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You know what I never heard squat about during my Biglaw days? Annual Operation Planning, aka AOP. Oh sure, I heard plenty about boosting my billable hours while simultaneously being expected to keep the tab down on fixed-fee matters, but AOP was not a thing. Which in retrospect, was great, because I’m now convinced that AOP is a special circle of hell reserved for betrayers, heretics, and in-house counsel.
Look, I’m not anti-planning. I’m a huge advocate of it. And I can see why it would be useful to plan for events that need to happen in order to achieve goals and objectives (in other words, set in motion certain actions that will ultimately determine my bonus. Cool, cool, cool). I’ll even go as far to say that I can appreciate why Finance feels the need to spend so much time analyzing each variance and miss during AOP. And then discussing it with us. Months later.
And even though I know it’s coming and what to expect, each year I dread the pre-AOP pep talk and the expression that I can only describe as “cat butt face” that Jake, my counterpart in Finance, will don when he comes to talk to me about how much I suck at AOP and how I need to do better.
Never mind that my AOP budget is impeccable in terms of my ability to plan for all of my known expenses: bar and professional membership fees, legal subscriptions, and conferences. Check, check, check. Why? Because all of those expenses are easily calculated and predictable. I need a license to practice. There is a fee associated with it. Ergo, bar fees line item.
But you know what’s not easily calculated or predictable? And makes Jake pull out his cat butt face?
MY OUTSIDE COUNSEL AND LITIGATION SPEND.
And why is that, Jake asks? Because I have no idea what hot mess my business partners are going to get into this year. And let me tell you, every year they are getting more and more creative with their hot messes. Maybe this is the year Stan the Man is finally going to see if that vendor means business about that MFN. Or maybe we’re headed for a courtroom brawl because Engineering just can’t resist the forbidden fruit and keeps hiring people subject to non-competes.
Of course, that’s just the hot messes my business partners get into. Then there’s the shit storms that the outside world visits upon us. I’m not entirely sure Jake is aware of this fact, but we do make products that we sell to the general public. And while those products are labeled with clear and coherent warnings (if I do say so myself), no one actually expects the general public to read them or behave in a clear and coherent manner. Inevitably, some goober will decide to put our METAL product into a microwave and press on. Or submerge our NOT AT ALL WATERPROOF product in liquid and then press on. And as one can imagine, bad, expensive things follow.
Products liability aside, there’s also the issue of that enterprising and opportunistic crew (I’m not calling out patent trolls here…no wait, I’m totally calling out patent trolls here) that pick the issue du jour and hit us up for stupid gotcha money. For the umpteenth year in a row, I explain to Jake that frivolous lawsuits do not just go away like a bad Tinder swipe. It takes time, eDiscovery, and vaguely threatening letters to make these bottom feeders go away. And sometimes you still have to shell out, not because these bottom feeders could find a legal argument with two hands and a flashlight, but because it’s cheaper to just pay them to go away.
So when I tell Jake I’m doing my best to look at the past trends of our legal spend and trying to make smart guesses about where future suits will come from, I mean, I am in fact doing my effing best to put a number on the unknown. I don’t just pick this number out of a hat. It’s not like I’m in Sales. Okay, maybe it’s a little like Sales. I do pick out a semi-reasonable number … and then inflate it by a factor of three. But that’s only to protect us in the event that this is the year for bet-the-company litigation, as in, all bets are off, I have no idea how much it would cost to pull us out of whatever hole we’re in.
Jake calls this puffing up the numbers. When he says this, he puts on his cat butt face to make sure I understand that we cannot puff up the numbers. But I also cannot be under on my estimates either, Jake informs me. Because then I’ll be over my imaginary AOP number. And let’s be serious, it’s imaginary, a guideline at best, because if we do find ourselves in bet-the-company territory, you better believe our board will greenlight every dollar we need to right the ship.
But I don’t say any of that last bit to Jake. Because gloating about a potential company disaster isn’t a good look on anyone. No, that’s not it. It’s that I can accept that as a denizen of Finance, Jake deals in black-and-white absolutes, while I live squarely in the mists of the ever-shifting gray. And although AOP will always be this imperfect, unsatisfying process for both of us, it does somehow reflect the reality of the situation by providing for not only those black-and-white items we know about, but the gray unknown we can’t predict. Of course, if I try and point that out to Jake, you know the face he’s going to make.
It might be worth it.
Kay Thrace (not her real name) is a harried in-house counsel at a well-known company that everyone loves to hate. When not scuffing dirt on the sacrosanct line between business and the law, Kay enjoys pub trivia domination and eradicating incorrect usage of the Oxford comma. You can contact her by email at KayThraceATL@gmail.com or follow her on Twitter @KayThrace.