Ten Things: Creating a “SWOT” Analysis of the Legal Department

I remember back in law school making fun of our fellow students who had business degrees.  We called it the “study of the obvious” and mocked them relentlessly.  Of course, I had to run away and hide when they pushed back and asked what my major was – it’s hard to stand tall and claim “political science” as a worthier endeavor.  Still, as always, it’s better to be the mocker than the mock-ee!  Once I went in-house, however, I began to have a much greater and sincere appreciation for all those business majors.  They were paying the bills!  They also had a very analytical and numbers-oriented way of looking at things.  Something that fit nicely with my approach as a lawyer.  Regardless, the first time I heard someone in the business say, “we need to do a SWOT analysis on that,” I thought they were talking about S.W.A.T., a kick-ass police drama from the mid-1970s.[1]  Why we needed to do a special weapons and tactics review of a new product launch escaped me, but I was excited to see how they would pull it off.  Sadly, no hippies or domestic terrorists needed a beating that warm and muggy afternoon in Texas.  Instead, someone started creating a “SWOT” two-by-two box on the whiteboard.  Damn (queue-up glorious choir music).  I quickly saw the beauty in what they were doing.  It was (and is) an elegantly simple way to look at a problem and think through the Strengths, Weaknesses, Opportunities, and Threats – SWOT.  I knew immediately that I had to steal this SWOT box thing for the legal department as it could easily apply to many things we were doing there.  While some of you likely have experience with SWOT analysis, I am betting that a lot of you have not.  It’s a great tool that I used frequently as general counsel, mostly as a way to strategically look at the legal department as a whole and how best to plan to add value to the business.  This edition of “Ten Things” takes you through how to use a SWOT analysis to analyze the legal department:

1.  What is a SWOT analysis?  In the context of the legal department, a SWOT analysis is a shorthand way to set out what the department is good at (Strengths), what it is not so good at (Weaknesses), where there are opportunities to add value to the business (Opportunities), and what you need to watch out for (Threats).  A 2×2 SWOT box is a common tool utilized by businesses all over the world (and if you have worked in-house long enough you have likely seen one – or a thousand).  Most sources credit the development of the SWOT process to Albert Humphrey, a researcher at the Stanford Research Institute in the 1960s.[2]  The original concept was called “SOFT.”  SOFT stood for Satisfactory (good in the present), Opportunity (good in the future), Fault (bad in the present), and Threat (bad in the future).  Over time, it was refined into SWOT (a much better acronym) and while primarily used for strategic planning it is flexible enough for use in analyzing one-off problems or tasks, or even evaluating employees.  Here is a sample SWOT 2×2 box:

SWOT1

Not only does the chart set out the four core SWOT attributes, but you can also see how the items on the left-hand side are positives, while those in the right-hand column are negatives, or as I frequently refer to it: value creation vs. value destruction.   As always, legal departments should look to maximize the former and minimize the latter.

2.  How to start.  Like any important project, start by blocking out time on your calendar.  Preparing a proper SWOT analysis is not something you can just throw together in 30 minutes and call it done.  To do it right takes a good chunk of time.  You can block out several hours at once or, as I like to do, block out one-hour increments over the course of a week.[3]  I prefer to use a whiteboard and erasable markers/Post-It notes, but you can use paper, PowerPoint, Word, napkins, or whatever works best for you to capture your ideas.  Don’t prepare it by yourself (unless you’re a legal department of one and have no choice).  It should be a team effort.  Also, it’s better to be as specific as possible with your ideas vs. general.  For example, you might put “Don’t communicate well with each other” as a weakness.  A better example would be “Rely too much on email to communicate with each other.”  Similarly, don’t put “Department lacks technology” when the better input may be “Don’t utilize Teams to the fullest extent possible.”  Again, do what works best for you and your situation but you can likely sharpen your initial ideas into more actionable ones with a little extra thought and effort.  Finally, organize the ideas in each quadrant in order of importance.  This way you can focus your time and resources on the most important things first because – no shock – it’s unlikely you and your team will be able to get to everything.

3.  Getting input.  Unlike Fight Club, the first rule of SWOT analysis is to talk about it.  A lot.  You want to get as much input as possible from as many sources as makes sense for your situation. In other words, you don’t want the SWOT to be just you and your thoughts.  Involve the entire legal department in helping brainstorm on suggestions and ideas for each box.  You can do this in a group session or, if you think you’ll get more honest input, appoint someone to collect suggestions from everyone with a guarantee of anonymity.  Next, reach outside the department into the business and get their input.  To the extent the C-Suite will participate, that’s gold.  But, getting input from other senior management and frequent customers of the department is just as good.  Use a simple (free) survey tool to gather input (you can also use it with the legal team).[4]  Outside counsel you use regularly can also be helpful (especially if you emphasize that you want them to be honest – especially about weaknesses).  The key here is to get fresh and honest input – not just things you want to hear or that confirm your own thinking.  That said, your thoughts are important – very important.  But, do your best to be objective and not overly positive on strengths or overly negative on weaknesses.  I used to keep a running list of items I would put in the different boxes so when the time came to create or update our SWOT, I already had a bunch of ideas and thoughts ready to go.

4.  Strengths. The fun (and easy) part of a SWOT is listing all the things the legal department does especially well.[5]  It could be anything from completing sophisticated contracts with speed, to an excellent working relationship with the sales team, to obtaining patents.  It can even be something like the high skill level or longevity of the legal team.  This is also where input from those outside the department is critical, i.e., what do others see as the strengths of the legal department?  Also, consider things like writing skills, use of technology, staying within budget, creation of self-help resources, and so forth.  The key is that a SWOT exercise really forces you to think through all the different attributes of the legal department (good or bad).

5.  Weaknesses.  Just like the now-standard interview question, describing what you are not good at can be tough – and painful.  The first thing to keep in mind is that you do not want this box to become in an exercise in how much you suck (I was usually helped sufficiently in that department by the sales team).  It is about identifying weaknesses that matter and if you can improve upon them will make the legal department more valuable to the company.  Weaknesses do not have to all be things you do poorly – though those must be considered.  For example, a weakness can be a lack of budget or people, lack of needed technology (or poor use of what you do have), or a poor “brand” within the company (e.g., “The Department of No”).[6]  In other words, consider your resources, systems, processes, and people.  Like strengths, input from outside the department – especially the business – is critical.  In this vein, keep a list of “complaints” you receive from the business about the department as those can indicate a weakness that requires attention.

6.  Opportunities.  Opportunities for the legal department are “positive” things where you must take some type of action to make them happen.  For example, there may be a great opportunity to identify an artificial intelligence tool that can help review and draft contracts.  You can identify it as an opportunity, but you need to take several steps to make it a reality.  If your legal department is hiring, then an opportunity may lie in finding an attorney who can bring a skill set not previously available in the department on board.  Reorganizing the department may be an opportunity.  In a similar vein, you may be able to find a training program that can allow your current team to develop (or hone) new skills and thereby become more valuable assets to the company.  And, as you’ve probably guessed, all four boxes of the SWOT are linked and interconnected, e.g., you can turn a weakness into an opportunity.  A strength may be available to counteract a threat and so forth.  Identifying opportunities is likely a part of the SWOT where the input of the legal team itself is the most critical source of ideas – but don’t ignore what the business sees as an opportunity for legal, as it may be something really interesting like involving the legal team in monthly staff meetings of the sales or marketing teams.  Also, opportunities may not be “legal” in nature, e.g., the new U.S. Senator for your state is from the same town where your headquarters is located.  This may mean a huge opportunity to raise the company’s profile in Washington or at least cultivate a new ally for the company’s government affairs program.  Finally, note that opportunities don’t need to be moonshots or game-changers, they can be small and/or simple but still have a positive impact on how the legal department generates value to the business.

7.  Threats.  While it sounds scary, your ability to identify “threats” to the department is a crucial skill all strategic in-house lawyers have developed, i.e., the ability to look outside the department and spot issues, trends, and developments that can negatively impact the team (or even the company).[7]  For example, a change in administration in Washington my mean enhanced antitrust enforcement or increased regulatory burdens.  Likewise, the COVID-19 pandemic is producing plenty of threats to legal departments, e.g., layoffs, budget cuts, litigation, bankruptcies, Force Majeure hell, and so forth.  In fact, a SWOT focused on the COVID-19 pandemic may be a good exercise to undertake right now.  One “threat” I personally dealt with was a change at the top of the company where new leaders had a different view on the importance and value of the legal department, including changes they expected to see even if those changes felt wrong to me (though I worded this problem very carefully in my SWOT).  One other thing I found helpful when completing the “Threats” box was a “PEST” analysis.  This tool looks at Political, Economic, Social, and Technological factors.[8]  You may think of these factors as external to the company, but keep in mind that all four exist within the confines of every corporation.  Finally, while primarily outward-looking, threats can arise internally to the department, such as the threat of departure of key department members and lack of a succession plan, uneven workloads that can cause problems for managers, or failures in your processes that cause unnecessary delays in getting work done.

8.  When to do it.  Obviously, you can perform a SWOT analysis just about any time you find the need to do one.  This is especially true if you are doing a SWOT analysis on a one-off basis for a specific problem (vs. a general look at the legal department).  If you are going to create a SWOT for the legal department generally, it makes the most sense to create it in the fall, before budgets and goals for the next year are due or finalized.  That way you can use the results to set budget priorities, goals, and KPIs[9] for next year.  Creating the SWOT toward the end of the year also allows you to see how the current year has panned out, organize feedback, and get surveys completed.

9.  What do you do with it?  There are many things you can do with the SWOT.  It can be the first step in a larger effort to create a multi-year strategic plan for the legal department.  It can be the basis of an extended team meeting or part of a legal department offsite. It can even be a “marketing” tool[10] to share with the C-Suite and leaders in the business to show how the legal department is acting on feedback and – more importantly – acting like a part of the business, using the same types of tools and analysis to strive for constant improvement.  In other words, it’s great PR for the legal department!  You can also use if for individual attorney reviews, goal setting (for the department as a whole or at the individual level), succession planning, building a department technology road map, reviewing different geographic locations of the department, and literally dozens of other important and practical uses.  When building out your SWOT, consider limiting the number of entries in any box to 5 – 10.  Too many entries can cause you to lose focus on what’s really important.  Also, update the SWOT over the course of the year as things change (which they will inevitably do).  It’s meant to be a tool to help you focus on what’s important.  If priorities – or circumstances – change, so should your SWOT.

10.  Why it matters.   It’s now table stakes for legal departments to a) think strategically, b) demonstrate business acumen, and c) constantly seek to add value.  As to the last point, see my post Showing the Value of the Legal Department.  A SWOT allows you to tick all three boxes in a way the business leaders at your company will understand and appreciate.  And, if you happen to have access to strategic plans and SWOTs created by the business, you can use those when creating your SWOT or to prepare one-off SWOTs that focus on single issues/problems.  Here is a simplistic example of a completed SWOT looking at the legal department as a whole:

SWOT2

*****

As you may have noticed, many of my posts over the past few months have focused on ways the legal department can show its value to the business.  That is probably the most frequent question I get from in-house lawyers and other readers of the blog.  The willingness and ability to create a proper SWOT analysis is another tool for your belt – a big, smoking hot-glue gun of value.  Yet, the power of a SWOT is in its simplicity, i.e., it’s an excellent 30,000-foot view of the legal department or a particular legal issue (e.g., data breach readiness).  It’s not the plan, but it will help you create the plan. Also, it is country-agnostic and works for any legal department anywhere in the world. Most importantly, remember to view it as a whole – the four boxes are tied and interlaced together.  If you want to go deeper on SWOT check out these articles: How to Do a SWOT Analysis for Your Small Business,  An Essential Guide to SWOT Analysis, and Harvard Business Review – SWOT Analysis.  As businesses start to re-open and the new reality of operating post-COVID-19 becomes clear, it’s the perfect time to try your hand at a SWOT.  It’s also the perfect task for your legal operations team to head up.  Meanwhile, stay safe, wash your hands, and- for the sake of others – wear a mask. Better days ahead!

Sterling Miller

May 26, 2020

Ten (More) Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies Volume 2 is out.  It’s my second book based on this blog series.  As the ABA says, “All in-house lawyers need to own this book!”  Click here to buy it.

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I have three published three other books: Ten Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies, The Evolution of Professional Football, and The Slow-Cooker Savant.  I am also available for speaking engagements, CLEs, coaching, training, and consulting.

Follow me on Twitter @10ThingsLegal and LinkedIn where I post articles and stories of interest to in-house counsel frequently.  

“Ten Things” is not legal advice nor legal opinion and represents my views only.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers.  If you have questions or comments, please contact me at sterling.miller@sbcglobal.net.

[1] Sorry, but the current version of S.W.A.T. cannot hold a candle to show of my youth and the exploits of Sgt. “Hondo” Harrelson.  So, I’m going to ignore it.  Which I get to do because it’s my blog.

[2] See, e.g., RapidBI “The History of the SWOT Analysis” by Mike Morrison.

[3] Making calendar appointments with yourself is an easy way to find and block time to get stuff done.

[4] See https://www.wordstream.com/blog/ws/2014/11/10/best-online-survey-tools for a list of free survey tools.

[5] If you can’t think of any it’s probably time to find a new job.

[6] See, Ten Things: Making Legal the Department of Yes.

[7] See, Ten Things: Spotting, Managing, and Reporting Risk.

[8] For more on PEST analysis, see https://pestleanalysis.com/pest-analysis/.

[9] See, Ten Things: Ten KPIs All Legal Departments Should Track.

[10] See, Ten Things: How to Market the Legal Department to the Business.

2 comments

  1. a:hover { color: red; } a { text-decoration: none; color: #0088cc; } a.primaryactionlink:link, a.primaryactionlink:visited { background-color: #2585B2; color: #fff; } a.primaryactionlink:hover, a.primaryactionlink:active { background-color: #11729E !important; color: #fff !important; }

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