Handling the business
as usual.
The “business as usual” (BAU) category of activity covers
those activities which represent the organisation’s purpose, as distinct from
those activities which are necessary for but incidental to those purposes. So in the case of a retailer, the purchase
and resale of goods, and in the case of a bank, the acquisition and provision
of finance – distinguished from, for example, employment issues which are
required by each of them, but are not the things they do for a living. The distinction between the two is not hard
and fast, the difference being in the type of strategic oversight which the
general counsel should exercise over the activities comprised in each of the
categories.
Often a lawyer tasked with heading a legal team will have a
background in the law and business or operation of business as usual activity. Most IT GCs have at some time in their
careers negotiated IT contracts; most insurance GCs have a background in
insurance law. This deep domain
knowledge can be a hindrance as well as an asset to a GC, particularly one undertaking
their first leadership role. The
hindrance can arise through the temptation to get too involved in the BAU work
just because it feels familiar and therefore comfortable. Lawyers can give themselves permission to do
this kind of activity because they know what they are doing, and so can feel
they must be doing “something useful” by intervening. This can however represent a poor use of the
lawyer’s skills and experience, and inevitably does not reflect the breadth of
the role to which the GC was appointed. While
GCs here might be able to do a better job as a result of their extra experience,
excessive intervention may amount to time spent reviewing work which is already
fit for purpose, making the GC’s contribution less valuable than they may think.
There will be occasions where it makes sense for the leader
to get involved in a matter because of its significance or complexity. (And where the GC is, in effect, a one-man
band, the options for handling BAU transactions are reduced.) The “sense” however has to come from an
overall organisational perspective, and not represent the GC’s “comfort factor”
coming to the surface; nor should the GC fall into the trap of saying, or
believing, that they need to continue to get involved in advising on BAU matters
so that they retain their credibility (with their team and business colleagues
alike). However, there is no credibility
to be had for GCs in doing a job that they should not be doing.
The best value that the leader can add in this area is in using
their experience to look at BAU matters as a whole; to look for overall trends
and patterns. This a view which can be
of significant value to the organisation – it can realise significant savings
in time and cost in managing these matters, or help the organisation make a
substantial step forward in the way it approaches these matters at an
organisational as well as legal level.
These are contributions of enormous value which may not come from
anywhere else. So if there is a single
way of capturing the GC contribution when moving into the BAU arena, it is to
move away from doing the BAU, and to refocus on seeing the big pictures in BAU
activity.
Keeping the lights on
“Keeping the lights on” is a way of referring to all of an
organisation’s regular activities that are necessary for it to continue in
operation, but which are not the things that the organisation does as its main
purpose in life. They constitute a critical
facet of a legal leader’s role, which may cover a broad sweep of activities (on
a regular basis, everything that isn’t BAU).
Issues such as company secretarial (or similar constitutional reporting
and maintenance) activities, employment law advice and property transactions
are common to most organisations, but unless they develop into significant
issues with the capacity to damage or even bring about the end of the
organisation, do not have an appreciable effect on the organisation’s direction
or success. One consequence of this is
that, so long as nothing goes wrong, they have a limited profile in the
boardroom; in that respect they resemble utilities like electricity which “just
happen”. No one got hired because they
were great at ensuring the electricity supply worked, but some have been fired
for failing to ensure that it continued to work. In the same way, a GC is unlikely to prosper
simply by keeping on top of the “keeping the lights on” class of activities;
their success will be much more characterised by the strategic insight they
bring to business as usual matters and to their skill and judgment in handling
one-off issues. But if the organisation
suffers harm because the legal effort for one of these activities goes badly,
the effect for the GC can be deadly.
General counsel have to navigate between a rock and a hard
place in relation to keeping the lights on issues. The rock consists in giving these issues a
disproportionately high level of attention, often a temptation for those new to
more general legal advisory roles and for whom the issues at stake may not have
been encountered since they were training, if at all. General counsel should bear in mind that the
organisation’s profit or other success measures are unlikely to be
significantly affected by whether these issues are given five-star legal advice
or something lower. But giving them too
little attention – the hard place which opposes the rock – is to risk
under-calling issues which have the capacity to move into the “bet the company”
category. In the employment realm, say,
a grievance with the capacity to develop into industrial action or a costly or
reputation-threatening unfair dismissal claim is typical of the type of event
which has the potential to morph from an every day issue to one which dwarfs
all other of the organisation’s issues - switching off the metaphorical lights. Moreover the general counsel needs to be
alert to the particular interests of the management he or she is working
with. If the CEO is a former HR
executive, HR issues may gain a greater level of attention in the
organisation’s operation than they strictly merit – but the general counsel who
recognises this and stays on top of them will gain the ear of the CEO, and so
heightened influence, than the general counsel who plays the issue on its
strict merits.
There is no one size fits all prescription for handling
these “keeping the lights on” issues. Not
only are organisations different, but in a single organisation, different
issues may require different approaches.
However, these different approaches will usually be designed around
achieving two principal strategic aims.
These are to ensure that the level of advice applicable to day-to-day
instances is adequate and that the mechanisms for general oversight and for managing
exceptions are sufficient, clear and exercised when appropriate.
Setting up the system for undertaking the day-to-day entails
careful thought from the start (of the GC’s tenure or of the new system). The GC needs to set an approach for handling issues
within scope - whether it involves internal colleagues, external lawyers or
other resources - for getting and handling advice correctly at the start, and
then making sure that they get sufficient management information to discern
trends in these issues and early warning of exceptional items. If the system is well set up and there is a
reliable practice to deal with exceptional items, the general counsel can then
leave the system to do its work between periodic reviews.
Calibrating the point at which exceptions are identified,
and keeping the calibration under observation, is key to the success of
managing this kind of issue. Placing too
close a level of control will mean that more exceptions are identified, taking
more of the general counsel’s time away from other categories of issue and
beginning to defeat the object of handling the issues in this way. Allowing too loose a level of control means
that issues meriting the general counsel’s attention will not be identified, at
least until they have assumed too great a profile for comfort. Keeping the changing mix of resources,
experience and, often, inclination of the parties involved under periodic review
will enable the general counsel to have the best chance of calibrating the
valve marked exception to best effect.
Betting the company
“Bet the company” issues are the issues which make the
headlines. They defy general
approaches. They may sometimes have a
unique character of their own, but are also often issues which are BAU or
“keeping the lights on” issues but require special treatment because they have
or acquire a distinctive scale or character.
Most issues of true significance do not quite raise the
existential threat the description implies; they may have the capacity to
damage the organisation’s reputational or financial position appreciably, but
not to put it out of operation. These issues can, however, present an
existential threat to the GC’s career with the organisation. They can be generally positive (a
transformational acquisition – although a bad acquisition can become a very
dangerous thing very quickly), or dangerous (compliance challenges, product
recalls, high stakes litigation). They
often involve external counsel (but not always – especially in larger teams
with the capacity and capability to handle these issues internally).
In those cases which do not involve external counsel, the
general counsel must take the role of principal legal lead within the organisation.
The chief requirements of them in this situation are to be mindful of the level
of legal knowledge and experience in such a matter which is necessary; and to ensure
that the team members responsible for managing the issue on a day to day basis
feel supported without feeling the pressure of the significance of the issue. Acting as a heat shield can sometimes be the
single most significant contribution the GC can make in this kind of
situation.
However there will be other instances where the general
counsel must recognise that more specialised knowledge or experience from external
lawyers is required, and should not let personal pride, budgetary constraints
or a misplaced sense of their own role in the matter to cloud their judgment
and prevent them from appointing external counsel as promptly and as thoroughly
as the issue merits. In these cases,
general counsel must quickly make a decision as to whether they are to operate
in the first seat position – where the external lawyers provide support but the
internal team leads – or second seat position, where the external lawyers are
driving the strategic approach to the matter in hand. General counsel should always
put their organisations’ needs first when deciding which of these roles to
take; doing so will always, in the long run, be in their best interests too,
even if in the short term they have concerns that they are no longer seen to be
asserting personal influence and control over the situation. In a case where the general counsel takes
second seat and lets the law firm direct the response, they should be confident
in their own decision and not seek to control all communications between the
law firm and their colleagues as if they were some postbox. If they have chosen the law firm well, that
choice will be recognised to their credit, as will finding the most efficient
way of harmonising the legal effort with the needs of the remainder of the
organisation.
There will, in any event, be lots of other valuable
opportunities for the general counsel to add value. That might be managing the process of
securing all appropriate internal approvals for an acquisition and gathering
together market data for competition clearance matters; or keeping the
litigation strategy continually reviewed against the organisation’s operational
or business strategy. In all cases there
is a valuable role to be played acting as a bridge at a business level between
the legal matters and other operational considerations.
Whatever the situation, any matter of this significance will
be very likely to be outside the normal experience not only of the general
counsel but of all colleagues in the rest of the organisation. Freezing rabbit-like in the headlights of an
issue on account of its difficult or essential character will not do the
general counsel or the organisation any favours. Everyone involved in an issue of this nature
will be faced with their own limitations of experience or skills, so the well-advised
general counsel will, while being aware of their own limitations, recognise
that they are the person in charge and act with confidence.
As with the other two categories, each organisation brings
its own distinctive requirements which can profoundly affect the analysis and
approach. However general counsel can
find a welter of issues facing them in their roles and using a triage approach
like the one described here may provide a route to prioritising issues by the
means used to address them at a strategic level.
No comments:
Post a Comment