The Leaps and Loops of a Modern, Agile In-House Counsel
Prominent UK lawyer, Franziska, utilizes her experience as a member of Axiom’s talent bench and former divisional general counsel in a multinational corporation to explore what it takes to be a creative and forward-thinking in-house counsel in today’s legal industry.
The ever-evolving legal landscape demands that in-house counsel be not just well-versed in the law, but also creative and forward-thinking. While staying up-to-date with new judgments and legislation is crucial, it is only the tip of the iceberg for us as legal professionals. The sheer volume of legal activity can often feel overwhelming, especially with the constant stream of updates coming from entities like the EU – from the Data Act to the EU AI Act to the proposal for an AI liability directive. Add the multitude of US State privacy laws with their nuances, and the complexity of our role becomes apparent.
This uncertainty is a challenge we learn to confront early in our legal careers, honing our judgment through experience to find innovative solutions amidst inconsistencies and ambiguities. Embracing this dynamic environment and remaining agile is key to being a creative, forward-thinking, and modern in-house counsel in today's legal industry. Consider the following skills as we reflect on what it takes to handle the “leaps and loops” of today’s legal industry.
Key Skills for an In-house Counsel:
- Be the Watchful Eye: Stay up to date on new legislation and cases in your field and outside of your field.
- Be the Translator: Be ready to explain to your business partners what those changes mean for them.
- Be the Guide: Assist your company in adapting to any changes needed in a thoughtful, creative way.
- Be the Mediator: Keep both the business goals and legal needs in mind when negotiating next steps with all stakeholders.
- Be the Collaborator: Watch and learn from the leadership skills of your partners to develop your own collaboration skillset.
Interpreting Legislation through a Client-Specific Lens
Once we have determined our interpretation of the law, the next step is to ask ourselves, "What does this mean for our client? What does this mean for their bottom line?" To illustrate this point, let's examine the Court of Justice of the European Union (CJEU)'s ruling on Schufa.
In Schufa, a credit rating agency created a probabilistic analysis to predict an individual's future behavior, specifically their likelihood to repay a loan. The agency argued that they shouldn't be held responsible for the loan decisions made by their customers, the banks. However, the CJEU disagreed, considering the score as an independent decision and holding the credit rating agency accountable.
While some may question the relevance of the CJEU's decision in Schufa for those outside of the German credit rating industry, it serves as an example to highlight the importance of understanding and articulating the implications of legal decisions to our clients.
When our clients ask, "What does this mean for me?" it signals the start of applying the law and conducting internal fact-finding. Even if our client operates in a different sector and is not a German credit rating agency, they may still rely on automated decisions. As in-house lawyers, we need to delve deeper into understanding the automated inputs our client uses or produces in their decision-making processes involving individuals such as our staff, customers, or third parties. We must explore questions such as: What are these inputs? How are they generated? How significant are they in the decision-making process, and what other factors might influence the final decision? Furthermore, we need to assess the impact of these decisions on individuals.
These are the kind of inquiries that I may have shrugged off during my time in university with a generic response of "it depends on the case's facts." However, this is where the true essence of practicing law emerges. Collaborating closely with our clients, we must thoroughly understand the facts and discern whether rulings like Schufa necessitate any changes in our approach. For instance, we might need to examine how we handle data associated with our manufactured products or evaluate our cloud agreements in light of the Data Act. We also have to determine the governance measures, training initiatives, and review processes required to prepare for the AI Act.
This comprehensive analysis requires valuable interactions and exercise of judgment to reach a point where we truly comprehend the implications of regulations, judgments, or new laws for our organization. If our analysis indicates the need for change to ensure compliance, we must convince our stakeholders to allocate resources for a dedicated project. These discussions are not always straightforward. However, from a project perspective, we have only just begun gathering requirements to design the necessary actions. Implementation has not yet commenced.
It is during this phase that surprises begin to surface, including internal negotiations, stakeholder management, debates about resource allocation, and assessing the impact of the proposed changes, among others.
Managing Stakeholders, Risks, Assumptions, and Expectations
In the quest for modernization and agility, it is essential for General Counsels (GCs) to navigate the intricate landscape of managing stakeholders, risks, assumptions, and expectations. As we embark on this transformational journey, we must approach it with a discerning eye and the willingness to adapt to unexpected challenges.
At the outset, we may discover that certain assumptions we previously took for granted do not align with reality. It is crucial to collaborate with our clients and reevaluate existing processes to determine whether they can meet evolving needs. For instance, in the context of updating contracts across the organization, having a well-maintained centralized repository with up-to-date information about contracts and third parties would be highly advantageous. However, the complexities of operating across multiple jurisdictions and business divisions in large organizations may burst this rosy assumption.
Different divisions or locations may have varying systems in place, but they might not encompass the entire scope of our project or be up-to-date in specific areas. Legacy practices may function adequately, but when certain requirements exert strain on the system, limitations become evident. Moreover, factors like incomplete integration of acquisitions, regulatory restrictions mandating the separation of certain business divisions, or a company structure resembling a holding company can add further layers of complexity. Consequently, we find ourselves engaging with numerous teams and stakeholders, a process that might not have initially been factored into the resource plan and timeline.
At this juncture, trade-offs come to the forefront, necessitating discussions and negotiations about what falls within the project's scope and what warrants a separate future endeavor. Balancing the need to fix issues for the current project while considering future initiatives is often the most challenging aspect. We must navigate detours, engage in numerous conversations, and avoid succumbing to the temptation of perfection, which could impede progress.
Attempting to address everything at once, by incorporating additional tasks or goals, may risk derailing us from reaching our destination. It becomes imperative to weigh the consequences of including too much versus making significant progress. The debates surrounding what must be delayed to achieve the project's overarching objective can be arduous. Stakeholders understandably fear that delegating an item to a "phase 2" implies it may never come to fruition. Nevertheless, maneuvering around obstacles, labeling them as "later," allows us a better chance to reach our destination – the top of the hill, to complete the project on time and within budgetary constraints or close to it. At least, until we embark on the next phase of our journey.
By acknowledging the need for adaptability, skillful stakeholder management, and the willingness to make necessary trade-offs, GCs can steer their organizations toward a successful implementation of modernization initiatives in a measured and sustainable manner.
Collaboration is Key to Success
Leaps often occur when a project involves bringing together teams that don't typically collaborate. It may well be their first time working together to produce a common output. Team members start off being very willing to help, interested to meet their colleagues from similar teams in other divisions or jurisdictions with whom they’d otherwise have little opportunity to interact. Whether it is a new procurement template, a contract management system, a data processing agreement or an overall process, there will be a number of productive meetings where people happily share their skills and experiences, generously contributing and collaborating toward something better for everyone going forward.
Cross-team collaboration is often great right up until the point where a team is asked to change an item that they are so used to that they can’t see how things can be done differently – whether that is a contract template, a filing system, or just an audit clause. Some fact-finding will be needed to understand the rationale for the differences and how the new output can accommodate the concerns of all teams.
But this is where negotiations can become just as protracted and difficult as when you’re negotiating an external contract with a very determined and articulate counterparty, who at some point realises that this was at the side of their desk the whole time, and that, really, they don’t have to do anything. And then the enthusiasm flags on all sides, people stop attending meetings and the project stalls. That’s when you risk ending up on a merry-go-round of countless meetings resulting in all fifteen versions of that fraught audit clause which stays just as it was when you started. This is where you learn to appreciate the value of all those leadership lessons many of your business clients have been taught from the start.
Creativity and Innovation: A Modern In-House Counsel’s Best Tools
Managing these leaps teaches us the skills that set great in-house lawyers apart from just the good ones. The point where creativity and innovation is equally about a bright legal mind, making sense of the contradictions and ambiguities in the law, applying it to a set of facts that stubbornly refuse to fit neatly into legal categories, as it is about negotiation, leadership and the art of the possible. In the end, a good response to a regulatory requirement that is implemented as well as possible is infinitely better than a perfect response that never got off the ground.
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