By Carol L. O’Riordan
A current article in Corporate Counsel magazine asks the critical question: What’s your company’s legal IQ?
The article points out that these days, legal issues are often quite diffused within sizable companies, so that managers don’t always recognize them as such. In addition, corporate legal departments haven’t necessarily done a good job of making their abilities, or even their existence, known – with the result that according to a recent survey, only 31 percent of corporate middle managers who had a legal problem went to the legal department with the problem. Twenty-one percent of managers didn’t even know the company had a legal department.
The article is written by Dan Currell, an executive director at CEB, a consulting firm that conducted the survey of corporations and their legal departments that came up with these results. Currell says in the article that since decisions with legal implications are often made without lawyers’ involvement, a company needs to develop a “legal IQ.” He defines this as having three components: managers’ propensity to understand and engage in legal issues; organizational visibility allowing the legal function to find relevant issues; and mechanisms that make it easy for clients to resolve them.
Now, as Currell says, who better to develop a company’s legal IQ than its legal department?
Currell makes three suggestions that, in our view, will work well for companies and legal departments of all sizes: Establish a “line of sight” — a way of knowing where new issues are emerging and which clients are struggling with those issues; make it easy for clients to find and take action on legal advice; and teach clients enough about the law for them to identify and, within limits, manage their legal issues with confidence.
This is an excellent approach. It applies nicely to smaller corporations as well as Fortune 500 firms. Outside counsel and inside counsel should work to empower managers to make good decisions on legal issues when they can, and to turn to counsel for legal advice when that is needed.