Regular Updates; FINAL UPDATE 10 on "Be a trusted PARTNER" ; How the legal department can enable good business #businesspartnering
RE-POSTING IN ARTICLE FORMAT FOR BETTER READIBILITY; see updates at the bottom...
With this entry I would like to kick-off a discussion about what it takes for us in-house lawyers to add maximum value to our business. What are the main aspects of good business partnering? I would like to start by suggesting the following 10 theses for discussion. In infrequent intervals I will then share my views on each of those but would be happy if you also shared yours. So here are my 10. What do you miss, what would you add? Any of the 10 controversial? Too trite? What would be more concrete assumptions, proposals, statements?
1. Seize the sweet spot of the in-house lawyer
2. It all starts with (legal) knowledge and expertise...
3. ...Combined with business savviness
4. Diligence is underrated…
5. ...And so is commitment!
6. Be an advocate not a referee
7. The 3 Cs of effective communication - clear, concise and consistent
8. Have the courage to decide
9. Be a TRUSTED partner
10. Be a trusted PARTNER
Looking forward to a fruitful exchange.
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Update 1: Seize the sweet spot of the in-house lawyer
All our thinking about how we can best partner with the business needs to start with why a business would at all have an in-house legal department. In-house legal adds most value when we seize the sweet spot of the in-house legal department. I have shared my ideas about what that sweet spot could be here: https://www.dhirubhai.net/pulse/sweet-spot-in-house-lawyers-j%C3%B6rg-h%C3%A4ring
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Update 2: It all starts with (legal) knowledge and expertise...
In German we have a great saying about money that unfortunately does not translate very well: “Geld ist nicht alles, aber ohne Geld ist alles nichts.” - something along the lines of “money is not everything but it’s all nothing without money”. You could say the same about legal/contractual knowledge and expertise: expertise is not everything but it’s all nothing without expertise!
The business wants us lawyers to tell them what the contract or the law says - what else would they have a lawyer for? The response we give, or more generally the work we do, will only be convincing if we know what we are talking about. So, what are the most important facets of legal expertise for the in-house lawyer? Here are a few suggestions:
# Analytical skills. Understand legal issues regardless of how complex they are; isolate and/or structure a complex problem (“slice the elephant”) in order to be able to resolve issues in packages.
# Quick thinking. Be able to quickly grasp the gist of a problem, cut through the chase and understand where the crux of the matter lies.
# Pragmatism. Be able to separate theoretical risks from the real ones.
# Sheer knowledge. While it is perfectly OK to every once and then say that you need to do some research in order to answer a particular legal question everyone will agree that what makes us come across as highly competent is whenever we know from the top of our heads how a particular problem is looked at by scholars or in case law. So be a knowledgeable expert in the best sense - without boring others with your knowledge of details.
# Network of experts. Know your limits! In today’s world nobody can have the expert knowledge regarding all legal fields. Thus, we are best when we have a solid expertise in our home turf but can rely upon a network of friends, colleagues, etc. whose specialist expertise we can tap into whenever we need.
# Relentless orientation towards results, performance and success. The best in-house lawyers excel by never losing sight of the result they want to achieve, by delivering a perfect work product (e.g., the time it takes to run your memo through spell-check is minimal but it dramatically increases your work product if is not loaded with typos...) and by relentlessly working towards success because they hate to lose.
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Update 3:...Combined with business savviness
Rasmussen college suggests the following ten skills (5 hard skills and 5 soft skills) you need to become business savvy.
While I generally agree I am missing some and finding others secondary, so here is my list:
# Intrinsic interest in products, services and technology. A good way to learn about the product portfolio is to visit a factory; more generally, asking questions helps – asking a lot of questions! Questions like: What are the products/services we are selling? How do they work in terms of technology? What distinguishes us from our competitors? Why is player X successful in the marketplace and player Y is not? What is our unique selling proposition? Why are we selling through distributors and not with our own sales force? By the way, there is also a nice psychological side-effect of us asking all those questions: It sends a message to our business partners that we are interested in what they do – and, guess what, they like that. We like it when people are interested in our legal/contractual stuff, so why would it be different the other way around?
# Understanding the figures. What is true for the portfolio/technology side of the business is just as true for the business administration side. The best way to understand your business’ figures is to ask a controller or similar BA colleague to walk you once through a set of your business’ quarterly figures.
# Project management. They do not teach us project management skills in law school, but we need them; not just to understand how our business manages projects but also for legal project management. Legal project management starts with very simple things like putting together very simple ground rules and a responsibility matrix: Who works on what? Who leads? Who contributes?
# Follow business discussions in the media. If you want to be taken seriously in business discussions, it is also helpful to be up to speed on the more general business issues. What are activist shareholders, what do they do, how and why? What is the latest and greatest in the discussion on conglomerates vs. “pure plays”? Is the US/China trade war helpful or harmful for Europe, and why?
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Update 4. Diligence is underrated…
It goes without saying any advice we are giving should be based on a solid analysis of the facts and the contract/law. However, let me mention a couple of traps in this context and how to avoid them:
# Look at the entire universe of options. When we are analyzing an issue and looking for solutions it helps to always ask ourselves whether we are really considering all (meaning: ALL) realistic alternatives to solve or look at the issue. Sometimes the most creative solutions are not considered because they do not even make it as a possible option into the decision-making process.
# No jumping to conclusions. Do you remember a meeting in which it was clear that only one option to address an issue would be viable (the infamous alternativlos – no alternatives available) or that one option was vastly superior to all the other options? Then only that one option was discussed (and eventually decided upon) without really looking at the alternatives. Sounds familiar? Beware of jumping to conclusions. The best and most frequent appearance of this phenomenon I have observed in the past years are staffing decisions, with hiring managers not even wanting to post a job because they already have an “ideal candidate” in mind. I then always ask them how they can know the candidate they have in mind is ideal before they have posted the job and see who else applies…
# Pre-mortem discussions. As per Wikipedia, a pre-mortem is a managerial strategy in which a project team imagines that a project has failed, and then works backward to determine what potentially could lead to the failure of the project. This is an incredibly helpful technique, especially for us in-house lawyers because it is an elegant tool to focus the discussions with the business not just on nice power points and great opportunities but also on the risks of a project.
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UPDATE 5. ...And so is commitment!
This one is all about going the extra mile. While we all want to make sure Legal does not get (ab-used) for stuff others can do better, cheaper, etc., we want to go “all-in” on the legal/contractual side of a project. We do not easily say “no” but always look for solutions even if those solutions may be tedious, creative, burdensome or even risky. However, at the same time we also must be equally committed to step in and protect the business if things get too risky. It is all about the right balance here: The more often we have gone the extra mile to make a difficult deal possible the easier people will accept our “no” in the rare cases when we have to protect the company for the simple fact that over time our business partners have come to know us as someone who does not easily say “no”.
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6. Be an advocate not a referee
I think this is important although I admit that the copyright for this one is with my buddy @Michael Schultheiss. Three aspects here:
# Do not stop at the analysis phase. Identifying legal issues and saying whether something the business would like to do is compliant, against the law, risky, etc. is only half the battle. Our first and foremost task is to help the business implement their plans and ideas, so in true advocacy we should start by thinking why what our business wants to do is possible, legal, etc. Of course, if arguments for that opinion are not available, do not pass the laugh test or are in any other way not sustainable, or if there is an obvious and better solution, we should sincerely look at the alternatives (see “look at the universe of options” above).
# Understand what the business wants to achieve. When we say that what the business proposes to us does not work the immediate reflex is to look for something else that could work instead. In order to be able to offer viable alternatives it is pivotal to understand what our business partners want to achieve. So, we are back to what we discussed earlier about how important it is to ask many questions…
# Make use of the opportunities the law provides. If we want to excel, we need to stop thinking of the law as a framework that defines the boundary conditions of what a business can do. The law often provides for business opportunities! IP exploitation is just one very prominent example, but I am sure there are many more if we only think hard enough.
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7. The 3 Cs of effective communication – clear, concise and consistent
So, now we have a lawyer who is good in terms of knowledge, diligence and commitment. He or she develops solutions that help the business. What is still missing? Well, what I sometimes see missing is the ability to properly communicate the advice in a compelling manner, especially in a senior executive environment where the atmosphere may be tense and loaded with impatience. Here are my tips (that of course only help if you have done your homework on content…):
# Be clear on how you structure your communication. People follow you best when what you have to say has a (simple) structure that they can hang on to. I have come to learn that it is also helpful if you keep the same structure when talking to the same business partners more often. And – the simpler the better: “Dear business partner,
(i) The issue we need to discuss/decide is X;
(ii) Y and Z are your options to resolve the issue;
(iii) These are the pros and cons of Y and these are the pros and cons of Z; and
(iv) If I were in your shoes, I would decide to go with option Y.”
# Be concise and simple. As lawyers we often pride ourselves in how we master the most complex and tricky issues. And, indeed, it is important that we in fact can master complexity. However, I have seen too often that this “process” of mastering complexity took way too much space in the communication to management. Instead, I invite you to think about taking out complexity and making things simple. Phrases that enable you to do that may begin with something like: “Eventually this is a very simple decision. After all factual and legal analysis, it all boils down to a simple trade-off between Y and Z. “
# Be consistent. It is incredibly frustrating when your legal department says one thing one day and something different the next (unless the facts or the law have changed overnight, of course). Inconsistency in your messages will lead people to not trust what you say. So, if you want to earn credibility as a lawyer, you must be consistent in the messages you send to others. This also means that your advice should not change depending on how much pressure (aggressive) business partners put on you. “Don’t crack under pressure” is a marketing slogan of a Swiss watch manufacturer but also a good motto for our work as in-house lawyers.
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8. Have the courage to decide
It goes without saying is that as in-house lawyers we are not replacing the CEOs/CFOs and making business decisions on their behalf. However, beware of the other end of the scale.
# Have an opinion instead of saying that something “is a business decision.” To begin with, stating that something is a business decision is trivial because, as long as we keep within the compliance boundaries, pretty much everything is a business decision. More importantly, if we say that something is a business decision, we create the perception that we do not want to have any skin in the game but rather stand on the side lines with our legal advice. Instead, we should have an opinion as I mentioned earlier: “If I were in your shoes, I would decide to go with option Y.” Having an opinion shows our business partner that we want to be part of the business and that we are willing to take some responsibility for our legal advice.
# Decide based on imperfect information. It is very easy to bring things to a grinding halt by asking questions. It is very easy to avoid deciding by analyzing things to death. The art, however, is to know when you have enough information to make a good decision. The business will appreciate if you are willing to make/advise decisions on the basis of imperfect information but you should always be fully transparent about that: Say things like: “We know have 90% confidence that under the laws of country X this course of action entails risk Y but no other risks; we think we can live with risk Y. If, however, we would like to be completely sure there are no other risks we would need to contact a local counsel to confirm.” By the way, I do not think there is a contradiction between what I am saying here and what I said earlier on diligence: It is one thing to diligently analyze all available information and procure all reasonably available information but it is another to at a certain point gauge whether digging further will add additional value to the analysis that is proportionate to the additional effort.
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9. Be a TRUSTED partner
# Many books and internet articles have been written on how to build trust. The web site positivepsychology.com at https://positivepsychology.com/build-trust/ gives 12 general tips on how to build trust. Although meant to be tips on how to build trust in a family relationship I think for the most part they also work in business life – by the way, my favorite ones are no. 10 (“don’t always self-promote”) and no. 12 (“admit mistakes”).
# Intrinsic interest in the business builds trust. I wrote earlier about how important an intrinsic interest is in products, services and technology, so suffice it to say here that the same intrinsic interest also helps us to build trust because it gives our business partners the impression that we are interested in what they do.
# (Unfortunately), nothing better than a good crisis. As in-house lawyers we want to be proactive and preemptive risk managers rather than fire fighters. In other words, our added value for the business is in building a fence at the top of a cliff rather than being a good ambulance in case somebody falls off the cliff. In terms of building trust, however, – and I hate to say – there is no better thing than a good crisis. Our business partner is a human being, and as such he or she will remember much better when you once saved his/her bud or project than the many times you added value by proactively managing risk. Sad but true.
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10. Be a trusted PARTNER
# Partnership means eye-level, and that requires gravitas. An eye-level partnership is not an easy thing to achieve, especially if your business partners are senior executives. And there are no easy ways to develop the gravitas needed to be seen as an eye-level partner by the business. Maybe this only comes with age and experience – or, indeed, never. In a way this one is the result of everything else plus the certain “it” that makes everyone feel you are in the room even if they do not see you. Inc.com has a somewhat generic but helpful essay about how to develop executive gravitas here https://www.inc.com/jim-schleckser/how-do-you-develop-executive-gravitas.html . For those who do not have the time here is a quote with the gist of it: “if you want to develop gravitas as a leader, think about focusing on traits like emotional control, maintain a calming presence, speaking in a controlled and deep voice, and dressing like you mean business. “
# Partnership sometimes requires straight talk. I once worked with a business partner who thought that our relationship was going quite well until I told him that and why it did not from my point of view. Being clear about what you expect as the basis for a good business partner relationship can be important: Things like “if you want me to help you, you need to involve me” or “legal advice is often too sensitive for it to be transported like we played ‘Chinese whisper’ in our childhood, so if you want to know something can you please ask me directly and receive my response directly and not via your assistant?” or the like.
# Partnership balances support and independence. We want to enable business and support its success. However, based on our role that is often a bit more independent than the role of other team members sometimes we also need to be the “guardian of truth” for our business partners. When nobody else dares it is on us to say that the emperor has no clothes.
Partner at Baker & McKenzie
4 年May I add a thought from the perspective of an external legal advisor. It is extremely important for us externals to have a compentent counter part on the other side, i.e. the in-house side, at least for three reasons: (1) Your superior knowledge of the business, the facts of a project?and the interests. While we always try to do our best to understand our clients' business, in-house lawyers, of course, know it much better than we ever will. The same is true for the facts and the various?interests involved.?We depend on you sharing this superior knowledge with us.?(2) Your ability to filter and strutcure?relevant information.?You would not want your external advisors to be flooded with?(potentially irrelevant) information (not only for cost reasons). Nobody?is in a better position than an in-house lawyer to distinguish legally?relevant information from legally?irrelevant information and to structure that information in a?digestable way for external advisors. Btw, there may be good reasons for not letting external advisors know everything.? Frankly speaking, we do not always want to know everything. (3)?Your ability to structure and coordinate the communication.?A good in-house?counsel identifies the relevant people from the?business unit who?should or should not be?in direct contact?with the external advisors and who external advisors should have access to. This protects your people in the company from being "harassed" by the externals and it protects the externals from being overwhelmed with inputs from all sides. (4) Your?courage to take decisions. While externals can?make?proposals and explain them, they require a strong in-house counter part who takes decisions. Experience tells me that an in-house counsel who combines these skills and capablities render the work of external advisors much more efficient, saves a lot of costs and increases the likelyhood of success enormously.?Many of the skills you mentioned are prerequisites. This is in particular true for analytical skills, project management skills, interest for products, technology and figures, and, last but not least,?pragmatism.?In my point of view, in-house counsel with such skills are indispensable for big?companies.??Best, Juergen?