Making the Legal Department the 'Department of How'
The legal department can sometimes be seen as the "Department of No" by those in the C-Suite. They are the naysayers who throw rain on every parade, who suck the fun out of every original idea and who point out all the risks but offer no insightful paths on how to get to the reward. The mantra is often heard in the C-Suite: Don't tell me "No," show me How!
March 30, 2020 at 10:00 AM
5 minute read
The legal department can sometimes be seen as the "Department of No" by those in the C-suite. They are the naysayers who throw rain on every parade, who suck the fun out of every original idea and who point out all the risks, but offer no insightful paths on how to get to the reward. The mantra is often heard in the C-suite: Don't tell me "No," show me how!
We, as lawyers, are trained in the art of spotting the "No" in every fact pattern. But what the C-suite wants from us is not just to know what business strategies will pass legal muster, but ideas on how to work around risk to get to the same desired results. Lawyers who can temper the "No" with "No, but …" can be invaluable members of the business strategy team. It all starts with developing trust between counsel and the C-suite.
First off, the C-suite has to get in the habit of feeling comfortable of going to legal counsel at the forefront of strategy decisions. Instead of coming to legal counsel to ask for forgiveness, they should be willing to come to the legal department to ask for permission and guidance. The C-suite wants to know that request will be met with honest risk assessment and creative solutions.
While it is helpful for counsel to identify the various risks involved with potential business decisions, it is more helpful if counsel can put those risks into perspective for the management team. Speaking in percentages can be helpful. For example, informing the team that the likelihood of a claim being brought related to a particular issue is more or less than 50% can help guide a decision.
As lawyers, we may have a tendency to warn against any action that has risk associated with it. Depending upon the nature of the business and the entrepreneurial spirit of those on the team, however, members of the C-suite may be willing to accept a higher risk level to reap the potential business rewards. Be willing and able to give honest and accurate assessment of the percentage of a potential risk, not just the existence of it.
Being trusted not only for risk assessment capabilities, but also for the ability to innovate alternative, less risky approaches makes legal counsel valuable to the C-suite strategic mind. A key first step in building this trust is when the solutions counsel offer demonstrates they know the company's business, its business objectives and its risk comfort level inside and out. This intelligence is developed by making the internal connections and asking the questions necessary to get a deep understanding of the business the C-suite controls.
When counsel knows a business, knows its players, knows its objectives, and knows its risk comfort levels, they can look at the risks presented and identify workarounds to achieve stakeholders' desired results.
Some words of caution, however, in the risk assessment/alternative solution offering department: Be careful of letting strong personalities on the team pressure counsel into blessing that the company be put in a position of extreme legal risk. If counsel has deemed a course of action as excessively risky, warned against it and offered less risky solutions that being met with resistance, counsel should feel free to stand their ground as a naysayer to that course of action. If, however, the situation is not one of extreme legal risk that counsel should be willing to die on the hill for, counsel has to live with the fact that their main position on the team is one of advisor, not decision maker.
Trust that can make counsel a key part of the business strategy team is further built by being consistent in the legal advice given, as the actions the legal department blesses today set precedent for how the business operates. If the legal department learns of new facts or changes in the law that could provide a different view on advice given in the past, trust will be built by proactively reaching out to those business partners who received the prior advice, updating them on the new information and offering solutions so that any actions taken company-wide on past precedent can be adjusted.
Trust can become reliance and make legal counsel an essential part of the business strategy team also when the C-suite sees an attorney as someone who takes ownership of the questions posed to her. Instead of punting decisions to members of the legal team assigned to the relevant business unit or to outside counsel, a better course can be to act as the client manager and take ownership of the legal issue.
By staying at the forefront and being hands on in making sure the question gets answered fully and timely and is personally delivered to the client, counsel will be seen as being a key part of the team and vested in the solution and outcome. Likewise, in-house counsel will be viewed as having more value to the executive team if they are able to provide legal opinions and guidance quickly and insightfully, without the need to go to outside counsel first.
In-house lawyers are uniquely suited to be invaluable to the C-suite's strategic decisions. Counsel are well educated in spotting risks and developing arguments and legal strategies around those risks. Their inquisitive and curious nature in learning the intricacies of the law and every set of facts serves them well in becoming subject matter experts on the business of the business. With a mindset toward solving, not just spotting issues, members of the C-suite can see legal counsel as key advisors in the strategic decisions of the company.
Tammy S. Wood is a Partner and Chair of the Litigation Section at Bell Nunnally & Martin in Dallas. She can be reached at [email protected], or via the firm's website: bellnunnally.com.
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