In-house lawyers who learn to harness technology and avoid being overwhelmed are most likely to prosper, says corporate counsel Bruce Macmillan.
The book Zen and the Art of Motorcycle Maintenance explores the difference between two friends as they motorcycle across the US in 1970. One friend, the process-focused mechanic, is always listening out for odd noises from the bike and is constantly tinkering with it and worrying about it – but gets satisfaction from knowing that it is running well.
The other, the romantic, buys the best bike that they can afford (regardless of what they actually need) and rides it with great passion and no maintenance until, abruptly, it goes wrong and the disappointed romantic then needs help from others to fix it.
The author, Robert M. Pirsig, eventually realises that the most effective and enjoyable motorcycling comes from combining the romantic approach with the process-focused one – maintaining and understanding the bike well, but then as a result being able to enjoy it and use it more fully.
Many lawyers start off with a ‘romantic passion’ to be right in their legal analysis at a point in time, regardless of cost and effort. Then – ‘job done!’ – there is little interest in keeping the answer up to date, or in how it is used thereafter.
We want to use our skill and our art to know what to research, how to analyse, how to draft and how to negotiate. And we want our answer to be that bit different from our colleagues’ responses, to show that it is our unique approach that has made all the difference.
And for the genuinely unique, the novel, the ambiguous work – that 10% of our actual workload (perhaps 20% at senior level) – the ability to satisfy that passion is still there. But for the other 80%–90%? This article hopes to address how in-house lawyers can combine the romantic approach with the process-focused one, to enjoy more fully the bulk of their workload.
Expectations for in-house lawyers
Essentially, the practice of in-house law is about ensuring that business people, at the right level of seniority, are informed about and are accountable for the level of legal risk that is inherent in the commercial decisions that they are taking. This is achieved through contracts, advice and training.
A key difference between in-house team practice and private practice is that in-house law is law in a business context. It is proactive, engaged, inquisitive and, increasingly, accountable for failures to be sufficiently enquiring; and failures to be sufficiently focused in ensuring that the business has understood and engaged effectively with the advice given.
Businesses expect their legal teams to be consistent. A sensible goal for in-house teams to seek to achieve is: ‘one team, one answer, analysing law effectively in the business context, and providing answers in a form that the business can understand, accept and action’.
It is not about individual lawyers having their own interpretations of how the law applies to the business, or becoming indispensable to the business for the legal knowledge that is in their head and nowhere else (that is a ‘key person risk’ that should be avoided).
Additionally, in-house teams are more frequently being asked to be forward-looking about known and anticipated legal and regulatory change.
After all, every other department in the business has to make projections of what will happen, when it will happen and how much it will cost, in order to allow the business to build its one-, three- and five-year business plans. So why should only the legal team be exempt from this predictive work?
How have these expectations come about?
Moore’s law and the impact of technological advances
Economic conditions, business pressures and the growth of in-house lawyers to be upwards of 20% of the regulated legal professions in England and Wales have all had a large part to play. So has the evolution of laws and regulations nationally and internationally over the last 30 years, particularly given that fines and legal fees can now make a very material dent in the profitability of a company. Personal sanctions can have a similar effect on the solvency and liberty of its directors.
However, I am going to focus on another important factor. At around the same time that Pirsig was enjoying the ride to California that inspired his book, someone who was already there was founding a company (that has become rather well known) and creating a law – or, more accurately, predicting a law – that has become a self-fulfilling prophesy.
The company was Intel. Its co-founder [Gordon] Moore (pictured) came up with a law – simplistically, that advances in technology mean that processing power in computers for a given price doubles every two years – that touches every aspect of our lives, and few more so than data-heavy areas of business like law.
The most obvious effect of Moore’s law, for lawyers, is that it makes far more law knowable and potentially easy to find. Now, ignorance of the law (and of changes to it) really is no excuse. But this puts a premium on knowing what to search for, how to find it and how much trust to put in your sources: Wikipedia is fine as a resource to settle debates among friends, but BAILII is a better source of case law.
There are many other effects too which are reshaping what we do.
Actions are discoverable
Much more of what our clients do is now automated. This means that, in plain English, it is discoverable. So we have fewer excuses for not knowing what our clients are doing and what they are planning.
It also means, in the legal sense, that what our clients do is ever more discoverable. This means the in-house lawyer must become more rigorous and aware, in terms of:
- Managing litigation and regulatory discovery processes;
- The ease with which holes can be picked in defences of ‘adequate processes in place’;
- How well the records retention/deletion policy is applied in practice;
- How concepts of ‘legal holds’, subject data access requests and ‘legal privilege’ apply in an electronic cloud-based world where the ‘same’ message may be presented and held on several devices with differing storage and transmission paths over many jurisdictions.
And so on.
In short, in the same way that we all know that ‘ignorance of the law is no excuse’, ‘ignorance of how your corporate IT works is no excuse’ will become the norm. Especially in an ever more cyber-security challenged world, and one where the person that you may need to sue may actually be the outsourced provider on whom you are dependent for discovery of the things that will allow you to sue them. Scary.
A shift towards processing
With power comes process. And with processing power comes electronic process – and volume. And with process and volume come rules and the need for clear, consistent yes-or-no answers.
Processes do not discriminate, whether it be sales volumes, margins, amount of tax due, bonuses – or legal answers. All things have to be built into the process in a consistent and machine-driven way.
With this comes a challenge for lawyers: getting to those yes-or-no answers; and a risk: getting it wrong (no fudging the issue or caveats are possible in a usable process flow diagram).
But computers talk in ‘0’ and ‘1’, not ‘yes’ and ‘no’. And so do the CEO and CFO. Consequently, the world in which the in-house lawyer works is increasingly becoming a world that puts risk scores (or ‘£’ or ‘%’ scores) to legal things. In-house lawyers need to learn to ‘talk’ the ‘numerical language’ of business, finance and process. And they need to do it systematically and in a way which is consistent between lawyers in the team, between topics and over time, in order to be heard and to do legal jobs properly.
Enterprise risk management
ERM? Well, yes, ERM – enterprise risk management. With the ever-improving ability to measure and manage through computer processes and tools has come a corresponding improvement in the ability to monitor, measure and manage around risks.
In many sectors, if the business risk that the enterprise is managing materialises (and by definition risk management rather than risk elimination means that risks will sometimes materialise) then at least some of the consequences will be legal and regulatory in nature.
Consequently, as ERM processes become more sophisticated in businesses, the legal team becomes an increasingly important and visible contributor in calibrating and assessing the business’s overall risk appetite.
Of course, that is not to forget that the legal team must also measure and report on, as well as manage, its own ‘legal risks’ of:
- Poor analysis of how laws affect business plans and operations;
- Late or ineffective advice or training;
- Negligent drafting; or
- Poor conduct of a litigated or regulatory matter.
Opportunities created by technology
With all of this work also comes opportunity. While the standards expected and the volume of data to be handled are ever increasing, so are the opportunities for the strategic and thoughtful lawyer to leverage the technology and these processes to ease their task.
As with any process, you need to have clearly defined your role – what you do and do not do as a legal function. But then, so long as you remember that the purpose of your team is based on legal outputs and not on having lawyers touch everything directly, possibilities start to open up.
Developing new tools
First, the good thing about processes and electronic tools is that, if set up properly, the tools’ creator (such as the legal team) can train anyone (including clients) to use them and then check that they have done so through the electronic audit trails that these tools create.
One helpful tool for moving towards process-driven practice is the ‘rule of three’: keep an eye out for tasks that are (1) the same thing, for (2) the same group of people, for (3) the third time. If this applies to a piece of advice, drafting or negotiation, then you may be starting to see something which can be ‘safely empowered’ to clients through an audited software tool (e.g. FAQ on your intranet, basic nondisclosure agreement or contract auto-generation tool) or a manual or electronic process.
Second, what applies to your clients also applies to your team. It is ever easier to build and to maintain knowledge for your team, perform structured internet search tasks, select useful, targeted, free or paid-for updater services, and store the results in intranet shared folders.
It seems hard to justify having several members of your team repeatedly researching the same area of law in an unstructured way and, worse still, paying someone repeatedly to do it, when you can build your own simple knowledge tools – and potentially even make some of them client-facing and self-service.
Reshaping legal teams
So, in a more systems-, process- and numbers-oriented world, we have clear challenges to keep on top of technology, business process and numbers. But we also have clear opportunities to leverage this technology to illustrate to the business, in their numerical terms, the financial and risk benefits of our contribution to keeping the business safe. And we also have great opportunities to remove the drudgery and repetitive activities from our roles.
This does mean we need new skills and expertise in our teams, and probably more people with skills other than law to perform them – project managers, knowledge managers, IT people and so on. So the shape of our teams in the future is likely to be somewhat different from now. There will be fewer, but more senior, lawyers performing challenging tasks rather than repetitive ones, and people with other skills in the team.
Process-focused but passionate – the potential for a new legal harmony
Driverless cars replace many skilled (but unchallenged) drivers, in their work of repeating boring journeys. There is a small group of ‘super drivers’ who program the driverless cars and face all the challenges of dealing with new issues and approaches that may arise, to make things work. But, after they have done this, then these drivers only look for changes and differences in journeys rather than repeating the core driving task.
There are many boring repeat legal ‘journeys’ within law in-house, where the smart use of the systems and tools that are now available to us – such as contract auto-generation tools and online interactive training – allows in-house lawyers to become the ‘super-driver’ who program the tool once and then let the tool run its course multiple times without the lawyer having to repeat the task. This frees the lawyer up to do more one-off, higher-value-added, work.
So we may be coming ‘full circle’. From a 1970 motorbike to a 2015 driverless car, we will find the potential for some ‘super driver’ in-house lawyers to have the harmony of process and romance in their role by controlling the technology rather than being overwhelmed by it.
Bruce Macmillan is the director of the RPC Centre for Legal Leadership
- This is the second in a series of thought leadership articles on the in-house lawyer sector. It is an edited version of a chapter in The Future of the In-House Lawyer: The General Counsel Revolution, published by The Law Society (£79).