departments to optimize workflows and improve service delivery continuously at scale.

Furthermore, scaling an in-house legal department extends beyond merely increasing headcount; it involves enhancing the department’s capability to handle a larger volume and variety of legal work more efficiently. This can be achieved through training and development, promoting a culture of continuous improvement, and fostering collaboration within the team and across the organization. Integrating legal technology, like Streamline AI , with existing systems and tools ensures seamless operations and strengthens the legal department’s role as a strategic business partner. By focusing on legal operations, leveraging legal technology, and cultivating a skilled and adaptable team, in-house legal departments can scale effectively to meet the evolving needs of their organizations.

Structuring an in-house legal department for efficiency and growth is a strategic endeavor that requires a careful analysis of the organization’s needs, a clear definition of roles, and the adoption of enabling technologies. By doing so, organizations can transform their legal departments from traditional support roles into dynamic growth and strategic innovation engines.

The ultimate guide to in-house legal matter management software

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Work smarter.

Scale your legal team's efficiency and effectiveness with modern workflow automation tools designed for in-house legal.