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Optimizing Your Legal Department

HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department ahould function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and reeponsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Managoment typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and emplayee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases LACK OF Rol effectiveness while VISIBILITY reducing costs. CONFUSION RISK ASSESSMENT h COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Risk assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the need for laborious and error-prone manual COMPLEXITY REDUNDANCY POLICY MANAGEMENT processes Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can alao lead to negative consequences including: increased costs, lack of visibility. A robust and common model to store structured data and unstructured documents: REPORTING AND FILING It is critical that all regulatory reporting is effactively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. affords a single system of record; allows management to analyze data more easily: and improves the way information is secured and produced if required. Manage time, expensee and performance Manage ongoing and historical work product eo thet il can be leveraged more than onoe. Better insight enables $ optimized allocation of capital to the right risks. Menage billing and invoioes, confusion and othera. REGULATORY AISK Managing legel aspecte of myriad laws, rules and regulatione euch as: LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing rieks associaled with ongoing, imminent and potential liligation. Vetling contracte and monitoring compliance wilh contract requirements and provisions. Managing risks aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) risks such as copyright, trademark and patent intringement as well as general leakage of confidentlial information. A high-performing legal department INDUSTRY-SPECIFIC RISKS CORPORATE FILINGS Risks associeted with Bing information with reguletore /government agencies. COMMON REGULATORY RISKS ENTITY MANAGEMENT can apply an optimized model to the full range of legal risk areas. Risks that apply lo all organizations, such as lebor law, information privacy, anti-corruplion, eto. Risks that are specilic lo industries, such as banking, phammaceulicals, energy and uities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 2 DEFINED 3 DOCUMENTED MEASURED & ALIGNED 5 OPTIMIZED Depariments at this level rely on individual heroios and ad hoo processes to get things done. • Legal department stands alone and apart from the bueines Departments at this level begin lo define processes, but the proceoses are not instilutionalized or documented. • Processes are delined, but undocumenled, and knowledge about processos are still "locked" within individuals Departments at this level leverage a best-in-class model and set of metrios lo continuously improve the legal department year over year. • Legal department is strategioally leveraged to deliver Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the business and begin to measure their performance and analyze trende to gain valuable insight. • Legal department is aligned with some businees areas, but not aligned with others • Legal departrnent is tully aligned with the business · Technology is used more eystemically lo not only mulomate processes but lo also provide insights • Informetiorn about mattors and processes, as well as performance, la readily avnilable business benefite • Ad hoc approach to addressing matters • LAtle, If any, technology in place • Informalion is not available, kot alone shared • New requirements are not easily addressed Processes are insltutionalized and no longer dependent on individuals Technology is used to automale common prooesses • Measurement is now postible because processes are consistent and standardized • Technology is used on a case-by-case basis • Information is recorded, but not readily available or used for analysis • Technology integrated with other core business ayetems • Legal risk insights are integrated wilh businees insights to deliver busineon resulte • Performance is measured • Businees benelits are measured and improved year • Lack of standardizalion makes measurement difficult • Sucoess is not measured over year G2007-2011 OCEG contact Scolt L Mitchel serilohell@aceg.org for oomensats, reprints or licensing raqueste HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests HOW DO I OPTIMIZE MY LEGAL DEPARTMENT? DEVELOPED BY OceG MITRATECH There are many departments and functions that comprise the governance, risk management and compliance (GRC) capability. The legal department and related functions is one of the most critical components. Optimizing the legal department is an important step toward an integrated GRC capability. FUTURE STATE MATTER MANAGEMENT The legal department should function at a higher level of maturity and, ideally. be optimized to deliver effective, efficient and responsive service to the organization. Matter Management is the hub around which all other legal activities are coordinated. At its core, Matter Management typically includes project management, workflows, resouroe and cost tracking. ISSUE IDENTIFICATION Issues may be identified via several channels including periodic audits and employee hotline/helplines. Issues should be substantiated before significant resources are allocated for investigation and resolution. BENEFITS OF OPTIMIZING YOUR LEGAL DEPARTMENT INVESTIGATIONS Once an issue is identified and substantiated, the matter must be investigated using a rigorous and consistent process. Leveraging a common system increases effectiveness while reducing costs. LACK OF Rol VISIBILITY CONFUSION RISK ASSESSMENT COSTS Risk Assessment, in particular legal risk assessment, helps management understand the legal and regulatory risks that may impact the business. Rick assessment also helps the legal department focus resources on priority issues. INFORMATIONAL SILOS Automation reduces the A need for laborious and error-prone manual processes. COMPLEXITY REDUNDANCY POLICY MANAGEMENT Policies that govern corporate conduct must be drafted and distributed, with confirmation that employees received and read the policy. Information consistency makes it possible to O examine trends. OUTSIDE COUNSEL CURRENT STATE Using and managing outside counsel is an important part of the legal department strategy. It is critical to implement systems to not only manage time and expenses, but also the work product. DOCUMENT & INFO MANAGEMENT Some legal departments function at a lower level of maturity and rely on individual "heroics" to get the job done. While this approach may work in the short term, it can also lead to negative consequences including: increased coats, lack of visibility. A robust and common model to store structured data and unstructured documents: affords a single system of record; allows management to analyze data more easily. and improves the way information is secured and producad if required. REPORTING AND FILING Better insight enables $ It is critical that all regulatory reporting is effectively managed. As well, management and the board should be adequately informed regarding legal risks and the systems in place to address these risks. $ optimized allocation Manage time, expenees and performance. Manage billing and Manage ongoing and historical work product so thet it can be leveraged more than onoe. of capital to the right risks. confusion and others. invoioes. REGULATORY RISK LITIGATION RISK CONTRACT RISK TRANSACTION RISK IP RISK ILLUSTRATIVE LEGAL RISK AREAS Managing legel aspecte of myried laws, rules and regulations such as: Managing rieks aosocialed with ongoing, imminent and potential liligation, Vettling contracts end monitoring compliance with contract requirements and provisions. Managing riske aseociated with mergers and acquisitions including legal risks of the acquired organization. Managing intellectual property (IP) riske euch as copyright, trademark and patent intringement as well as general leakage of confidentlial informalion. A high-performing legal department can apply an optimized model to the full range of legal risk areas. CORPORATE FILINGS Risks associeted with ling information with regulelors /government agencies. COMMON REGULATORY RISKS INDUSTRY-SPECIFIC RISKS ENTITY MANAGEMENT Risks that apply lo all organizalions, such as labor law, information privacy, anti-coruplion, etc. Risks that are specilic to industries, such as banking, phammaceulicals, energy and udities, and others. Risks associated with keeping the entity in good etanding with agencies 1 AD HOC 3 DOCUMENTED 4 MEASURED & ALIGNED 5 OPTIMIZED Departments at this level leverage a best-in-clase model and set of metrios lo continuously improve the legal department year over year. 2 DEFINED Departments at this level rely on individual heroios and ad hoc processes to get things done. • Legal depariment stands alone and apart from the bueines Depertments at this kevel begin to deline processes, but the procecses are not instilutionalized or documented. Departments at this level have fully delined and documented processes, and technology is used lo enforce standards, Departments at this level are aligned with the busihess and begin to measure their performance and analyze trendes to gain valuable insight. • Legal department is aligned wilth some businees areas, but not aligned with others • Processes are inslitutionalized and no longer dependent on individuals Technology is used to automale common prooesses Processes are defined, but undocumenled, and • Legal department is strategically leveraged to deliver • Legal department is fully aligned wilh the business • Technology is used more eystemically to not only sulomate processes but lo also provide insights Informelion about matters and processes, as well knowledge about processes are still Tocked" within individuale business benelits • Ad hoc approach to addressing mattlers • LAtle, if any, technology in place • Informalion is not available, lot alone shared • New requirements are not easily addressed • Sucoess is not measured • Technology is used on a case-by-case basis • Informalion is recorded, but not readily available or used for analysis • Lack of standardizalion makes measurement difficult • Technology integrated with olher core business systems • Legal risk insights are integrated wilh business insights lo deliver businees results • as performance, le readily available • Measurement is now poseible becauee • Performance is measured • Business benelits are measured and improved year processes are consistent and standardized over year 2007-2011 OCEG contact Scolt L Mitchel smilchell@oceg.org for oomments, reprints or licensing requests

Optimizing Your Legal Department

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There are many departments and functions that comprise the governance, risk management, and compliance capabilities. The legal department and functions is one of the most critical components. Optimizi...

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