In early 2018, the leadership of the legal department at Telstra, a telecommunications company headquartered in Melbourne, Australia, began discussing whether its operating model, an ingrained legacy of more than 20 years, was well suited for taking the department into the future. These conversations occurred in congruence with a realignment of strategy for the company overall, driven by a structural shift in the Australian telecom industry and a significant downsizing that brought urgency and imperative. With plans for companywide headcount to decline by a net 8,000 from more than 32,000 employees, legal leadership wondered, “’How do we lift ourselves up?’” says Damien Coleman, Deputy Group General Counsel.
The traditional, business unit-aligned model had served the department well but did not allow its members to support a rapidly evolving business and would be ineffective in a new paradigm of a lower cost base and fewer resources.
“We knew we needed a legal department model that would provide flexibility and an enterprise-wide perspective,” Coleman continues. “We needed a better way to drive the performance of our function and scale adoption of new ways of legal practice and new technology.”
Coleman and his colleagues engaged in a re-imagining of the legal operating model to support the company’s new strategy to diversify beyond broadband and leaner organizational design. The new model has allowed the legal department to focus on strategically aligned priorities, realize significant productivity outcomes, and generate practice management data for the first time.
The team started by deploying attorneys to legal practice areas, which enables the members of the legal department to focus on work of the greatest value to Telstra and overall strategic goals, regardless of business unit. Practice areas include Finance M&A and Corporate, Disputes Risk & Compliance, Regulatory, Customer Contracting, Buy, Build and Partner Contracting, Employment Law, and Legal Operations. “Importantly, we have kept a number of business partner roles, whose responsibility is to maintain very close working relationships with the key decision makers in the business and to understand their priorities deeply,” Coleman says. While some business units did struggle with the change, legal team members quietly persisted in demonstrating that the new operating model would better serve the business.
Once the practice area structure was organized, focus moved to how the legal team would operate. Leveraging a variation on a legal innovation process that brought Telstra recognition as a Value Champion in 2017, the team conducted workshops with diverse representation that yielded three key streams of work: Demand and Workforce Management, Operational Enablers, and Capability. Within Demand and Workforce Management, the goal was a single, consistent way of receiving instructions from clients. To realize that goal, the team designed an online tool, Engage Legal, a smart web form that guides users through a set of interview-style questions to determine which practice area should handle the request.
Uptake of this “digital front door” has been extremely strong, according to Coleman. More than 3,000 requests were submitted in the first six months. “It has had a profound impact on the way the legal team operates. It has also given us a consolidated, granular view of demand, giving us data of a caliber we had not previously had,” he says.
Practice areas have adopted Agile practices to track work allocation, ceremonies such as “stand-ups” to prioritize and manage work, scrums to brainstorm problems, and retrospectives to identify improvement opportunities. The team is building a structured approach that measures every set of instructions against criteria to ensure its alignment to strategy and measure its level of risk. The team designed and implemented a training program to support the shift to the new model and participated in training on Agile fundamentals and techniques.
Although the results included a 15 percent reduction in operating costs, the company also lost one-quarter of the in-house legal team. “It was pretty challenging for everyone,” Coleman says. He hopes the story of his department’s success in the face of adversity will be instructive for others:
“The innovation is in the way we’ve gone about reimagining how to run the process and the benefits that brings in terms of how we better serve the business, how we operate more flexibly, how we provide better career and development opportunities for our people in a practice model that gives them more exposure to issues across the business; and the way in which we have stood up an entirely new technology interface that gives us data and much better demand management than we’ve ever had before. I wouldn’t say we’re done by any stretch—there’s much more work to be done—but our motivation was to show and share the way in which we went about thinking differently about how to run a practice and organize a team. We sought to embrace the opportunities and focus our efforts on the things that matter the most. We think there is some inspiration to be gained and there is much to be proud of.”