The in-house legal function, whether made up of one person or hundreds, must adapt to changes happening in their organisation where these give rise to legal risks and opportunities and where they impact the legal and regulatory framework in which the organisation operates.
New laws, regulations, products, services, operations, geographical reach and business initiatives are all likely to mean that your management colleagues will be seeking your advice (sometimes urgently) on what these changes mean legally and how best to navigate them.
It can sometimes seem that there never really is a ‘steady state’ as changes are constantly occurring as organisations expand, contract, innovate and react to changes in the business and political environments in which they operate.
It can be a challenge for the in-house lawyers to ensure that they have sufficient early warning of important changes so that they can influence policies and outcomes, where relevant. Early warning is only half the battle, of course, as it’s then necessary to respond to changes where these impact on the scope and nature of the legal service you’re providing. And this is likely to happen when you’re already stretched dealing with ‘business as usual’.
1. The importance of identifying change
Not all change is the same. It may be driven by external factors such as new legislation, regulations, changes in the markets or changing customer or supplier trends, or it may be internal such as opening a business in a new jurisdiction, launching a new product or service, changing an IT platform or a major reorganisation.
Major changes such as these will require legal advice on a range of different issues. The need for advice may be specific and short lived or it may require you to devote a considerable amount of time and resource to supporting the changes, for example by having one or more lawyers involved in project groups and due diligence operations.
It’s therefore vital that you have as much notice as possible about business plans before they’re fully formed or implemented. Major external changes such as legislation and regulations will usually be flagged well in advance and there will be time to advise and plan accordingly. An exception is where there is emergency legislation (think of the COVID 19 pandemic) where there were sudden and significant changes to adapt to. But for internally driven changes it matters that in-house counsel is aware and active at an early stage of the planning. How then do you make sure this happens?
2. The need to collaborate across the organisation
The nightmare scenario for an in-house lawyer is to be an afterthought – brought into the loop after plans and budgets have been firmed up and where you are only asked to advise on limited aspects of the changes. You then find that a number of important legal issues have not been addressed which may delay (or even derail) these plans. The lawyer is then seen as the blocker who’s holding up the roll out.
Avoiding this scenario relies partly on structural measures and partly on having strong relationships in place across the organisation built on trust and credibility.
Structural measures include getting lawyers onto management boards and committees so that they are involved in strategic discussions and decision making, including beyond where obvious legal issues arise. Similarly, placing lawyers on project teams is also a very useful way of becoming integrated into business activities and picking up intelligence on future change.
While it may make sense to you to involve lawyers more closely (and earlier) in business initiatives and planning, and to enlist them on strategic and project groups, you may need to be persuasive to achieve it. This is best done by building strong relationships across the organisation based on trust and credibility. How then, do you go about this?
3. Building strong relationships and networks based on trust and credibility
For people to trust you they need to know you. This means making the effort to connect and being curious about what’s going on in the organisation. Use formal catch up meetings as a way to keep in touch and take the opportunity to chat in more informal settings. Of course, you’re also helping to broaden your understanding of the organisation generally and to become more aware of the problems and challenges that your colleagues are dealing with.
You also need to be credible and authentic. Credibility comes from being good at what you do and in the way you do it. You’re expected to know the up-to-date legal position but you need to be able to communicate your advice in a way that people can understand and act on.
Good critical analysis and problem solving are built on good listening skills so it’s important not to jump in too quickly with possible solutions – otherwise people feel they’re not being heard or that their own work is being overly criticised. Avoid being judgemental – people know if there’s been a mess up and don’t want reminding of it. What they want is your help in fixing it.
You want colleagues to come to you early with issues. If their thinking is not fully developed it may be tempting to turn them away until plans or issues are clearer but, generally, it’s good that they want your early advice and it helps to encourage sensible early referrals.
Trust also comes from respect, yes of your legal skills but just as importantly from the way that you conduct yourself. So, if you’re regularly late for meetings, poorly prepared, talk over people, don’t deliver on your promises and generally give the impression that you’re the only grown up in the room – you won’t be respected or trusted.
Look to develop relationships across the organisation as much as possible. It helps that lawyers are often advising across different departments. But even if you’re not, try to cultivate a range of contacts as this will pay dividends as your career progresses and it will greatly help you to build your knowledge of what’s going on. A legal team with strong and extensive relationships across the organisation is well placed to be effective and influential. So, also, is a team that is perceived as having its finger on the pulse by being relied upon to flag important legal and regulatory changes in advance (good external contacts and intelligence helps here), which the team is able to feed into senior management and others, as appropriate.
4. Responding to changes
It’s one thing knowing about important changes but you then need to decide how best to respond, whilst also ensuring that the legal service you are providing is maintained at a high standard.
The challenge rather depends on the type of change. If it’s an internal business initiative such as a new product or expending into a new market and the lawyers are involved sufficiently early, you will have time to plan accordingly.
For major developments there will often be project teams and it will be important for legal to play its part in these. But this may mean having lawyers devote time to these projects at the expense of their other work. Hence, you’ll need to plan, for example, for this work to be allocated elsewhere in the team (if that’s possible) or for it to be insourced, outsourced, scaled down or perhaps for some less legally complex matters to be moved out of Legal into a client team, where possible. But these options need lead in, buy in and budget and strong relationships will really help.
Externally influenced change is often the most challenging because you may have less control over it, including sometimes of the timescales involved. Many organisations have had to respond rapidly to the changes brought about by the pandemic over the last couple of years and they (and their in-house lawyers) will have learnt a lot about how to improve and accelerate decision making, planning and operational responses to fluid business environments. One of the key lessons is that it really helps to have all the relevant actors ‘in the room’ so that the potential for misunderstanding and lag is minimised. These types of situations can also reinforce the role of the in-house lawyers in helping to find proactive solutions to difficult situations and further strengthen key relationships.
5. Delivering the legal service
In responding to changes, you will review how the legal service is delivered, how clients’ respond and whether it remains ‘fit for purpose’ or requires changing. Ongoing and sudden change requires you to assess the ways in which you may be able to streamline the advice and support you give and how you deliver it.
This should be part of a regular planning process built around your perception of ongoing needs, client feedback and good data. As change happens you will want to review potentially changing priorities and how you’ll respond (say to new areas of work) and how you may be able to be more effective and efficient. For example, by recruiting, outsourcing, increasing your training input, using technology more, and systemising some processes.
As part of your planning, you’ll be looking at the resourcing and structuring of the legal function. If it’s a very small team, it may be that you’ll make a case for one or more lawyers. In a larger team, you’ll question whether you’re structured in a way that meets the organisation’s changing needs and whether you’re making the most of technology or operational changes so as to reduce the amount of friction in the process of delivering your service.
Planning for change also means looking at skills, recruiting and training. Skills may need updating, for example if you’re taking on new types of work. Have you got the right mix of skills in the team, both legal and people skills? Do you need to recruit (if you can), buy in certain skills or train up some lawyers to meet changing needs? This is likely to put a spotlight on two areas in particular – your external lawyers and your recruitment and training processes.
6. Recruitment and training
Having the right people in your team is probably the most important factor in being able to respond effectively to change and deliver a high-quality legal service. As well as needing good lawyers, you need them to be adaptable, good learners, curious and able to establish good relationships with clients throughout the organisation and beyond.
This means recruiting not just for an immediate legal need (another contract lawyer, say) but recruiting lawyers who can readily adapt to changing needs and with the personality and resilience needed to thrive in an in-house environment. Of course, you will be limited by your budget and the state of the legal market but it will be increasingly important to recruit across a range of relevant competencies and not just legal skills, important though those are. Getting it wrong at the recruitment stage can take a lot of correcting.
Think also about how good your training and development is. Do they allow people to learn and stretch themselves or are they perfunctory? Many in-house lawyers are able to plug into their organisation’s training programmes but think about what your lawyers need, including access to mentors, legal networks, external opportunities and good management training.
7. External lawyers
Most in-house teams interact closely with their external advisers to a greater or lesser degree. Getting the relationship right is critical to the success and reputation of the in-house team. Do your external lawyers work with you to identify and respond to external changes or are you afraid to use them in a complimentary way because they will charge you for everything? Tolerating poor service at an inflated price is not an option but you may have to work hard to ensure that you’ve got the right partners for your team.
Finally, in the midst of fast changing work environments, it’s perhaps easy to forget that it is people that make change successful (or not) and that we all respond differently to change. How well you manage people through change is therefore often a key factor in its success.
8. Managing people through change
Particularly where change is significant (mergers, reorganisations etc) it can have a real psychological impact on people. The human response to change has been well documented (see, for example, the Kubler Ross curve).
Change can be unsettling even though it may sometimes be exciting. But we can feel sometimes like changes have been sprung on us without having had time to comment or react. If you’re leading people through a change, there are some things you can do to help the process: -
- If it’s a change that you’re instigating that may be unpopular with some, find champions to support the change and talk up the needs and benefits.
- Allow people to be heard but don’t pander to negativity unduly. There’s always a reason not to change something.
- Communicate, communicate. Wherever the change is coming from, people want to be informed of the reasons and the progress. Don’t underestimate the need to keep communicating even the routine or mundane.
- Change is a process and just because you or those in leadership roles have accepted the need for it and moved onto the next phase, it’s unlikely that anyone else will have. Timescales will vary but recognise that the bigger the change the slower moving acceptance of it can be.
- Put in places structures to support change. This could include, for example, regular team briefings; discussion time (say in team meetings); good training if that’s relevant; incentivising changes in behaviours; rewarding change; leading by example; getting champions and early adopters involved; understanding that change is both emotional and procedural and provide the appropriate support (say, through HR).
- Use a change management programme. This may be sophisticated and organisation-wide or it may simply consist of a simple project plan with timescales, milestones and success measures. Don’t just talk about change but make it visible as well.