General Counsel and Chief Financial Officers have long recognised the need to build a partnership that drives the financial, legal and ethical health of leading companies.
If you’re a GC, you’ve spent much of your professional life giving high-impact advice that guides CEOs, COOs, and the rest of your senior leadership colleagues toward sound commercial and operational decisions. It’s likely the financial implications of said advice was verified by your CFO.
You’ve probably shown a united front to guide your leadership team on countless occasions. Think of past or potential mergers and acquisitions, or litigations.
You may have managed a few of these situations in your career by now. Or you might be preparing to navigate these choppy waters for the first time. Either, way you’ll know how much they can test any company – big or small. That’s why the CFO and GC partnership can be instrumental in getting a good outcome when such challenges arise.
Of course, major company events aren’t the only force shaping this partnership. Or the relationships you have with the CEO, COO, and other senior management.
The disruptive reality is this: constant regulatory, financial and industry-wide change. And that means the C-Suite now demands more than reporting and cost-cutting solutions from CFOs.
From GC, they want advice that supports financial imperatives, not just legal and ethical ones and they want them quicker than ever before. A strategic business partner. That’s some significant responsibility, on top of your day job. So, how do you form a good partnership?
In the past, experience, intuition, and organisational knowledge were enough to fulfill your guardian role. But as demands have grown, so has a hunger for data to underpin good and swifter judgments.
Many CFOs want to use data to their advantage to support financial business intelligence. In fact, 89 percent want better reporting and dashboards with data visualisation, according to a PricewaterhouseCoopers study of 420 leading CFOs.
To provide the strategic advice your leadership colleagues need at a faster pace, and the data visualisation your CFO wants, your corporate legal team needs a dedicated and fit for purpose tool.
Legal operations platforms like Brightflag are purpose built for corporate legal teams and far surpass the capabilities of other account payable or business spend management software when it comes to keeping a system of record of your team’s day to day work and spend.
Automating the manual task of invoice review with A.I. not only saves time on admin but also utilises the data contained in individual line items to build the bespoke spend reports your finance team will find useful, down to matter phase and task level granularity.
Ask your CFO do they want their highly paid lawyers doing admin for reporting or spending more time providing trusted advice.
Budgeting for a legal team can be unlike doing so for any other. A litigation matter arising can leave the best prepared forecasts in disarray. However, you can use specific steps to communicate a structured schedule of costs with your CFO.
In their CLOC London 2019 session, Daniel Coll from Jabil and Mike Haven from Gap outlined their budgeting pyramid. From its foundational base to the top it consists of:
Daniel and Mike proposed accurate current year legal costs and clearly defining future costs projections be maintained throughout the year. Doing this will of course provide your finance team with a clear picture of what has been spent and what’s likely to require payment.
If you’re pursuing this type of budgeting framework the fundamental question is ‘do you have a software in place which provides you with the necessary reports?’ Trying to budget without one can become and chicken and egg scenario. Do I have the budget to get a dedicated system? Do I have a dedicated system to help me budget?
If you don’t have a software in place and you’re using significant time from your attorneys or legal operations team to manually prepare spreadsheet-based reports it’s likely the cost of a dedicated system will be relatively small compared to your outside legal spend and to the time efficiencies gained from implementation.
If you do have an existing software the question becomes ‘does it accurately provide the required reports you need to work with your CFO’?
What level of spend reporting does your CFO expect? If it’s not achievable without a dedicated system it’s time to have the conversation to put one in place.
Here’s 7 ways Brightflag helps you forecast your spend and hold up your end of the CFO – GC partnership:
CFOs and GCs clearly share a lot of common challenges and organisational overlap. GE’s former General Counsel Ben W. Heineman Jr. had a good perspective on this. He calls it “partner-guardian fusion”.
Writing in the Harvard Business Review, he says: “The CFO and GC must manage a dynamic tension: acting as “partners” to the board of directors, the CEO and top business leaders, but also, ultimately, as “guardians” of the corporation.”
The first step to fully realising the GC-CFO partnership? Your CFO holding up their end of the bargain and providing budget for your dedicated legal operations platform – so that you can hold up yours.