In my last book, Showing the Value of the Legal Department: More Than Just a Cost Center, I tackle one of the fundamental issues facing all in-house legal departments: it sucks to be a cost center.  You can check if you want, but I am pretty sure that’s what I said.[1]  Why does this matter? Because cost centers are places the business looks to cut when times get tough, or the numbers need “improving.”  And, historically, most legal departments have had a ”cut my budget” sign taped to their backs.  This is due partly to those evil bastards in finance, and in part because most in-house legal departments have not aggressively marketed themselves to the business.  It’s probably more the latter, but who’s keeping score?[2]  By aggressively market, I mean taking the steps necessary every day to show the value provided by the legal team, and, more importantly, showing how the department can create even more value if properly nurtured.  If you have been a long-time reader of the blog, you know that I have written about how to go about showing value and how to market the department.  Now I want to take on yet another task in-house lawyers often suck at (my early self included), i.e., how to ask for more resources (and not get laughed out of the room).[3]

I’ll lead off with it is not easy, but it can be done if you prepare the ground in advance of the ask.  And now that most in-house legal departments are heading into “budget season.” It’s the perfect time to rip the “cut my budget” sign off your back and replace it with a “we deserve more budget” sign – or button.  That’s right, this edition of “Ten Things” takes you through the process of how to ask for more resources and – on occasion – get them:

1.  It’s all interrelated.  Many in-house lawyers think that the budget process is somehow a standalone adventure that occurs once a year and whether or not you succeed at getting more budget (or staying flat) or taking a haircut depends on the circumstances at that particular point in time.  And they would be wrong.  Sure, how things are going in the company generally at that point in time matters, but not as much as the members of the legal department understanding that the “ask” for more is something you should have started years ago – they just may not know it.  Here’s what I mean: the value of something lies largely in the eye of the beholder.  If you have spent time working on both the quantitative measure of value (numbers) and the qualitative measure (perception), then you realize that the value of the legal department (and the willingness of the business to pour more into it) is something you have been building over time (and not just on October 31, 2023).  This means that the various components of “value” are all interrelated, i.e., there is a virtuous cycle created when the in-house legal team focuses some of its energy on marketing to the business, on becoming the “Department of Yes,” on thinking and acting strategically, being practical, and finding ways to partner with (and not dictate to) various parts of the business.  If done consistently, this cycle culminates in two things: a) over time, the legal department has built a reputation and veneer of value that becomes second nature in the minds of the business leaders.  The value of the legal department becomes a given; and b) the business is hungry for more, i.e., clearly seeing the value generated by the in-house lawyers they want to invest more in this resource because the payoff (ROI) is evident through enhanced value creation and minimized value destruction.  If the business is primed to give more, then all you have to do is ask.  But, you need to ask smartly.

2.  It is not easy.  Sure, you may on occasion just luck into more resources, be it budget, people, or technology.  However, this is rare and, to be honest, highly unlikely.  So, if your plan is to sit back and wait for the controllers of the purse strings to say, “Damn.  Legal is wonderful.  Let’s give them more!” – you may be waiting a while (think Rip Van Winkle).  All of this means you cannot succeed in increasing your budget and resources with a spur-of-the-moment pitch (see footnote 3 for more).  It takes time and it takes planning.  You must understand that the natural inclination of the business is to say “no” to any increase in costs that do not have a positive return on investment.  Your job is to show the business how investing in the legal department leads to a positive return on each dollar spent.  It is going to take some showmanship, some math, and—most importantly—you are going to have to earn it over time. That is, by building up the reputation of the legal team in the hearts and minds of the company leadership by consistently showing the value of the legal team.  In other words, doing a lot of things you probably never planned on doing while in law school or starting your in-house legal career. Too bad. This is the way it works, and it is now time to use your lawyer superpowers for truth, justice, and plotting to get more resources.

3.  You must know when you need more.  Sounds pretty basic, I know.  But the first step here is being able to articulate “why” you need more.  I have seen too many in-house lawyers go in with “We need more guys!”[4] because they thought you were supposed to ask for “more” every year or risk losing budget.  That’s not a smart play.  First, if you cannot articulate what you need and why, finance will laugh at you (see footnote 3 – again).  Second, if you ask for something you don’t really need, you’re crying wolf, and the powers that be will start to tune you out because you are always asking for more but never able to show why.  Both are bad.  So, you need to start tracking key indicators that show how the lack of resources for the legal department is costing the company money.  Here are a few indicators to watch:

• Consistently high or increasing spend on outside counsel for work that can demonstrably be done in-house, either with the members of the current team or by adding a head to the legal team.  For example, the department’s spend on outside lawyers to help with contract overflow has greatly surpassed the cost of hiring an additional contracts lawyer.  The match is simple, and the value is clear.
• Key deals and projects not getting done because there is too much work for the legal team, and too few hands to get to it all.  The lost value of the deals not getting done or delayed is more than the cost of hiring another lawyer or implementing technology that would increase the speed of contract turn-around time.
• The legal team is consistently overworked, i.e., long nights, weekends, holidays, just to get basic legal work finished.  I know and understand there will always be times when nights, weekends, and holidays are required, even in-house.  However, if the team is consistently working at a breakneck pace week after week, they will eventually burn out and quit.  The cost of an in-house lawyer quitting is huge.  Not only is there the cost of finding the replacement, but there is also all the work that must be reassigned or put off in the interim.  This adds stress to an already stressed-out team and means more things are not getting done or falling through the cracks.  Finally, even when you find someone new, there is no magic process whereby that person suddenly is pulling their full weight.  It takes time for new lawyers (even experienced ones) to ramp up, to understand the business and the company’s legal issues, and for the business to get used to and trust the new person.  This lost time and lost work add up.  In fact, you can make a pretty good estimate of the cost of losing an attorney and show that the cost of hiring an additional head is far less than the cost of losing and replacing one who quits because of the stressful pace.
• The company expands via acquisition and dramatically increases the workload on the current legal team.  I have been part of many acquisitions and, typically, unless the target company has a legal department already, the increase in workload caused by adding the legal needs of the newly acquired company can cause slowdowns and burnout.[5]  While it may not be one-for-one in terms of scaling, there must be some consideration given to how legal work for the newly acquired asset will be handled.  It is easy if they have a lawyer or team that can be added to the team of the acquirer.  However, those people may not want to stick around (for various reasons) or they may not mesh well with the existing team.  This means that without additional resources the legal team will start to fall behind, both in supporting the existing business and the newly acquired one.
• The company enters new markets or develops new products that dramatically increase the demand (or need for) legal services from the legal department.  Simply put, you cannot enter new geographic or product markets without sufficient legal assistance.  If that assistance is not sought or not available, big problems can arise bringing forward the old, but true, adage that an ounce of prevention is worth a pound of cure.

4.  Understand the company’s strategic plans. The legal department must be aware of the company’s strategic plans and direction and be able to spot developments like the list above.  If the company is going to get big into a new foreign market, is the legal team prepared to support that and, if not, have you scoped out what is needed to do so?  Looking ahead and around corners to identify future needs is critical.  Likewise, it is important that you have developed reliable metrics that show the strain on the current level of legal resources and the impact the strain is having on the ability of the business to move forward profitably and with lower risk (or to move forward with a higher return on its investment because the new resources provide value above their cost).  This comes down to math and that is a language the business understands.  So, be armed with numbers, as well as rhetoric.

5.  What do you really need?  Once you believe you have a strong case for additional resources, there are several steps to take.  To start, analyze the situation and determine what you truly need to deal with the bigger workload or missed opportunities.  It will likely come down to these three questions:

• More people to help with the work?  Do you need to add full-time heads to the legal team?  Do you need a contract resource to deal with a temporary surge in work? Do you need a lawyer and, if so, with how much experience (less experience is less expensive).  Would a paralegal, legal assistant, or other non-lawyer employee suffice? Do you need a skill that is fairly common (commercial agreements or litigation), or do you need someone with more specialized (and therefore more expensive skills), for example, data privacy, executive compensation, or corporate secretary?
• Can you handle the increase in work by getting additional funding and then hiring outside counsel? Is this a more cost-effective way to handle the increase in work?  Can you find a solo practitioner to handle the extra work (and be on stand-by going forward once trained)?  Can you find a small boutique firm with substantially lower rates than your usual counsel?[6]
• Will additional technology solve the issue?  For example, a contract assembly tool that will allow the business to create their own contracts based on templates and an approved list of clauses that can be substituted into the standard template, e.g., choice of law options or alternative dispute mechanisms.  Or ChatGPT, a tool that can automate the mundane and free you up to do more substantive work?

In other words, it’s important that you understand and determine what you truly need to address the resources problem and not simply fall back on the standard “we need more guys” pitch.  That may be true, but if you bring forth an analysis that shows you looked at different options, the cost, and the efficacy of each option, then the option you do settle on and ask for will be the clear winner based on math—not a hunch.  And that is something the finance team will respect (see footnote 3 for more).

6.  Know when to make the ask.  Be cognizant of the company’s budget and planning cycle.  While it is possible to get additional money and resources mid-cycle, it is much easier to get more by making the ask during the yearly planning cycle.  For most companies, the budget planning season starts in the fall, around October.  This means that if you see a need or gap you need to fill, the planning must start months before that deadline as it is unlikely that you will be able to properly make the case if you start the necessary work on the day the budget process starts.  Likewise, if the company is engaged in an acquisition, the time to make the pitch for additional resources to deal with the anticipated increase in legal work is during the acquisition planning phase, that is, when the company is crunching the numbers of whether the acquisition makes sense financially. This is when you raise your hand.  Not six months after the deal has closed.

7.  Make a friend in finance.  Okay, sorry about the “evil bastards” crack in the introduction.  That’s wrong. Most of the folks in finance are not evil…  Joking aside,[7] the place to start to build your case is with the finance team.  Hopefully, you have made some friends in the finance department and have been a good partner by including them in your budget discussions, reviews of outside counsel spend, and getting them accurate forecasts and accruals on time and without complaining.  If you have done these things, then the odds are good that you will get a fair hearing from them about your budget needs (even if you are making the request outside of the budget planning window).  Start by previewing your needs with your contact in finance.  Set a meeting with her to discuss budget planning items and needs well in advance of the start of the yearly budget cycle (when she will likely be inundated with work and much less likely to listen closely).  This way she knows what is coming and will not be caught off guard. Then, show up to the meeting with your thoughts and plans fully baked, not thrown together at the last minute – or worse showing up and just winging it on a whiteboard (yes – see footnote 3 for more).  Finally, be realistic with your ask.  If the company is losing money like mad, you probably need to defer the conversation or note that you understand it is not possible at the moment given the financial circumstances, but when things turn around you would like this to be put on the list for consideration.  Always put yourself in their shoes when developing your ask and realize that you are almost certainly not the only department asking for more.  Have some empathy and understanding.  Do not make it personal or predict doom and gloom for the company if your request is not granted, i.e., no threats.  Your job is to educate and persuade the decision-maker (s) with facts and a good bit of charm.  Use the goodwill you have built up from being a good partner.

8.  Let others do the work for you. An effective tool to get additional resources is to let others make the pitch for you.[8]  As general counsel, I never minded if business leaders would reach out to me to complain that the legal team was taking too much time to get deals done or turn projects.  First, they were usually wrong in terms of the facts (which I—politely—would correct them on).  Second, and more importantly, I would almost always say, “Don’t tell me.  Tell the CFO/CEO that ‘we need more lawyers.  Things are not getting done and we’re losing out on revenue deals!’”  A statement like that from the head of sales, for example, is ten times more powerful than the general counsel saying exactly the same thing.  Why?  Because, of course, the general counsel is always going to ask for more heads.  That is expected.  What is not expected, and therefore more powerful, is someone from the business side demanding more lawyers.[9]  Similarly, if you are considering adding any type of technology to the legal department, try to determine if any other groups (staff or business) could find value in using the technology.  If so, they can help make the pitch and, potentially, share some of the cost.  This is a win across multiple channels, including demonstrating leadership in addition to partnership.

9.  Math matters.  As you work on your pitch for resources, do not forget to show your math.  This goes back to another of my core beliefs: to show value you must speak the language of the business and that language is numbers.  You cannot walk into the CFO’s or CEO’s office and say, “I need some more people/technology/recourses,” without having the numbers to back up the ROI. Show how much better off the company will be financially if the legal department gets the extra resources.  The two cleanest examples are a) how much money can the company save if the legal department gets the resource (e.g., savings on outside counsel spend), or b) how much more money can the company make if the legal department gets the resource (more deals).  While it is usually one or the other, sometimes you make the case for both (a) and (b) for the same resource.  That is called a home run (or a “six” if you prefer cricket).

When you do the math, be sure to account for all the costs.  For example, for a new employee, the cost is not just salary, but also benefits, taxes, office supplies, bar licenses, and so forth.  You want to calculate the fully loaded cost of the head.  Likewise, for technology, it is not just the cost of the software, but also yearly subscription fees, support costs, fees for things not part of the plan, etc.  On the other hand, you probably have far more freedom to develop numbers showing the savings or the increase in revenue you can attribute to the new resource.  That said, stay within the confines of reality and come up with good-faith estimates whenever you present such numbers.  Be relatively conservative and, importantly, be able to defend the numbers should they come under scrutiny.[10]

10.  Defend what you have. Sometimes your conversations are not about asking for more resources, they are about defending what you have, that is, preventing cuts to the legal department budget.  Hopefully, you have a strong relationship with the finance team, and you have been a good steward of the funds you have managed to date, i.e., staying within budget, providing accurate accruals and forecasts, keeping finance in the loop on what legal is spending money on and why, and so forth.  All these things underscore your credibility when you first get a whiff that your legal budget may be coming under the knife.  Granted, there are times when there is nothing you can do, and you must take one for the team because of optics or because of stubbornness on the part of the decision-makers.  If this happens, make your case, but do not fall on your sword.  If the budget cuts are coming no matter what, the thing to do is draw up a list of all the valuable things the legal department does and ask company leadership to help decide what will not be done or get done post-budget cuts, i.e., you cannot do it all so choices have to be made.  Sometimes, but usually not, this gets the business to reconsider the cuts because they see how foolish they are.  Otherwise, get agreement on what the legal department will not do or will do less of and confirm it in writing— a document you can share with those same business leaders when they complain about things getting missed, not getting done, or significantly delayed.

11.  No crying.  Yep, this post goes to 11, a bonus “thing” for you to savor!  I’ll end with this, understand that you will not be the first or last legal department to play “Oliver” and ask for more only to get turned down (and hit with a spoon).  This is okay – except the spoon part.  Be patient, be a good corporate citizen (i.e., do the best you can with what you do have), and continue to work on building the case for more.  You may not get what you want this year, but the odds are good that you will have laid down a powerful marker for future years, and at some point, the seeds you plant now will bloom.  So, cast the seeds about, fertilize them when you can, and plan on someday reaping the harvest.

*****

It may seem like wishful thinking, but you do not need to be satisfied with the resources you currently have at your disposal.  This does not mean that just because you ask, you will be rewarded.  However, you must make the case  – and do it properly – to find out.  Keep showing value and keep the following top of mind:

• Constantly evaluate the legal needs of the company—both current and future.  When you see gaps and needs, bring them forward to the business at the appropriate time.  Never be shy about making the case for more if the circumstances truly warrant such a request.
• Build a partnership with the finance team.  If you win them over, you have overcome one of the biggest hurdles to increasing the department’s resources.
• Understand the company’s planning and budget cycle timing.  When the time is right, make your request.
• Be realistic and thoughtful with your ask.

Finally, do not be discouraged if you are told no.  You should expect a lot of “no’s” before you get a yes.  Keep trying, keep making the case, and keep being positive about the company and the legal department regardless of the level of resources you have available.

Sterling Miller

October 31, 2023

I am still cranking away on book number six on productivity (don’t believe any ABA snarky comments to the contrary – and yes, I actually am writing when I close my eyes and snore… just a special skill I have).   My fifth book, Showing the Value of the Legal Department: More Than Just a Cost Center is available right now, including as an eBook!  As the ABA says, “Sterling needs more guys!” Buy more books and help get me some more guys to write this new book.  You can buy it 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 also on sale on 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 twisted 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 sterling.miller@sbcglobal.net or at smiller@hilgersgraben.com

[1] And if you need to buy a copy of the book in order to check, that’s okay too.  I have two daughters.  So, help a guy out and buy a book – or two.  It’s a tax deduction!  And the ABA needs the money.

[2] If you are keeping score, it’s probably Finance Goons 59, Legal Department Budget 3.

[3] Seriously, the first time I tried this the folks in finance were laughing their assess off.  Not the reaction I expected, but looking back, certainly the reaction I deserved.  Fortunately, I got better at it.  But, my first attempt is memorialized in the Oscar-winning short subject film, “Sterling Really Sucked at That.”

[4] That’s “guys” in the non-gender sense.

[5] And whenever you find the company involved in an acquisition, be sure to get in the ear of the finance team about whether the legal department, as it sits now, can handle the increase in work.  Many times, the finance department assumes this to be the case.  You need to be proactive in terms of analyzing the legal needs of the acquired company and setting out what resources are needed to handle it effectively.

[6] This is the perfect analysis for a legal operations team to prepare.

[7] Yes, finance buddies and MBAs of America, I am joking.  We love you and you provide a valuable service to the economy and the country.

[8] Tom Sawyer perfected this technique with the great fence whitewashing scheme in The Adventures of Tom Sawyer.

[9] This has actually worked for me, so I am speaking from experience and not a hypothetical wonderland.

[10] The business understands assumptions (e.g., pro forma numbers) so long as they feel there is a solid basis for each assumption and things add up.  If you have the math on your side, you are well on your way to justifying the additional resources.