The DNA Diag­nos­tic — the Gen­er­al Coun­sel Secret Weapon?

It’s very easy, as an over­worked GC, to get swept up in the trans­ac­tion­al, day-to-day ele­ments of the job. For too long in-house legal has been seen as a tac­ti­cal, ser­vice-deliv­ery func­tion… less part of the busi­ness team, more a machine to deliv­er legal ser­vices and keep an eye on risk; pro­duc­ing doc­u­ments, process­es and play­books to be used for or by the busi­ness, with lit­tle or no involve­ment on how they could deliv­er true, mean­ing­ful strate­gic value. 

But times are changing. 

The very best GCs are tak­ing a strate­gic medi­um and long-term approach, putting in place robust plans that move legal teams from being about only ​‘ser­vice pro­vi­sion’ to demon­strate the many ways in which legal can play a fun­da­men­tal role in busi­ness suc­cess, organ­i­sa­tion­al growth and cul­tur­al devel­op­ment, as well as dri­ving wider soci­etal and envi­ron­men­tal impact. In plain Eng­lish, this means plac­ing ESG at the top of the agen­da, and demand­ing mea­sur­able com­mit­ment to ESG from their own busi­ness­es as well as from pan­el firms.

But wait a moment. Can GCs real­ly have an impact at this lev­el? On areas of the busi­ness that don’t have an obvi­ous need for imme­di­ate legal support? 

We’ve pre­vi­ous­ly talked about the ways lawyers need to under­stand the true suc­cess of an organ­i­sa­tion as well as its strate­gic needs, if they are to have a strate­gic impact. And we have long-argued that to under­stand the true suc­cess of an organ­i­sa­tion you can­not ignore the peo­ple — the human sys­tems fun­da­men­tal to long-term busi­ness and soci­etal value.

In our recent arti­cle How to build a human-pow­ered law firm we tack­led the thorny issue of how peo­ple screw up law firms. The things that cre­ate the most val­ue, risk and harm — all con­cepts that lawyers base their life’s work around — are human beings. 

We believe that law firms should become places that enhance well-being for all legit­i­mate stake­hold­ers as well as cre­ate pos­i­tive exter­nal­i­ties to the envi­ron­ment and soci­ety. We believe a law firm or legal ser­vices provider can both max­imise prof­its and deliv­er val­ue to its stake­hold­ers by estab­lish­ing a mature insti­tu­tion. And we think GCs are best-placed to pro­mote this, using the legal pan­el review process to assess over­all matu­ri­ty, as well as to require cer­tain stan­dards in terms of D&I, well­be­ing and ESG, as part of the process. This means mov­ing on from sim­ply requir­ing them to pro­vide self-report­ed stats demon­strat­ing min­i­mum stan­dards, but rather inde­pen­dent­ly mea­sur­ing the lived expe­ri­ence of the firm’s cul­ture and devel­op­ing mature, val­ue-based relationships. 

Any per­for­mance-mea­sure­ment must look beyond the quan­ti­ta­tive report­ing to con­sid­er both its finan­cial and human val­ue if it is to ade­quate­ly take this into account. And if we can’t cap­ture, mea­sure and com­mu­ni­cate this in a way peo­ple under­stand, and that is quan­tifi­able — com­pared to oth­er organ­i­sa­tions, to share good, bad and indif­fer­ent prac­tice — we’re miss­ing a key ele­ment of organ­i­sa­tion­al val­ue and maturity. 

The DNA Diag­nos­tic has been based around the OMIN­DEX®, a method­ol­o­gy that has been test­ed across acad­e­mia, invest­ment pro­fes­sion­als and cor­po­rates over sev­en years. It’s a full health check that cap­tures and mea­sures all val­ue and risk ele­ments aris­ing from human stake­holders. It looks at 32 key fac­tors to diag­nose the human health of an organ­i­sa­tion. Indi­ca­tors of this include pur­pose, val­ues, prin­ci­ples, cul­ture, deci­sion-mak­ing, engage­ment, trust, diver­si­ty and inclu­sion, well­being, reten­tion, inno­va­tion, burnout and more. In short, it is a com­pre­hen­sive study of the true health of your organ­i­sa­tion, from the per­spec­tive of how peo­ple gen­er­ate (or remove) value. 

It is through this approach that GCs can gain the insight required to not only ful­ly under­stand the val­ue their pan­el firms offer (beyond just work­loads and bill­able hours) but also how mature they are as an organ­i­sa­tion, in terms of wide-reach­ing ESG and ethos.

Let’s explore that in a lit­tle more detail

Under­stand­ing how GCs can play a part in requir­ing pan­el firms to trans­form con­tracts to fac­tor in both envi­ron­men­tal and soci­etal respon­si­bil­i­ty is not a hard stretch. Activ­i­ty such as this sits firm­ly in the ​‘tac­ti­cal sup­port team’ frame that we’re his­tor­i­cal­ly used to and allows them to have a tac­ti­cal impact in areas such as pro­cure­ment, finance, HR and more. 

But when asked to con­sid­er the val­ue pan­el firms offer at a more strate­gic lev­el — indeed help­ing to fun­da­men­tal­ly shift the way they think, oper­ate and feel, a more open-mind­ed approach can be required. Or, per­haps it is a more informed approach, that’s required?

One of the fun­da­men­tal cor­ner­stones of get­ting the very best from pan­el firm rela­tion­ships lies in under­stand­ing all stake­hold­ers. Their needs, wants and also the areas of risk, suc­cess and oppor­tu­ni­ty. This means not only under­stand­ing how the firm per­forms at a trans­ac­tion­al lev­el, but also the real­i­ty of peo­ple ver­sus the pub­lic image a firm por­trays to clients and the market. 

Let’s take an exam­ple. In pan­el firm num­ber one you might have a team of lawyers with a notable num­ber of peo­ple head­ing towards burnout, as well as sev­er­al peo­ple on leave due to men­tal health prob­lems. Despite both expec­ta­tions and what they’d wish, these lawyers are unlike­ly to be able to work well, or to add val­ue to the busi­ness. Allow­ing this to con­tin­ue will deval­ue the rela­tion­ship you have with this pan­el firm, as well impact­ing on speed and qual­i­ty of work. It, there­fore, has a clear and sig­nif­i­cant impact on over­all organ­i­sa­tion­al poten­tial and value.

Con­verse­ly, in law firm num­ber two, you might have a team of lawyers with struc­tures and mea­sures in place to mon­i­tor burnout and men­tal well­be­ing, as well as to sup­port lawyers expe­ri­enc­ing this. They might have a pro­gramme of flex­i­ble and ​‘at-home’ work­ing. Per­haps they’ve binned the ​‘we’re avail­able 24|7’ mobile phone num­bers and put in place clear­er com­mu­ni­ca­tion meth­ods that sup­port full team well­be­ing. As a result this team is like­ly to be a more pro­duc­tive, ​‘valu­able’ work­force. They’re like­ly to have bet­ter work­ing rela­tion­ships with you, deliv­er­ing greater val­ue to your in-house legal team.

We can see how law firm one is there­fore less valu­able to your busi­ness — less mature in com­mer­cial terms — than law firm two. 

Con­nect­ing Pur­pose and Performance

The out­put from the DNA Diag­nos­tic process is designed to be viewed along­side finan­cial per­for­mance report­ing, WIP and work done reports, as well as cred­it reports and the oth­er ​‘numer­i­cal’ data firms pro­vide when pan­els are up for review. It allows GCs to see how the ​‘human aspects’ are impact­ing on the bot­tom line, and over­all val­ue of the rela­tion­ship, as well as what you need to do to fix the problems. 

The DNA Diag­nos­tic approach fol­lows four steps:

• An intro­duc­to­ry meet­ing and work­shop to set up and man­age the project
• Run­ning the OMIN­DEX® Work­force sur­vey to gath­er quan­ti­ta­tive data on key cul­ture (val­ue and risk) fac­tors for each pan­el firm
• Pro­vid­ing you with a sum­ma­ry report and recommendations
• Run­ning a work­shop with select­ed firms to align, ideate and agree actions to deliv­er the opti­mised rela­tion­ships and pur­pose­ful val­ue envisaged. 

Whether we’re look­ing at inter­nal stake­hold­ers and well­be­ing or apply­ing the same approach to pan­el firms and their clients to under­stand what mat­ters most to them in terms of envi­ron­men­tal and oth­er ESG cre­den­tials, adding this study of the human ele­ments, along­side the finan­cial, means GCs get a mean­ing­ful, 360 degree analy­sis of pan­el firms as a whole. Armed with this you’ll be able to under­stand where your rela­tion­ship with pan­el firms is, com­pared to where you thought it was, how to max­imise return on this rela­tion­ship, the things you want to change, how to demon­strate authen­tic­i­ty exter­nal­ly and how to present this in an evi­denced, mean­ing­ful way. Togeth­er, we believe that this presents a com­plete pic­ture of an organ­i­sa­tion’s val­ue, health and matu­ri­ty. And, impor­tant­ly, this great insight can empow­er Gen­er­al Coun­sel to tru­ly trans­form the val­ue pan­el firm rela­tion­ships, in turn, are able to deliv­er through the wider organisation.

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Our work with The Matu­ri­ty Insti­tute on the DNA Diag­nos­tic is amongst the most mean­ing­ful work we do at Lex­So­lu­tions in sup­port­ing law firms who want to put authen­tic ESG at the top of their agen­da. Will you work with us in 2023 to build your organ­i­sa­tion­al maturity?

Con­tact Manu@​lexsolutions.​com for a con­ver­sa­tion on how we can work with you. 

1 Feb