The evolving role of in- house counsel
Here, we look at how technological, social and economic events have changed the business landscape – and how this affects the role of the in-house lawyer.
There are very few constants in the modern workplace, but one of them is change. From corporate scandals to new technologies, we live in a world that forces us to embrace and plan for change. This is especially true for the in-house lawyer.
Future proof your role – and your teamTime was when the role of the in-house legal department was cut and dried and well understood by everyone, lawyers and non-lawyers.
Legal was there to provide functional technical legal advice, oversee the finer points of governance, ethics and compliance and administer the organisation’s policies and guidelines. And where external counsel was required, the in-house lawyers would source and manage the necessary support.
Unsurprisingly then some commonly-held perceptions about the legal function took root and become accepted wisdom down the years.
‘Legal is reactive, not pro-active’, people would say. ‘It stifles innovation and creativity. Being highly conservative in its outlook, it seeks to mitigate risk and liability regardless of the organisation’s priorities and strategic goals. To sum up, legal seems disconnected from the organisation as a whole.’
However, it’s not that simple anymore.
The years since the start of the 2000s have brought with them some seismic changes and game-changing events. While these affect people in all disciplines within organisations to varying degrees, it’s the legal function that often bears the greatest burden of many of them.
As well as their traditional duties, today’s in-house legal teams must also get to grips with:
- Rapid advances in technology and data protection legislation;
- Disruption by innovative startups;
- Rapid globalisation of trade and information exchange;
- The fallout from corporate scandals, the economic crisis and turmoil in world financial markets; and
- Increased focus on corporate governance, compliance and enforcement.
All this while coping with internal demands for enhanced productivity, efficiency improvements and cost savings. In other words, while striving to achieve more with less.
To cope with these new demands, the role of the in-house lawyer has had to evolve and expand into new areas. Typically, these include:
- Regulatory and government affairs;
- Corporate and external affairs;
- Human resources;
- Enterprise risk and crisis management;
- Audit and compliance reporting;
- Corporate security, cyber security, information security and data privacy;
- Quality and control systems;
- Corporate social responsibility (CSR);
- Organisational and brand reputation; and
- Business functions.
Indeed, in many organisations, the role of the General Counsel has been recast as Chief Legal Officer.
This is more than just a change of job title. It’s an acknowledgement that the most senior in-house lawyer is part of the C-suite. It recognises the expanded job description, increased responsibility and the complex challenges the role holder is taking on. It also reflects the strategic nature of the legal function and the contribution it makes to organisational growth.
Develop new competencies
As the in-house lawyer role has changed, so too have the required skill sets and behaviours. Of course, in-house lawyers will always need to be analytical thinkers and hold a relevant legal qualification. However, more and more people specifications for the senior in-house role these days require you to be:
- An enabler and strategic partner, not merely a service provider;
- A leader with business, financial and management skills – or a willingness to develop them;
- Knowledgeable and aligned with the organisation’s core business activity and goals – you should know how and where the organisation makes its money and where future growth will come from;
- A creative thinker who can help meet a range of business challenges;
- Technologically savvy and receptive to change;
- Capable of providing clear, concise, pragmatic and commercially viable legal advice in language non-legal colleagues can understand;
- Always mindful of the organisation’s tolerance and appetite for risk; and
- The guardian of the organisation’s brand and reputation.
The position also calls for people skills, social skills, communication skills, social intelligence and emotional intelligence.
Win trust and build influence
The evolution of the in-house role has also changed what you need to do to win the trust and support of your colleagues.
Organisational-wide knowledge, as opposed to encyclopedic legal knowledge, is key here, as this will help you work collaboratively and solve problems that extend across different departments or functions.
Good senior management really values and appreciates collaborative colleagues in the legal function, so aim to be a facilitator and connector between functions. That said, you will, at times, need to walk a fine line between maintaining and developing relationships with colleagues and giving them firm legal advice that they may not want to hear – or may even disagree with. Wherever possible, avoid saying ‘no’. Instead, give your advice – and the reasons behind it – as clearly as possible.
Building trust and influence doesn’t happen overnight. Give it time and persevere. Remember too that while never welcome, a business crisis or major legal challenge can present legal with an opportunity to win new respect among senior colleagues.
Balance risk against rewards and provide strategic advice
Few organisations achieve their goals without taking risks, yet tolerance of risk varies greatly from one organisation to another.
A risk-averse organisation generally will reduce its potential for profit, while those that take excessive risks can not only lose money, but find themselves involved in litigation and regulatory investigations, leading to fines and/or restrictive undertakings. Potentially even worse than this is the damage excessive risk-taking can do to an organisation’s reputation, consumer trust and, ultimately, share value. And, thanks to social media, things escalate extremely quickly these days – and take years to recover from.
The reason risk appetite varies so much is that the factors that influence it are different in all organisations. To help balance risk in your organisation, consider:
- The regulatory framework in your industry sector – does it punish or reward risk?
- The norms in that sector – what is considered acceptable?
- The competitive environment – how much risk do you need to take?
- Your own management experience and individual tolerance for risk – are you aligned with other senior colleagues?
- Your own knowledge of the business and industry – can you back your advice with sufficient insights?
- Your standing in the organisation – will colleagues trust your recommendations?
- Ownership of your organisation – is it publicly or privately held and do the shareholders approve of the risks they’re exposed to?
- The wider industry outlook – is growth and overall performance healthy?
- The resources available to you – do you have the budget and people necessary to manage the risks the organisation wishes to take?
Stay relevant and keep adding value
Once you’ve embraced the evolved role of the in-house lawyer and won the trust of your colleagues, it’s vital to retain and develop both your personal standing and that of the legal department. Failure to remain relevant as a strategic contributor could see legal being seen as a cost centre in the eyes of senior management – and possibly even outsourced!
To avoid that, aim to be the ultimate partner – someone people turn to not just for legal advice but commercial advice too. Show you’re an all-round business advisor and team player that just happens to be in the in-house counsel.
This may be easier said than done but great ways to safeguard the future of the legal function include:
- Being a visible and engaged business leader;
- Participating in the business planning process and ensure the legal function business plan is aligned with the business’s objectives;
- Being innovative and embracing change;
- Taking a strategic approach to the legal advice you provide;
- Developing your people skills;
- Developing and investing in your people;
- Being flexible, adaptable, agile and approachable; and
- Expanding your management, business finance and leadership skills.
Expect more change
Finally, expect the world, and with it your role as an in-house lawyer, to keep changing.
In the coming months and years, billions more people will be online, using billions more networked devices accessing billions more terabytes of digital data.
The internet of things (IoT), cryptocurrencies and artificial intelligence (IA) are here to stay and will challenge law makers and legal advisors for decades to come. And that’s without the undoubted torrent of platforms and new technologies yet to be invented.
As for in-house lawyers themselves, evidence suggests that their roles will continue to evolve and expand. At the same time, as the costs of running a legal function increase, more will be demanded of their teams from ever tightening budgets. With this in mind, we’re likely to see smaller, flatter and less hierarchical legal teams in the future, led by generalists, rather than subject matter experts.
The in-house counsel role has changed considerably in recent years.
Once the provider of legal advice and overseer of ethics and compliance in an organisation, the senior in-house lawyer today also needs to be a commercial advisor, a strategic thinker, a forward planner and an excellent communicator.
Influence and trust is as important as technical legal knowledge and perhaps most important of all is the ability and willingness to embrace change – not just change that has occurred in the past, but change that’s undoubtedly coming in the years ahead.
To read the next article titled 'Career planning for in-house lawyers - strategies' click here.
This article was submitted by Angus Haig.