The Lawyer’s In-house Counsel as Business Partner conference, in association with EY, raised uncomfortable issues and taboos that often receive little attention across the profession. Failure, change, mistakes, mental health.
However, these so-called problems can be precious opportunities that, if approached correctly, allow to improve performance and be better lawyers – and who knows, maybe even better humans.
The first panel of the day, which was called “When change goes wrong” and moderated by EY Riverview Law CEO Chris Price, argued that the in-house legal function has long been untouched by change happening in the wider business. But sometimes there are instances that force legal teams to step up and review how they work and think regardless of their resistance to change. “The approach today is to accept that change is scary and often doesn’t go right,” Price said. But the panel found that change can be a learning process made of two different elements: a destination and a journey to get there. “There is a need to discuss experiences of law departments going through a process of change,” he added. The important thing is making different mistakes rather than repeating them. And to learn from other people’s experiences too.
The panelists shared stories about how failure helped steer their own companies in the right direction. General counsel Simone Tudor recalled a time when her company, UK retailer Homebase, was acquired by massive Australian DIY company Bunnings. What seemed like a good strategic move later became a wake-up call for things to change. In 18 months, the company went from a profitable retailer to a loss-making one.
“It happened because the new owners did not listen to local experts and they started ripping things out internationally. If it was not done in Australia,then it was wrong. They forgot what the client wanted,” Tudor recalled. For instance, the company switched off selling online because the process was not carried out in Australia. Revenue took a massive drop. When it was sold again to private equity, there was a massive turnaround that reduced losses by £140m. The process to save and reboot the in-house function, Tudor said, started with the question: “What do we need to do to make sure business stays on plan and that we learn from the mistakes made previously?”
For a company like Uber, largely made of young employees, the urge to grow at all costs sparked dangerous consequences. The ride-hailing company underwent significant internal changes when it saw its headcount increase from 40 to over 250 people in the UK and to over 20,000 globally. There was a lot of change to manage, but Uber’s approach in its international expansion was to launch first and seek forgiveness later. As the company’s current trouble shows, it did not go well. European countries like Germany and France put Uber through a legislative ordeal, with local taxi networks blaming the startup for what drivers claimed was disloyal competition.
“We agreed we needed to change, said Matt Wilson, Uber’s associate general counsel for EMEA. Uber explored ways to work alongside cities rather than rubbing against them by dropping onto them a business model just because it worked well in the US. This was true of the legal function, too. “We would not have been successful if we only recruited US or UK qualified lawyers in places like Lagos or Dubai. So we started recruiting excellent local talent.” As of 2019, Wilson, who was Uber’s first lawyer in London, works alongside a 65-strong global of made of different expertise and based in 16 different locations. “Diversity has helped us make as good decisions as we can wherever we operate,” he added.
Similarly, GE Power’s failure to create an harmonic relationship between local action and global management became a recipe for disaster. When it opened a number of legal shared services in certain countries to mainly carry out local gas and engine deals with governments, the issue that arose was that people had a different perception of their role as in-house counsel; GE Power’s Western Europe GC Mathieu Savaris needed to make sure his team members understood they were not there to write legal opinions but to grow a business. “You need to show them that they are value-adders. I made them understand they were not working in private practice.”
While failure is a good way to adjust a wrong strategy, huge mistakes can prove costly to multinational companies. How can lawyers ensure that their company “fails fast” by spotting the syptoms of a bad situation and calling them out to make change? Justine Sacarello, head of legal delivery at Lloyds Bank, said that, lawyers should be more confident about their ability to notice those warning signs. “Change does not sit well with lawyers, but that’s what we do. We can plan for it if we spot failure quickly and engage in brave conversations with stakeholders.”
Managing digital change
The ability to manage change becomes even more vital in a digital era that is redefining the way companies work with new opportunities to foster innovation and boosting efficiency. However, the transition to new technology models presents technical challenges and regulatory risks that cannot be overlooked; and human resistance often gets in the way. John Holliday, a digital information governance consultant at Lighthouse, addressed the issue in a presentation called “Managing the risks of today’s digital era.”
He told the audience: “Humans have limited capability to embrace change and work with it. As legal professionals and regulators, you need to be open to try and explore new things and approaches.” He mentioned big projects such as data migrations into cloud-enabled systems and illustrated the toll that they can take on traditional organisations when pursued for the first time.
While people tend to associate digital change to technology implementation, CEOs should work on their workforce’s expectations and behaviour around change. “We need to be adaptable and set a cultural framework to drive change in the business,” he said, noting that you can’t pretend that older generations will think of tech the same way as Gen-Z youngsters who grew up constantly holding smartphones in their hands.
Addressing culture and behaviour is the foundation to build a compliance and data privacy strategy, assessing the legal and regulatory challenges faced by stakeholders and mitigating relevant risks. This is where in-house lawyers should step in. “The bigger challenge for GCs is to be aware of what is really working and what risks new tech introduces,” Holliday noted. “They need to spend some energy and allocate time to educate themselves; and they need to maintain the right level of technical awareness by engaging the rest of the business.”
Other panels focused on people issues such as mental health, career development and talent management. A panel called “Functioning does not mean you’re okay” became a collection of personal stories on tackling mental health issues in the workplace — and how institutional change can happen.
Joanne Theodoulou, GC at Simply Business, acknowledged the problem: “There is widespread stigma in a legal profession that praises mental prowess and being invincible. Actually, we are human. And there is a cost to this industry situation.” To fight this stigma, Herbert Smith Freehills partner Chris Parsons said, it is important to create a dialogue around it. “It is powerful to have somebody stand up and tell their story, but the most effective thing is having someone within your organisation brave enough to share their experience with co-workers,” he said.
In a panel that addressed the question “Do you really need an MBA?”, Parisha Kanani, GC at Octopus Investments, said that earning the certification helped her being more confident when sitting at management tables and talking matters that go beyond legal. However, the panelists acknowledged, pursuing an MBA still requires considerable investments and funding issues often get in the way.
Two discussions around talent management shared tips on how to build high-performing in-house teams. Rebecca Danby, assistant GC at GSK, said that lawyers coming from private practice should be taught the importance of embracing leadership, something that comes more natural to people with a commercial background. Being a good leader, BT head of legal Simon Blackwell suggested, helps facing difficult situations such as the economic downturn of Brexit. “We need to support our people when facing constant changes,” he said.
To become better leaders, the panelists encouraged the audience to analyse how other parts of the business work and what they do well and, most of all, owning up to mistakes.
Sharing faux pas with your team is the best way to cultivate a culture of openness – and the fastest way to avoid doing the same errors in the future. Joanne Theodoulou, general counsel and company secretary at Simply Business, said: “Encourage your junior lawyers to have conversations about risks and problems, allow them to have a voice. When they face a specific challenge, chances are they will remember how a colleague faced a similar situation.”
For a business that tends to always focus on hard data, technical knowledge and quantifiable elements, the conference marked a shift towards self-assessment, authenticity and openness around what makes us human: mistakes and failures. At the same time, it became a reminder of how we can become better version of ourselves: by taking the time to stop, analyse what went wrong and finding the courage to move on.
As Royal London GC Fergus Speight said in his closing remarks: “A clear need has emerged to shift attention from what is done to how it’s done.”