Staffing Models – The Winning Formula for Staffing Structure

This article marks the third installment in a series on designing target operating models ("TOM") to optimize legal department performance. As previously discussed, the 7 Attributes of TOM provide best practices to achieve this goal. This article will focus on Attribute No. 2: Staffing Model—the most important attribute because people are the most critical component of any TOM. Renowned author Jim Collins reinforces this concept in his seminal book "Good to Great," where he advocates for a people-first approach as the cornerstone of transforming good companies into great ones.[i]

According to Collins, the best leaders emphasize the importance of having the right people "on the bus" before determining the organization's strategy or vision. Once the right people are on board and the destination is set, the critical question remains: how will we get there? In other words, how should everyone spend their precious time to ensure on the journey and once we arrive? The answer lies in ensuring every team member operates at their highest and best utility.

Highest and Best Utility

My wife and I recently decided to sell our home in Nevada. After gauging the market and settling on a list price, the house sold within several weeks! But then came the hard part—moving. With countless tasks to coordinate within a limited amount of time before closing, moving is not fun. As a critical first step, my wife and I had to decide whether to do-it-ourselves with a U-Haul or hire a moving company. Technically, doing it myself would have cost less money but it would also cost something that we could not recover – critical time I could spend on other important tasks. We had to ask ourselves, given the circumstances, what was our highest and best utility?

As you can guess, we decided to hire movers. The movers were far more efficient and effective than we would have been, given they move homes multiple times per day. Delegating that task to movers freed us to focus on planning, closing the house and handling other critical tasks that could not be easily delegated. This experience underscored an essential leadership principle: to achieve success, every leader must ensure each person spends most of their time on their highest and best value tasks.

Role misalignment introduces significant risks including reduced job satisfaction, decreased productivity, increased turnover[ii], disengagement, lower morale and diminished performance[iii]. Misalignment also leads to bottlenecks, increased costs and reduced organizational performance[iv]. Even more concerning is that when resources are misaligned, critical tasks simply do not get done. For example, we are all aware of contract lifecycle management system implementation projects that see little progress after multi-year attempts because groups chose to insource the task without adequate resources. Other misaligned tasks get done so poorly that intended beneficiaries avoid them altogether, as I discussed in my previous article, citing a case study where 67 percent of business stakeholders bypassed Legal due to poor performance. Attribute Number 2 seeks to mitigate these risks and ensure highest and best utility through team shape design.

Determining Operational Team Shape

Team shape refers to the number and type of resources necessary to address the volume and type of tasks within a department or organization’s scope and remit. The type of task determines the resource type needed, task complexity dictates resource seniority and task volume determines total headcount. I will explore the nuances of each element of the above equation.

Resource Types. Understanding the three primary resource types that comprise team shape—strategists, operators, and managers—is essential.

• Strategists: These are the strategic thinkers and planners who rely on data analysis and interpretation to define long-term goals. Their contributions determine what actions to take to achieve operational objectives. In legal departments, General Counsels, Deputy General Counsels and Associate General Counsels typically serve as strategists.
• Operators: Operators possess technical proficiency in certain key tasks like contracting and litigation management. They follow direction from strategists to execute day-to-day tasks that achieve short-term goals and improve efficiency. Counsel, paralegals and administrators fall into this category. Operators represent the largest headcount, manage the greatest volume of work and account for the greatest collective spend, especially in high-volume operating environments.
• Managers: Managers oversee the operators and embody the ABCDs of leadership—Ability to competently execute tasks within their remit, Believability through integrous and honest action, Connection to the team and Dependability by following through on commitments. Their role is to motivate and implement best practices within the team.

Task Types. In a TOM, strategists spend most of their time on strategic tasks and operators on operational tasks.

• Strategic Tasks: Strategic tasks usually require senior resources with experience and relational skills. They focus on aligning diverse objectives and stakeholders to provide direction, including to operators. These tasks are high-risk but low-volume and occur periodically. Examples include:
  • Risk management and regulatory change management strategy.
  • Compliance program development.
  • Legal technology roadmap planning.
  • Outside counsel management strategy.
  • Legal operations optimization.

• Operational Tasks: Conversely, operational tasks are high-volume, low-to-mid complexity, reasonably repeatable and can be codified in operating procedures or playbooks. Operational work usually constitutes around 70 percent of in-house legal work. Examples of operational tasks include:
  • Contract review and drafting.
  • Litigation management.
  • Compliance monitoring.
  • Employment issues.
  • Intellectual property management.

It is worth noting that each company may have a different definition for “strategic.” For instance, a startup biopharma client viewed patent prosecution as strategic due to its pre-revenue status, where its valuation was heavily based on its patent portfolio. In contrast, a century-old food company client saw its customer relationships and supply chain as strategic rather than its global trademark portfolio.

Assessing Complexity. The type of complexity in each operating environment should also influence team shape. There are several complexity types to consider:

• Subject Matter Complexity: This is the most straightforward type of complexity and might include complex regulations or areas of law such as privacy and antitrust. Higher levels of complexity necessitate more seniority and experience, which typically require a larger budget.
• Political Complexity: Political complexity can shape team structure. At a previous organization, the CEO opposed self-service contracting for sales—even for simple NDAs—believing that lawyers should handle legal tasks and sales should focus on selling. Navigating such tensions between innovation and tradition required skills I developed in politically sensitive environments like Mainland China.
• Relational Complexity: Relational complexity often involves deciding when and how to provide white-glove service. For instance, an Associate General Counsel I worked with led a team tasked with building executive relationships. His team of senior resources had to discern which internal customers warranted premium service.
• Operational Complexity: In 2021, we managed a TOM design project for a SaaS company post-merger. The challenge was integrating two legal teams—one known for white-glove service, the other for using automated workflows and self-service. Balancing this operational complexity while maintaining quality and speed was crucial for successful integration.
• Organizational Complexity: Organizational complexity is particularly challenging, often seen in large, fragmented companies with high autonomy among distinct groups. For example, a global financial institution client divided it legal department into units supporting different business lines. Each unit operates independently and securing support for department-wide projects requires careful navigation across these groups.

You must consider each of these complexities when determining team shape. Higher levels of complexity call for more experienced resources, which impacts budgets and staffing decisions.

Leveraging Specialists, Artifacts and Bionic Teammates. Specialists, artifacts and AI, or “bionic teammates,” all hold special places in a TOM. They serve as accelerators, enabling legal departments to accomplish more with less budget.

1. Specialists: These resources, such as privacy and IP experts, not only bring in-house expertise that legal departments would otherwise outsource to law firms but their specialized knowledge is crucial for developing both artifacts and bionic teammates.
2. Artifacts: Artifacts are standard operating procedures that codify processes, escalations protocols and specialists’ subject matter expertise into guidelines. Artifacts allow junior resources to punch above their weight and instruct AI agents.
3. Bionic Teammates: AI agents take on specific human tasks, such as contract negotiation, responding to emails and extracting data from large document sets to upload into spreadsheets or other data fields. These “bionic teammates” rely on human subject matter expertise and artifacts to execute tasks accurately and consistently. Although not yet capable of fully replacing humans, studies show that well-deployed AI agents can reduce human effort by up to 200 hours per year.[v]

When designing TOMs, it is important to consider how specialists, artifacts and bionic teammates can help reduce effort, cycle times and costs while increasing productivity.

Insights and Practice Tips

1. Breakdown Scope and Remit: Charles Kettering, an American inventor and engineer known for his work at General Motors, said, “a problem well-defined is half solved.” When determining optimum staffing models, first clearly define your team’s scope and remit (TOM Attribute No. 1). From there, breakdown the work further to determine which aspects are operational and fit for optimization and juniorization.
2. Use Time as a Barometer for Complexity: In addition to the complexity types above, time can indicate complexity levels. For operational tasks, conduct time and motion studies to determine the amount of touch-time necessary to complete a task. Tasks with longer touch-times can be deemed more complex.
3. Leverage a Mix of Fixed and Variable-cost Resources: Using a mix of fixed and variable cost resources creates flexible TOMs that can adjust as organizations change. We successfully advised a General Counsel client to do so and, as a result, helped him avoid budget cuts.
4. Prioritize Reporting and Data Capture: Peter Drucker, a prominent management consultant, famously stated, “what gets measured, gets managed.” Collecting operational data such as matter volumes, types, costs and cycle-times provides necessary ingredients for data-driven staffing decisions. We will cover this topic further when we discuss TOM Attribute No. 6: KPIs and Reporting.
5. Invest in Success: Designing and enabling a TOM requires an investment of time, energy and budget. Dedicated resources – whether employees or external consultants – are critical. With the right level of investment, we have seen 70 percent improvements in matter cycle-times and you can too.

The Bottom Line. Michael Jordan said, "talent wins games but teamwork and intelligence win championships." A well-designed staffing model is crucial for legal teams aiming for success beyond individual achievements. It is the only way to help teammates operate at their highest and best utility.

In my next article on TOM Attribute No. 3: TOM Artifacts, we will cover the importance of codifying process and expertise.