In-House Tip: Navigating Internal Power Dynamics as an In-House Lawyer

Are internal power dynamics limiting the effectiveness of your in-house team?

Organisational power dynamics are a real thing and can often leave the legal team too far down the totem pole. It all comes back to the perception of value that legal brings - and here are some of the challenges the legal function may face: 

◼️Internal power dynamics: Business units may pressure legal to prioritize commercial interests, undervaluing legal input. Some businesses have a bias towards "new" business over "good" business. 

◼️Cost Centre Perception: In-house lawyers are seen as a permanent "cost centre" expense - salary costs alone may trigger a negative bias towards the legal team. 

◼️Limited expertise: A single lawyer may struggle to cover all legal needs, leading to gaps and that can diminish their value perception. 

◼️Lack of independence: Legal advice can be compromised by internal politics or reporting structures. Like any context - the legal team faces pressure to deliver the outcomes demanded of the most empowered internal client. 

◼️Capacity constraints: Overwhelming workloads limit strategic contributions - which in turn dilutes overall value perception.

◼️Fear of retaliation: Providing unpopular but necessary advice can risk relationships and career growth. This does not apply universally - but it does apply to many organisations. 

◼️Conflicting priorities: Legal can be sidelined when business goals dominate. Take a look at your reporting structure and if legal is not reporting straight into the CEO - then this issue is at play whether you choose to recognise it or not.

◼️Resource competition: Legal often competes for resources with revenue-generating departments. The pursuit for "new business" often prevails over the value legal brings to protecting the business from "bad business". 

Not recognising and failing to address the implications of internal power dynamics can have very real consequences for the effectiveness of your legal team. Those consequences include: 

◼️Reduced legal influence in critical decisions.

◼️Increased legal and compliance risks.

◼️Higher turnover due to job dissatisfaction.

◼️Missed opportunities for proactive legal risk management.

◼️Inability to attract much needed internal resources
 

Strategies to Overcome These Challenges:

Here are a few ideas on how you can face the all too often prevailing headwinds of internal power dynamics that may be at play inside of your organisation. 

◼️Build strong relationships: Foster trust through consistent engagement with key stakeholders. That starts by "stop emailing" and "start talking" directly to your colleagues and clients.

◼️Educate on legal value: Regularly showcase how legal adds value, mitigates risk, and supports growth.

◼️Establish clear boundaries: Set firm legal standards while balancing business needs. You should deploy a legal services charter so people know what legal do. 

◼️Secure executive sponsorship: Gain top-level support to reinforce legal’s strategic role. Demand Board level air time. 

◼️Be proactive, not reactive: Integrate legal early in business processes. This is easy to do if you are talking to your clients all the time. 

◼️Communicate clearly: Offer concise, business-aligned legal advice.

◼️Use data and metrics: Quantify legal’s contributions with clear metrics. We have written extensively on the need for Legal KPIs. If you do not track; then you are falling back. 

◼️Promote independence: Advocate for direct reporting to the board or senior leadership.

◼️Offer solutions, not just risks: Provide actionable solutions alongside legal concerns.

◼️Stay visible and accessible: Participate actively in cross-functional initiatives.
 

Conclusion

Ignoring these strategies can result in diminished legal authority, increased business risks, and a less fulfilling in-house career.

Remember: The most effective in-house lawyers are those who not only master legal intricacies but also navigate internal dynamics with strategic finesse.