Opinion | 03-09-20

Going In-house: A Strategic Legal Function

Based on the article, Going In-house: A Changing Marketplace, first published in Legal Business World - 2020 here. SSQ’s expert APAC Senior Adviser Kenneth Tung explores the dynamic in-house market in the final of a series of articles. The first five editions are in SSQ’s publications archive here.

 

Toward A Strategic Legal Function

Beyond informing legal’s support to routine operations and legal process improvements, getting a handle on the enterprise business strategy, or the playbook founded on its reason for existence, will connect everyone to its longer term direction beyond the month or the next quarter.  This is especially the case during these times of accelerating changes and increasing disruptions.

 

What an enterprise does and how it accomplishes its activities to bring value in an ecosystem gives meaning to everyone in the organization working toward to same set of goals.  This also means alignment across business units verticals, between headquarters and regions/countries and the myriad personalities within.  Formulating and adjusting a strategy to navigate across the ecosystem also means coming to terms with external parties, whether in the competition with rivals, managing co-opetition with adjacent players and potential entrants, sharing risks with clients and suppliers, incentivizing employees and contractors, and balancing relationship with communities and the public sector. 

 

In short, strategy depends on alignment among stakeholders, internal as well as external.

 

Chief Relationship Officer To Advance Corporate Strategy

As it turns out, beyond the legal interpretation, issues spotting and marshaling of evidence, lawyers have been at the center of managing relationships between and among stakeholders, both natural or legal persons.  Whether in the intensely human and emotional context of criminal prosecution/defense, divorce, and estate contests or the cold calculations of financial instruments and sprawling deals between behemoths, lawyers, both the drafters and the dealmakers, have been (ahem) instrumental.

 

So too, in the journey to earn a seat at the table, not just in the C-suite but at all levels of an enterprise, it will behoove in-house lawyers to explore and internalize the strategy of the business and organization.  Some may wonder whether this is above the pay grade of most in-house lawyers, and indeed many business clients may not even understand, let alone be guided by, business and organization strategies.  But this does not mean there is none, again, especially in our times of accelerating changes.

 

The organization/business strategy also serves as the foundation of and departure point in formulating the corporate legal strategy, i.e., the legal function’s contribution to business strategy, or the business of law.  This is much more than a plan to manage external legal resources, but also drives integrating the legal function closer to the enterprise and its parts.  It also addresses the strategy for change, innovation accretive to the business (beyond cost control), and again how to align stakeholders interests.

 

A Strategy for Change

Critical to a change strategy, the in-house legal function requires team players, and not just traditional individual contributors in the past.  This is more crucial than the common and vague clients’ ask to be more commercial.  Not only does the top in-house lawyer need to earn a seat at the table in the C-suite, so do lawyers at every level and vertical of the enterprise.  It goes without saying that aligning stakeholders interests also require emotional intelligence previously not generally associated with lawyers.  As EQ is not usually casually developed as other acquisition of skills, industrial psychology assessment and some coaching will be in order.

 

In the field of coaching, a school of thoughts counsels helping people on what they can do and not be discouraged by how little or what they cannot do.  Well-rounded individuals may require less coaching and learn on their own, but no one is perfect.  Although a T (or H)-shaped lawyer is to shore up shortcomings to enable connective contributions, the legal department may not want to forego talent that fits certain niche, albeit peripheral, in-house roles such as those fulfilling strategic or operations critical expertise.

 

 

This article started with a casual survey of the common considerations for lawyers going in-house, such as compensation, fit and career development. Given the macro shifts in the legal sector which is not immune to disruptions in value propositions as in other fields, lawyers heading in-house as well as those who are already there will benefit from taking a hard look in the mirror - and ponder whether they see, and how much of, the spirit and inclinations of an industrialist or an entrepreneur.  Beyond the compensation package, this assessment will inform the decision by taking into account what each individual actually excels in and what vocations will yield the most meaning. As legal education is in its infancy in addressing the needs of the profession, much learning and training will lie ahead, but that is par for the course going forward for just about every vocation.