Mind your business
31 October 2005
One of the challenges facing business lawyers, whether in-house or in private practice, is how they can position themselves to be perceived as real business players. Mere legal advice is easily outsourced and will become an ever-cheaper commodity.
In truth, lawyers must manage a difficult balancing act faced by few others. There is a real tension between being independent officers of the court and being truly commercially-minded. Lawyers' training has emphasised the former role, which creates a mindset of searching for flaws.
In the May edition of the Harvard Business Review, leadership guru Warren Bennis compares the ineffectiveness of Master of Business Administration (MBA) programmes and business schools to that of law schools. He argues that both fail to prepare people for business roles because of their overly academic emphases.
Of course, lawyers in business carry with them the generally negative perceptions of the profession, as reflected for example in the Clementi recommendation that the profession must not be allowed to regulate itself. As lawyers know only too well, picking flaws is relatively easy. Creating solutions is more challenging.
To be perceived positively in business, lawyers are advised to enhance their commerciality - providing commercial advice is regarded as including, but going beyond, compliance and legal risk management. In the many mature markets of Europe and the US, competitive advantage consists of innovation throughout the business, new products and services and speed to market. This is most evident, for example, in the financial services market. A government's appetite for regulation drives lawyers, quite rightly, to emphasise compliance. The skill of thus advising the business while at the same time enabling innovation and speed in bringing new products to market requires aligning with the agendas of internal clients, whether they be marketing, bankers, procurement, commercial and so on.
For many this requires both a shift in attitudes and developing a business management skills set. It is the reason why, at Addleshaw Goddard, we have developed a unique business simulation programme for our own lawyers, as well as in-house counsel, with the help of eight FTSE100 heads of legal. The programme demonstrates the impact of business decisions on an organisation's bottom line. Teams are thrust into a competitive and unpredictable business environment. Lawyers put themselves in the shoes of a managing director, a finance director, a sales director, a production manager and so on, and have to trade their company competitively for four simulated years.
Lawyers who attend the day-long session (nine hours) work in teams with peers from other organisations consisting of in-house and private practice lawyers. They have to make strategic decisions, solve legal and business problems that have no clear solution and argue the business benefits of their proposed solutions. They then observe the consequences of their decisions over four years of trading with the help of expert business and in-house coaches. The team that makes the most money wins. In working with their coaches, participants explore what they need to do differently at work, how they will align themselves with business units and become champions of staying close to their clients so as to be perceived as real business partners. It is doubtful if that kind of role can ever be outsourced.
Dr Jim Hever is head of the client development centre at Addleshaw Goddard