Step up your legal game

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Applying management science thinking boosts a legal department’s capacity to support its business departments. Steven Cao, general counsel of Energy China Overseas Investment Division/China Gezhouba Group Overseas Investment, reveals how in-house counsel can successfully apply project management methods

In academic circles, it is said that corporate activities can be broadly classified into two types ‒ operations and projects. Operations consist mainly of an enterprise’s continual and repetitive business carried out by its functional departments. Their management structure is characterised by hierarchy and gives rise to the bulk of the enterprise’s revenue and fixed costs. The focus of operational activities is efficiency and productivity, their objectives are mainly performance-driven and cost reduction, and they maintain the stability and continued existence of the enterprise.

Projects, on the other hand, include the enterprise’s transformational and innovative business, and are implemented by project management teams. Their management structure is flat, and they produce dedicated results and products within a specified period of time and budget. The focus of project activities is strategy, transformation and change, their main goal is long-term value creation, and they promote the long-term growth of the enterprise.

To achieve longevity, an enterprise must maintain flexibility at the organisational level. That is, it must find a balance between developing its existing capabilities (operations) and seeking new ones (projects). Operations lead the organisation forward, whereas projects promote organisational change.

The cover story of the November-December 2021 issue of Harvard Business Review, titled The Project Economy Has Arrived, observed the following: “Projects have displaced operations as the economic engine of our times. With advances in technology such as information technology, robotics and artificial intelligence, future business activities will change from being efficiency-driven to being change-driven. By 2027, some 88 million people around the world are likely to be working in project management, and the value of project-oriented economic activity will have reached USD20 trillion.

Steven-Cao, Step up your legal game
Steven Cao

“Despite this transformation, many leaders still don’t appreciate the value of projects and project management. Only 35% of the projects undertaken worldwide are successful ‒ which means we’re wasting an extravagant amount of time, money and opportunity. Therefore, companies need a new approach to project management. They must adopt a project-driven organisational structure, ensure that executives have the capabilities to effectively sponsor projects, and train managers in modern project management.”

The US Project Management Institute (PMI) defines a project as a temporary effort to create value through a unique product, service or result. It is an activity with a definite start time, a fixed scope, and specific resources. Accordingly, projects are limited in time. Furthermore, a project is not a routine action, but a specific series of actions taken to achieve a certain specific goal and, therefore, a project is unique.

A project can be a massive work, such as the construction of the Great Wall, the pyramids, etc., by the state, or an activity such as a new product development, investment or acquisition by an enterprise.

Project management, then, is the bringing to bear of knowledge, skills, tools and technologies to project activities in order to meet the requirements of the project, ultimately deliver the project products to the client, and give rise to organisational process assets. Project management is achieved through the reasonable application and integration of the management processes required for a given project. Based on the lifecycle of a project, project management consists of five major phases: initiation, planning, execution, monitoring and closure.

Nowadays, the external environment is full of uncertainty, volatility, complexity and ambiguity, and the reform and development of enterprises increasingly depend on the success of strategic and innovative projects. The new management philosophy based on project management is gradually developing into an important approach to creating long-term value for enterprises.

The effective application of project management thinking, concepts and working methods is extremely important for coping with the complex external environment, unearthing new business growth points, and promoting business reform and innovation. Project management capabilities have also become a core management skill for corporate managers.

For in-house counsel and lawyers, the application of project management thinking, tools and methods is very helpful in improving counsel’s project management, and risk prevention and mitigation. This is mainly reflected in the following two aspects.

First, applying agile project management to enhance the efficiency of legal opinion feedback. The term “agile management” is a management process that takes the evolution of the user’s needs as the core of project management activities and adopts a rapidly iterating and step-by-step approach to enable the project to achieve or exceed the set requirements and expectations under conditions of limited resources.

Agile management was first applied by internet companies in their software development, particularly when customer requirements were unclear or rapidly changing, with the goal of developing usable software in a shorter period. Now it has become a widely recognised project management methodology internationally, and has spread to many other sectors.

In a work environment that implements agile project management, in-house counsel and the legal team simplify cumbersome approval procedures and document management, form an agile legal team that crosses functional and specialised departments, advocates flexible face-to-face communication within the project team, and between the project manager and the client, and adheres to the principles of “fast, simple, small rapid steps, continuous delivery, value first and embracing change”.

Based on the progress of a project and the issues encountered, it constantly tracks the client’s needs and rapidly provides legal opinions in order to respond to the ever-changing external environment and the client’s needs.

In the course of preparing and compiling a legal opinion, the head of the legal team increases the authorisation and grayscale management of the project manager (i.e. the handling counsel or lawyer), and permits the project managers to make decisions at their discretion and rapidly provide their legal opinion within a specific scope.

The project manager, in the course of providing his or her legal opinion, needs to have a timely and in-depth understanding of the client’s legal requirements, even going so far as to proactively unearth such requirements, constantly update the list of issues, and arrange them in order of priority. They are not called upon to put forward a one-time perfect solution, but rather to give priority to solving directional and critical issues, and timely issue stage-dependent legal opinions or, in the event of a change in the preconditions, revise their original legal opinion.

Admittedly, such a working method poses a great challenge for traditional legal work that prizes rigour and completeness, and places greater demands on in-house counsel and lawyers to be closer to the businesses and proactive in understanding needs. But this method can maximise project value, respond to the rapidly changing external environment and client needs extremely efficiently, respond to issues and control work costs with minimal loss, and increase the efficiency of legal support for the project and client satisfaction.

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