GC2B participants
Following the triggering of Article 50, in-house general counsel talk about their priorities for the next calendar year, and how they are dealing with the challenges.

Lisa Mayhew, BLP: Given that 2017 is going to see even greater change and uncertainty following the triggering of Article 50, I’m sure you will have spent a lot of time planning and thinking about it. It’s unusual to have so much advance notice of seismic change. So as you plot your priorities for the next calendar year, how do you deal with that?

Lesley Smith, Columbia Threadneedle ­Investments: The unknown is the key point. When the referendum result came out we were under a lot of pressure to respond quickly and show we had been planning. The reality is we don’t know what will happen, and it affects us particularly in the asset management industry with passporting rights – it’s critical as it makes such a difference when we’re serving European customers. So we did the analy­sis on jurisdictions – do we need to move funds, set up new offices, for example? But actually, the situation is we still don’t know, so it would be rash to dive in. You have to balance the cautious approach with presenting to the business that we are on top of it.

“After the referendum result we were under pressure to respond quickly and show we had been planning, but the reality is we don’t know what will happen” Lesley Smith, Columbia Threadneedle Investments

Catrin Griffiths, The Lawyer: Would you say it’s your number one priority or is just background noise at the moment?

Lesley Smith: Background noise, definitely.

Stuart Marriner, Connect Group: The advantage we have is that we’ve got a two-year timeline and we have some time to plan, but as a company we didn’t foresee the leave vote, so we didn’t do much preparation on it.

Lucy Vernall, Funding Circle: I don’t know how much good advance planning would have done, in any case.

David Bateson, Canon Europe: In Year 2000 there was a lot of panic and planning, and it all came to nothing. I’m not saying that Brexit won’t result in changes, but it’s dangerous to over-dramatise things.

screen-shot-2017-01-13-at-14-31-00Dan Toner, Spire Healthcare: For financial services it’s key – I work in UK domestic healthcare, so it’s less of an issue. The issue for us is the macro-economic environment and the ability to recruit clinical staff. One of the things that this does make you realise as a GC or if you’re a head of legal, are the benefits sometimes of not taking action. There was, generally, a knee-jerk reaction – I scribbled something on the back of an envelope and a year later it’s corporate policy. As lawyers we have to think on our feet and our lawyers’ brains click in – but we should stop to think what does it really mean, what do we really know?

Stuart Marriner, Connect Group: We’re feeling the impact now as we’ve got a refinancing project to complete in 2017, which is impacting the rate we’ll get from lenders.

Dan Toner, Spire Healthcare: Two-thirds of what we buy in our hospitals is from out of the UK, so while our exchange rate is currently hedged, it won’t be in 18 months’ time.

We won’t actually know the outcome for a decade. That’s why GCs are valuable to the organisation – you can take a step back and look at the situation coolly.

Vicky Lockie, Pearson: It impacts different businesses differently and it depends how global you are. For Pearson it has had a positive impact because a lot of our revenues are in US dollars, so our share price went up.

On the other hand, we have a lot of businesses in growth countries that have had to deal with an economic downturn, say in Brazil, and you could argue that has more impact on our business than Brexit. Our business in the UK and the rest of Europe is less significant than our business in those growth countries.

David Bateson, Canon Europe: Most global businesses are adept at dealing with things such as political instability, exchange rate issues, sustainability, supply chain issues – these are all BAU (business as usual) for global businesses.

Lesley Smith, Columbia Threadneedle ­Investments: Yes. Brexit is not 2008 – it’s not that sort of catastrophe. It’s probably akin to a major piece of regulatory change.

Caroline Jan, Lycamobile Group: Brexit is a potential way of getting more innovation.

Russell Deards, Henry Boot: It’s a time to go back and look at the boilerplate clauses – there’s work to be done there while you’re waiting to see what are the other impacts. Going back to first principles will be really helpful.

John Mayes, Alexander Mann Solutions: On a, in-house lawyer level, we’re going to get busier because if things start to change, we’ll have knock-on changes with contracts, policies, processes and procedures to deal with. So it will end up being like the rise of compliance in banks. Recruitment, the sector I work in, is a barometer of general economic health. So after Brexit, if a bank decides it wants to relocate to Paris or London or Dublin then it will have to move people there or recruit.

Leigh Murrin, GE Capital: There has to be an obligation to give legal departments resource to monitor these changes.

Lisa Mayhew, BLP: If you’re going back to basics, looking at boilerplate clauses and so on, do you see technology as a tool to assist the BAU stuff?

Mo Ajaz, National Grid: After the Brexit decision we had some technology start-ups looking at ways to set up contract mining. I’ve heard a number of law firms talking about this too. Artificial intelligence is out there and how we exploit it is something to look at. Some of our panel firms are already providing a platform for us to do that.

David Bateson, Canon Europe: Not linked to Brexit, but when you take the issue of having to do more for less, the only way you can do it is to introduce more process into the way we do our jobs. I don’t see it being a fix for all the legal department’s needs, but it can take away the manual, time-consuming tasks.

Melanie Jordan, AIG: We’ve concentrated on building efficiency into the department, segregating work into less costly and risky work into cheaper service centres in other jurisdictions rather than being done in London.

Stuart Marriner, Connect Group: It’s not about us adopting new technology, it’s about us adapting with the business as the business ­integrates new technologies – communicating with our customers through an app rather than through print, allowing retailers to sign up online. It’s not about leading technology in our team
but helping the business work through their challenges that technology is bringing. The biggest challenge for us is standardising our processes to allow sales and field teams to go and talk to ­customers. At the moment legal is a very dependable function and you’re a victim of your own success as you see engagement of the legal team for matters that aren’t strictly legal. A salesperson will never be criticised for handing something to legal.

Leigh Murrin, GE Capital: Do you think that’s what your board and CFO want? Most boards will have a vision of what the legal department should be doing. There’s a lot of creep – lawyers are very competent, and you have to be very clear about the purpose of the legal department.

John Mayes, Alexander Mann Solutions: The flip side of this is lawyers often complain that we’re just seen as lawyers and it’s finance people who become CEOs. As lawyers we’re regarded as a safe pair of hands, not commercially minded. If people ask our opinion on things, to turn them away would do us a disservice. If they come to us for a sensible decision we should promote that a little bit.

Lucy Vernall, Funding Circle: There’s the added challenge that people in my team want to be part of the business because they find it exciting. In a small growing business, that mission creep you talk of is even bigger – I did everything when I first joined. As you build the team you’ve got to get that dividing line in there while keeping the team motivated.

Catrin Griffiths, The Lawyer: Is that something you can formulate or is it about being ­reactive?

Lucy Vernall: In a small team you’re incredibly reactive because you just have to do what comes in through the door.

Vicky Lockie, Pearson: It’s not about doing more with less, it’s working out what we should and shouldn’t be doing and working smarter. ­People come to us because we can fix things for them. But we should be a scarce, expensive resource and be deployed strategically to do things.

We have a proper grown-up conversation with the business about what they’re prepared to pay for their legal team and in return what service they get back. For lots of lawyers, we want to be liked by the business and that makes us think we have to say yes to everything. What I’m trying to do is encourage our lawyers to say no sometimes.

David Bateson, Canon Europe: I agree. ­Rather than creating a team that just does more stuff, it should be about equipping the business to make better decisions.

“Rather than creating a team that just does more stuff, it should be about equipping the business to make better decisions” David Bateson, Canon Europe

Mo Ajaz, National Grid: We ran an initiative in the UK and now in the US around asking the lawyers who is doing what, and what they can stop, start and continue doing. That’s been really beneficial for the organisation. Once lawyers are clear about what they can do, then you can sort out your processes and then bring in your technology platform. Buying technology platforms is not going to sort out your issues upstream.

Caroline Jan, Lycamobile: Something I’m trying to do at Lycamobile is to follow any new technology implemented by other departments. I want to know what it does, what’s the risk for litigation, and also understand how it works so I can follow technological developments. When you look at law firms, so many are supposed to develop innovation but how many really are?

Mo Ajaz, National Grid: The thing I’m keen on is stopping multiple products being sold to us – e-billing, matter management, timesheets, ­contract automation and so on. But in the US
and UK there are different approvals and making two different systems work is tough. If I had time I’d develop a product that cuts through all of these.

Catrin Griffiths, The Lawyer: That’s your ­resolution for 2017 right there – get a six-month sabbatical and go and develop that product.

David Bateson, Canon Europe: It’s time-­consuming to investigate various products and it’s great that you guys are dedicated to doing that, but I don’t have that resource in my team.
We’re trying to engage IT, but IT people aren’t necessarily specialised in legal technology. To get traction I’ve tried to create a project out of it, treat it as a business transformation project and ­communicate it that way – it’s amazing how much more engagement it gets.

Vicky Lockie, Pearson: You have to write the business case and you have to speak the language of business. We are not good at being numerate – you have to be prepared to go into a discussion with your finance director.

John Mayes, Alexander Mann Solutions: You can find people internally who know the language and you can ask them to champion your project because they work in innovation.

Mo Ajaz, National Grid: I would encourage any GC to look for a COO or an operations manager. It’s massive in the US and it’s bringing a lot of returns for the organisation. We spend a lot of money externally with law firms and we have big initiatives we’re involved with at the board. How do we make sure that the legal function is recognised for the value it creates?

Stuart Marriner, Connect Group: Do you time record? I’m actively considering it.

Vicky Lockie, Pearson: We don’t have time recording but we do have activity analysis. With activity analysis you can do it not in six-minute increments but you’re looking to record information and what you can do to meet the business’s needs.

Mo Ajaz, National Grid: You have to look at demand and capacity. At National Grid it’s based on hours and we’re able to say – did you know what your top ten areas of work were in the last six months and will it be the same in the future – that way if you have any special projects coming up and a finite number of people in the department you can manage it.

“There’s an issue of mission creep – 50 to 60 per cent of what we do now is not within our budgeted remit” Dan Toner, Spire Healthcare

Dan Toner, Spire Healthcare: We did activity analysis. Someone mentioned mission creep – I started off as a GC, then company secretary, then was responsible for insurance, whistleblowing. For me it’s about understanding what is core legal stuff. I’d say 50 to 60 per cent of what we do now is not within our budgeted remit. So with activity analysis I’m trying to get across the message to the team that it’s not about performance management – I know they’re doing the hours. It’s about understanding where the work goes.

Stuart Marriner, Connect Group: It’s one of the challenges we face – the legal team is always held out as a centre of excellence, but actually when it comes to getting extra resource it’s the hardest challenge because the legal team is seen as a cost centre. In contrast the comms team is bigger than the legal team and you have to ask why.

David Bateson, Canon Europe: Because they’re very good at PR!

Vicky Lockie, Pearson: Well, that’s the point. We as lawyers need to get better at selling what we’re doing to the business.

Caroline Jan, Lycamobile: In addition to my own areas of work I’m trying to show value through activity analysis – the time I spend behind the scenes talking to senior management and overcoming silos, such as talking to IT about our approach to cyber crime.

Lisa Mayhew, BLP: With all this change going on, when you look back and reflect on things it’s apparent what you’ve learned in the last year: the value of not panicking, rolling your sleeves up, introducing more process and efficiency and the need to get more numerate and get better at PR and explaining the value of what you do.

Dan Toner, Spire Healthcare: And if you’re looking at horizon-scanning, and taking a much higher-level view on where we are as a country and as a society, I do wonder whether as businesses there is something to learn from the public mood. Brexit wasn’t about Brexit, Trump wasn’t about Trump, it was about 2008 and people now feeling secure enough to kick the establishment.

What does that mean for us? If you look at management and corporate ethics, the talk is all about the Philip Greens. That potentially is a sea-change.

My business was quoted, it was private-equity owned and tax efficiency and offshore structures are in the Daily Mail every other month. The public mood is anger at people like us and businesses like ours. The lesson for me is to be cognisant of this, whether it’s a piece of law, reputation management or a tax structure.


The shape of things to come

GC2B roundtables run regularly throughout the year discussing the topics that are affecting in-house lawyers. To contribute to the debate, attend our events or just for more information, please email Emma Bower at emma.bower@centaurmedia.com