1. Choosing Strategies in Changing Companies
Legal & Corporate Governance
May, 2012
Dr. Igor Máté
https://hu.linkedin.com/in/igormate

2. TABLE OF CONTENTS
A. Starting point: „Uncertainty is becoming the norm.”
B. Legal & Corporate Governance is a strategic partner
B.1 Aligning legal and governance function to Corporate business
B.1.1 Organizational structure
B.1.2 Client services
B.1.3 Departmental culture
B.1.4 Competencies
B.1.5 Management
B.1.6 Systems, processes, technologies
B.2 Deployment of human resources
B.3 Management of priorities
B.4 Communication
B.5 Focus on best practice
C. SWOT analysis of Legal & Corporate Governance
D. Possible structure of Legal & Corporate Governance

3. A. „Uncertainty is becoming the norm.”*
Hungarian CEOs’rank of importance of business factors that might make
company change its strategy**
 Changing legal and regulatory environment 63%
 GDP forecasts and uncertainty 53%
 Government debt leads restrictions and/or tax raising 41%
 Consumer demands 38%
 Crisis of the industry 38%
 Capital structure/loss 25%
 Competition 16%
 Change in risk tolerance 13%
 Shareholders’ expectations 13%
* John Baldoni in Harvard Business Review
** PWC Hungary CEO Survey

4. B. L & CG IS A STRATEGIC PARTNER
Output of Legal & Corporate Governance, as a strategic support function, is
based on five solid pillars:
1 alignment to business
2 deployment of human resources
3 management of initiatives (priorities)
4 strategic communication
5 focus on best practice

5. B.1 ALIGNING L & CG TO BUSINESS
L & CG shall be properly aligned with the strategic needs of the business
units it serves, and of course, with the company as a whole
 Key alignment factors
 organizational structure
 client service
 departmental culture
 lawyers’ competencies
 management
 systems, processes, technology

6. B.1.1 ORGANIZATIONAL STRUCTURE
Organization shall ensure the consistency of legal and governance position,
and that various business units are speaking with one legal/governance
voice.
 Key alignment factors… … to best practice
 reporting relationships centralized
 geographic locations dispersed
 authority and responsibility clear lines
 control reasonable span
 organized around work
● strategic ● by businesses
● important ● general
● repetitive

7. B.1.2 CLIENT SERVICES
The KEY performance indicator for a Legal & Corporate Governance
function is its clients’ satisfaction.
 Key alignment factors
 keeping up with clients changing needs
 listen to your clients
 be expert in clients’ business
 above all, be flexible
 boosting communication with clients
 articulating and demonstrating the value delivered to clients

8. B.1.3 DEPARTMENTAL CULTURE
Cultural and behavioral competencies are equally important to deliver
successfully.
 Key alignment factors
 reflecting and contributing to overarching company values
 strong leadership that sets a clear direction
 communication and sharing information
 culture of teamwork
 integrity
 accountability
 responsibility

9. B.1.4 COMPETENCIES
Lawyers’ functional/technical legal knowledge and skills are taken as given,
in-house they must then be supplemented by non-legal competencies
Personal Attributes Leadership and Development Competencies
result oriented leadership
efficient impact and influence
committed innovation
forward thinker teamwork
creative thinker developing people
communicator commitment to learning
relationship builder Business and Client Competencies
service oriented customer-focused
confident achievement-oriented
adaptable resourceful
objective strategic business sense

10. B.1.5 MANAGEMENT
Proper L & CG Unit management
 requires
 high level understanding of corporate business and, moreover,
 participative - inclusive approach re business goals
 supposes
 utilization of full benefit of the talent and resources of colleagues
 strong leadership
 aims
 designed, facilitated and coordinated legal support for clients (i.e. management and
fellow departments)
 ensures
 (via a collaborative process with Business) both viable commercial legal solutions and
legal compliance (while providing clear assessment of risks)

11. B.1.6 SYSTEMS, PROCESSES, TECHNOLOGY
Shall support the proper unit management, workflow, co-operation with
business units, delegation, reporting, supervision and performance control.
 Law firm system
 flattens the structure
 prefers teamwork
 teams consist of paralegals, junior lawyers, senior lawyers
 senior lawyers report to „partner”, i.e. legal director
 Workflow & resource management (time sheet)

12. B.2 HUMAN RESOURCES DEPLOYMENT
10 principles of deployment of workforce
1. Clients know which law department member to contact
Lack of clarity and communication may often make difficult for clients to know which lawyer to
call. Also often occurs when clients go „shopping” in the law department for legal answers they
like.
2. Capability of easily realigning the resources
As the needs and demands of the Company for legal services change, workforce shall be
realigned.
3. There is no redundancy of personnel, effort and resources
If law department is organized around business units, silos can develop that often may lead to
retain entire legal resources from the overall Company needs.
4. Resources are efficiently shared by clients (business units)
Lawyers serve the Company. Legal skills, abilities and experiences shall be shared across business
lines as necessary.
>>

13. B.2 HUMAN RESOURCES DEPLOYMENT (2)
< 10 principles deployment of workforce
5. The Company effectively leverages its purchasing power
Purchasing power cannot be maximized if each business units, or even within the law department
each sections or lawyers is retaining outside legal advisor in an uncoordinated manner. Therefore
selection and retention of externals shall be centralized, consolidated and managed.
6. High value strategic work is performed in-house
Law work can be categorized as strategic, important and repetitive. Due to the nature of work and
subject to cost management, strategic ones shall be performed in-house, repetitive ones may be
outsourced, while the important ones can be delivered both way. In each case management and
control must be held internally.
7. There is no internal competition within the department
Lawyers shall not compete with one another. Structure, workflow and responsibilities shall be
tailored and managed that job be placed in the „right hands”, based on legal specialty, skills,
experiences and seniority.
>

14. B.2 HUMAN RESOURCES DEPLOYMENT (3)
<< 10 principles deployment of workforce
8. Teamwork, communication (and reporting) is facilitated
Likewise in business units, also along the above qualities teams shall be formulated at Legal
Department. Communication and reporting within the team and thereof the team leader towards
the department head shall be facilitated.
9. There is consistency in legal position
Respectively the facilitated teamwork, legal position communicated towards client business units
is consistent, there is only one
10. Obsolete, or new capabilities are eliminated or added
If the Company’s needs change, legal needs may change. Accordingly, resources shall be
redeployed efficiently.

15. B.3 MANAGEMENT OF PRIORITIES
As the needs and demands for legal services change permanently, Legal &
Corporate Governance Unit shall be managed ready for realignment its
resources from time to time.
Organizational structure, workflow, roles and responsibilities, teamwork
and reporting lines shall be tailored to be able to smoothly rearrange the
troops any time.

16. B.4 STRATEGIC COMMUNICATION
Well established, real time, clear, direct (all level), collaborative
communication between Business and Legal & Governance is inevitable in
order to ensure that lawyers be able to
 understand corporate business objectives
 recognize subject matters of legal support
 identify risks and threats
 determine and develop ways and tools of „legalization” of business decisions
 let room for and culture of also saying „no”

17. B.5 FOCUS ON BEST PRACTICE
In a rapidly changing, even hectic, legal and regulatory environment it
is a must to
 monitor constantly homeland and international industry best practice
 implement experiences gained
 liaise with and participate in the activity of associations
 develop and manage public affairs activity of the MKB in the fields of legal and
corporate governance

18. C. SWOT ANALYSIS OF L & CG FUNCTION
STRENGHTS WEAKNESSES
talent and expertise resourcefulness
experience creativity
enthusiasm business sense
contributive to Company values communication
integrity share of resources
accountability facilitation
committed delegation
teamwork certainty re roles
service oriented performance management
focused flexibility
delivers value management of externals
>

19. C. SWOT ANALYSIS (2)
< OPTIONS THREATS
new corporate management corporate downsizing
new corporate strategy cost control program
need and room for realignment organizational flattering
need for strong risk awareness outsourcing
need for talent and experience recession
rewrite roles and responsibilities less loyalty from the company
reshape workflow and reporting low turnover
bolstering communication
reinforce management
build up new partnerships

20. D. POSSIBLE L & CG FUNCTION TRUCTURE
LEGAL AND CORPORATE GOVERNANCE
(GENERAL COUNSEL AND CHIEF GOVERNANCE OFFICER)
Business Legal Department
(Legal Director)
Compliance Department
(Compliance Director)
Company Secretariat
(Company Secretary)