In a recent webinar, legal experts discussed how financial and business knowledge and experience are as necessary for Delta model lawyers now as legal acumen
The Delta model lawyer demonstrates that success in the 21st century means that a lawyer’s legal intelligence, emotional intelligence, and business intelligence are almost equally important in order to advance into the senior ranks a legal organization.
In a recent webinar, top in-house leaders and others discussed the successful programs they’ve implemented to increase key financial and business skills and build departments where that knowledge and experience is as common as legal acumen. As panelist Marc Jenkins, CEO of Adappt.legal and former legal ops leader stated, “you have to speak the language of business in addition to bringing your intellectual horsepower to your daily performance.”
Indeed, comprehending your company’s business language means that you, as an in-house lawyer, can articulate what the company’s business goals are, how it runs, how it makes money, what the metrics are to determine success, and how all of it translates into financial performance.
To acquire a foundation in this, panelist Audrey Rubin, former vice president and COO of the Global Law & Compliance Department at Aon Corp., suggested the following:
Read management books and take courses — Learning from management books and training courses focused on building up business acumen, such as knowing how the stock market works, and understanding budgeting basics for those in non-financial roles, can be an effective way to increase your general business knowledge as a lawyer. (For cost effective training, Jenkins also suggested online learning platforms, such as Coursera and Udacity, to ground yourself in the basics.)
Review quarterly earnings calls & annual reports — In addition, if you work for a public company, listening to the quarterly earnings calls and the question-and-answer period between the CEO, CFO, and Wall Street analysts is an effective technique to learn about your employer’s business in somewhat basic terms. Another notable tactic is to read the Letter to Shareholders from the CEO in the company’s annual report as another way to gain a detailed familiarity with the business.
Reach out to cross-functional internal colleagues — After taking action on the aforementioned suggestions, all of the panelists agreed that reaching out to peers in business and financial roles is the most powerful tactic you can use. By doing so, you can gain the most current knowledge through the unique lens of the company. It’s also an effective relationship-building tactic.
When sitting down with a colleague from the business unit or financial function you support, for example, you can use these questions in the first chat:
- I’ve always wanted to know about X, can you tell me why do we do it that way? How is your success measured?
- Can you help me understand how the business measures success? What are the important metrics?
- What does this metric mean? And how does that speak to the health and the profitability of the company?
- What is return on investment versus return on that asset versus some other term that might be in the report?
By asking these questions, you are showing interest in your business colleagues and their work, and demonstrate that you care about them. “And if you continue these interactions, you will start to notice that they will start asking about what it is you do as a lawyer and how they could present things in a way that would allow you to do your job better,” Jenkins noted.
Attend business focused sessions at legal conferences — Rubin also advised attending sessions at legal conferences that teach financial acumen for lawyers, such as how to understand a balance sheet, and how to read regulatory filings like 10-Ks and 8-Ks and 10-Qs.
Using business acumen to gain an edge
Panelists also pointed out that leveraging financial acumen to improve the operations of your legal department is also an effective tool for differentiating yourself for advancement. “Doing more with less” has been an unspoken mantra for companies for more than a decade now, and the panelists suggested several ways to use this time as an opportunity:
- anticipate the need for cost-reduction measures by raising your hand to partner with (or lead) the legal ops team to identify what projects will be postponed if cost-cutting efforts and staff reduction actions are necessary;
- offer to partner with the real estate team to review office space leasing contracts to determine if there are cost-savings opportunities in the company’s real estate portfolio, which is usually one of the top three expenses for an organization;
- think about ways that your in-house team works with your outside counsel, and how your law firms be a source for data analytics. For example, which saves the company more money — having an in-house lawyer work on a real estate contract or having outside counsel do it? and
- get involved in your company’s recovery program. (As an example, panelist Ernest Tuckett, who spent 14 years as in-house counsel with two major global chemical manufacturing companies, noted a program initiated at Dupont years ago to aggressively pursue recoveries which helped return $170 million into company coffers in the first year.)
More broadly, panelists noted the importance of intellectual curiosity, bottom-line thinking, and having solutions orientation to expand your personal brand beyond being just a legal expert. “You’re in the room, and you get to speak about the whole project and not just the legal issues,” Rubin explained.
At the same time, Jenkins cautions in-house lawyers not to think that they have to “learn finance and accounting to some sort of über-level to be involved.” Too often, lawyers see themselves as perfectionists that have to gain mastery of any topic and think through all of the complexity of outcomes based on many scenarios before taking any action, he added.
In fact, it is the opposite — a commitment to learn incrementally is more effective and will pay dividends like compounded interest down the road, Jenkins said.