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Webinar report: Legal Leaders: In-house challenges - new technology, new ethics and new boundaries

Our 2023 Legal Leaders webinar series with Thomson Reuters concluded with presentations from two prominent GCs.

Sonya Branch and Richard Hill shared with us how they’re facing up to new
challenges in the in-house landscape.

‘Be intellectually agile, curious and courageous’
Sonya Branch

‘Respond to the greatest needs, not the loudest voice’
Richard Hill

Sonya is Executive Director at the Bank of England (BoE) and the General Counsel for the Bank’s Legal Directorate, which consists of over two hundred colleagues. Previously an Executive Director/Board member at the Competition and Markets Authority and the Office of Fair Trading, Sonya has also held several leadership roles across Whitehall, including at the Cabinet Office and DEFRA. Prior to that, Sonya was a Partner at Clifford Chance LLP and was listed in the Cranfield School of Management/EY Women to Watch 2022. 

Richard is General Counsel for Downstream and Renewables at Shell, overseeing two hundred staff globally. Before joining Shell, he was a Partner and Head of Asia Disputes in a major international law firm and was recognised as a leading practitioner by the main legal directories. He has appeared as counsel and advocate or as arbitrator in over a hundred international disputes involving a wide range of commercial and state entities. 

Banking on people in the public sector

The Legal Directorate at the BoE supports all parts of the organisation. Its wide-ranging remit covers the bank’s evolving statutory and regulatory functions as well as traditional in-house legal responsibilities.

The team has been extraordinarily tested in recent years by geopolitical and macroeconomic events, including Brexit, Covid-19 and the war in Ukraine.

Evolving technology

Projects at the BoE include a joint consultation with the Treasury on the potential case for a digital pound.

A digital pound would be a potential new form of digital money issued by the BoE. The BoE and the Treasury have sought views from external stakeholders aas to the adoption and key features of a digital pound.

The BoE has also published a Discussion Paper on a regulatory regime for systemic payment systems using stablecoins and related service providers. Stablecoins are an example of recent innovation in payments and are a new form of privately issued digital asset which purports to maintain a stable value against a fiat currency.

As well as technical considerations, these innovations raise fundamental legal questions as to how we define key concepts in financial services, such as money, and where we set the perimeter for regulated activities.

Such questions underline the need for BoE lawyers to be intellectually agile, curious and courageous. 

Timeless ethics

Humble, human and in step with a changing world - the BoE’s vision resonates with its founding principles, which date back to the late 1600s. Staff must attest to “Our Code”, a document that embodies the principles of ethics, integrity and leadership expected of all BoE staff. There is recognition that the BoE, as an organisation, can only deliver on its mission if it maintains public trust. Accountability, integrity and openness are all part of the BoE’s inclusive and empowering culture.

For Sonya, these values, along with collegiality and a deep connection to the BoE’s purpose are the ingredients of a great workplace culture. Leading a trusted, diverse and motivated team is essential for lasting success. 

Equally important is to give in-house lawyers varied, challenging work that supports their growth and empowers them throughout their careers. The BoE has recently launched its first Ttrainee Solicitor Development Programme, which offers a route to qualification, enhances the BoE’s early careers offering and provides a succession model through which a trainee could conceivably join BoE as a trainee and progress all the way to General Counsel. 

Sonya is acutely aware that public sector employers can rarely compete with the private sector on remuneration so need to provide rewarding, intellectually-stimulating and meaningful career paths.

Changing boundaries

This year, new boundaries for the BoE arrived in the form of the Financial Services and Markets Act 2023. Designed to transform the regulatory framework for financial services, the Act places new responsibilities on the BoE.

Drawing on its ability to deploy at pace, the BoE Legal Directorate has been working closely with the Treasury on the Act. The BoE Legal Directorate will also be advising the BoE on issues related to Act, such as:

  • Policy making;
  • Rule drafting; and
  • the new accountability mechanisms that will apply to the BoE, as a regulator.

Cost control – the focus of energy in private enterprises

In the private sector, while the story of what legal functions provide is chiefly about value, it’s also about costs. Richard explained that at Shell, legal costs were 50-60% higher ten to fifteen years ago than they are today. Yet there’s still a focus on minimising the cost of running the in-house legal function. 

To achieve this, Richard’s focus is on four core areas.

1. Technology

Technology offers several ways to speed up workflows while cutting costs. At Shell, these include:

  • Self-service portals to enable colleagues to access legal via an intranet. The portals point clients in the right direction and enable legal to triage work so as to best support business priorities;
  • Standardised guidance and contracts. Keeping the best version of common documents in one place reduces the need to reinvent the wheel and means individuals don’t need to maintain their own systems; and
  • AI. The potential for AI in legal is extensive. AI could replace around 20 -30% of legal work in the next few years. Shell has teams looking closely at this potential.

2. Locations and people

Where in-house lawyers are based affects costs. London, for example, is expensive, yet still good value in terms of talent. The US is expensive due to exchange rates. 

Nowadays there are many places where quality legal work can be done. Shell has offshore legal centres in Kuala Lumpur and Krakow. Together they account for around 20% of the company’s legal work. Consolidating work this way allows subject matter experts to concentrate on their specialisms and frees up legal leaders to advise senior management on strategic goals.

3. Legal team structure

The right balance between generalists, subject matter experts and external counsel is crucial. On the one hand, clients need to know they’re dealing with experts in any given legal field. On the other, it’s expensive and inefficient to deploy five specialist lawyers to every project a client is involved in. Prioritising factors change over time, so review your balance regularly. 

Richard advises against paying hourly rates for external providers. Always seek to agree fixed fees, he advises. Also, if your internal capabilities allow, aim to manage matters in-house for as long as possible before engaging external help.

4. Culture
In a major cultural shift, Richard’s team has adopted a ‘supply-led’ approach. This means legal decides where its services are best deployed. It makes sense because, being answerable for its costs, legal should assess where it can provide the most value.

Inevitably, this means that internal clients don’t always get the lawyering they want. But it does ensure that legal is responding to the greatest business needs and not the loudest voice.

Thank you for joining us on these webinars this year. The Legal Leaders series returns on 17 January 2024 with Being influential in your role as an in-house lawyer.

If you missed this session the recording can be found here.