Why Cross-Functional Collaboration Between Legal and Finance Is Critical

A company’s legal department is often considered a cost center, and in businesses that have higher risk of litigation, legal costs can put the entire business at risk. For this reason, it is important for legal and finance to be aligned, particularly when it comes to budgetary considerations, according to executives at new law provider Axiom.

For Axiom, this alliance between legal and finance is not just a matter of convenience but a strategic imperative for safeguarding the company’s interests in an ever-evolving regulatory landscape. The cornerstone of this collaboration lies in the shared goal of mitigating risks and supporting business initiatives.

Axiom general counsel Ashlin Quirk and CFO Eric Bouchard agree that the synergy between legal and finance departments not only mitigates risks, but also fosters a culture of accountability and innovation within an organization, positioning it for long-term success in a constantly changing marketplace.

Bouchard joined Axiom from Nestlé Health Sciences in January, and Quirk has been Axiom’s general counsel for almost a year, following an 11-year tenure at Dynata, where she served as general counsel, secretary, and data protection officer.

“The chief financial officer and the general counsel share a common goal of protecting the company from legal and regulatory issues,” Bouchard said.

“We’re probably the two main stakeholders in terms of risk management within the company. You want to support the commercial opportunities, but at the same time, from a regulatory standpoint, we need to support each other and work together, as we do for special projects.”

He said by working in tandem, legal and finance can ensure that resources are allocated judiciously, striking a balance between risk mitigation and strategic investment.

Quirk echoed this sentiment, emphasizing the cross-functional perspective that legal and finance bring to the table. “We both have a cross-functional view that some of our business clients may not have,” she noted.

Finding Solutions, Mitigating Risk

This holistic approach enables legal and finance to anticipate challenges proactively, thereby enabling the finance department to achieve positive outcomes while mitigating risk.

“Nobody wants to be in a position where you’re constantly hearing ‘no.’ You certainly want to be solutions-focused. And I think those two groups, together, are very well-suited to come up with alternative approaches that often can get the same business done while also mitigating risk,” Quirk said.

Central to this collaboration are regular communication and alignment of objectives between Quirk and Bouchard. The Axiom executives engage in weekly one-on-one meetings, fostering transparency and proactive planning. Additionally, monthly meetings between Quirk and the finance team provide a forum for discussing budgetary considerations and strategic priorities, ensuring that legal and financial strategies are closely aligned with broader organizational goals. Additionally, they get to collaborate when the full executive team meets once a month.

Quirk said no organization is perfect, so no organization is free from risk. “It’s a realistic way to operate. So it’s about making sure that the risks the organization is assuming are known and understood. Sometimes things happen that may not have found their way to either legal or finance,” she said, noting that she and Bouchard prioritize communicating, identifying risks, and developing solutions and mitigation strategies.

Quirk and Bouchard also emphasized the importance of a shared understanding of each other’s functions. They believe that, by bridging the gap between legal and finance, they can optimize resource allocation and drive efficiencies in legal operations.

This includes exploring alternative approaches to traditional legal services and leveraging technology to streamline processes, “ultimately maximizing the impact of legal spend on business outcomes,” Bouchard said.

“We collaborate frequently, but there’s still room for improvement in understanding each other’s roles and how our work intersects. There’s a lot to be gained from having that knowledge where you can really help each other to the next step,” he added.

Quirk also emphasized the importance of active listening, understanding the business perspective, and providing commercially minded solutions. She said it’s important to start conversations with “I’m going to get you what you need,” and highlighted the need for creative and flexible solutions that meet stakeholders’ needs.

That cross-functional visibility and getting the dialogue under way are very important, because if there is a claim, “it is legal and finance that end up dealing with the budgetary impact of that claim,” Quirk said.

Doing More with Less

When it comes to spending, the legal and finance executives said it is important for the law and finance departments to be on the same page.

“You can’t have one group that’s just completely untethered when it comes to budget controls and approaches. Since 2020, every department is being asked to reduce. Most organizations are not growing either legal or functional areas’ spend,” Quirk said.

“So it’s important to partner with finance. But it’s also important that, as a member of the executive team, you are not exempt from the same constraints that your colleagues are being asked to perform under,” she continued. “Legal doesn’t get unlimited budget. It’s just good business to make sure that the legal department is likewise functioning with a specific budget and being held to it.”

Bouchard added that the CFO can play a key role in helping general counsels get through the challenge of doing more with less, and still achieve better results. “If you can do some of those projects in a more efficient manner, then you can do more of these projects and, therefore, bring more reward to the company overall and to the CFO and to the business itself,” he said.

From: Corporate Counsel