Sunday, 17 July 2011

No timesheets! Making the transition from private practice to in-house

Imagine yourself sitting in the double height reception of a large office building in West London. You're there for an interview, having applied for the role of "Legal Counsel, Intellectual Property". So far, the selection process has involved meetings with HR and Legal. Today, you're due to see senior business staff. You don't know it yet, but the whole process will consist of 10 meetings, including one with an "industrial psychologist" (a story for another day). 

That was me, 15 years ago. My previous meetings with HR and Legal had gone well. I didn't really know what to expect from the business leaders I was about to meet. Despite a few years in private practice, I hadn't met many people from "Marketing" or "Operations" before and I only had a hazy idea of what their jobs might involve. I should have done more research, but I was feeling pretty cocky. After all, I had a blue chip CV, with a good degree from a famous university, excellent results from the College of Law and City of London law firm experience. I thought they were lucky to have the chance to hire me and they were bound to see it the same way.

This particular company made toys, games and computer games, with a global turnover of $4B. Sitting there in reception, I saw a display of "Transformers: Robots in Disguise" behind some glass. I went upstairs for my interview and during the meeting made a flippant remark about the product. The head of marketing looked across the table at me. He didn't smile. He said “We sell more than $40M a year of that product in the UK”. I was silent. The tumbleweed blew across the office. I thought I'd lost the job and I probably nearly did. He was right to respond like that. I was applying for the role because the company was very brand driven, making it interesting for an IP lawyer. But he'd have been perfectly entitled to refuse to hire me for my arrogance and my attitude to his business.

Recently, there was an excellent post from Mark Smith on his site "The Intelligent Challenge", called "The Five Skills of Highly Effective In-House Lawyers" and you can find it here: http://bit.ly/oHBnFA.  Mark's broad ranging experience is evident in his clear summary of the skills needed by in-house lawyers. You can also find excellent writing on this topic at Paul Gilbert's site: http://www.lbcwisecounsel.com/. I've also previously posted some brief thoughts in "Name the behaviour - what makes a lawyer successful in-house?": http://bit.ly/n6TnAU

Is there anything really worth adding? Aren't we all in violent agreement with each other? Yes we are, but, looking back, I know how ill-prepared I was to make the transition from private practice to in-house. Many people I interview today are equally ill-prepared. So, there's clearly more explaining to do. For this reason, I thought it would be worth drawing out some points more fully, explaining why they matter and providing practical suggestions on how to go about implementing this advice. 

I'll assume for the purposes of this post that you want to go in-house for the right reasons - because you're interested in business and would like a new challenge. If you're suffering from the misconception that you'll work fewer hours, think again. You will likely have more control over how you spend your time in-house and you'll rid yourself of the hated timesheets. But, like any career, you'll have to work hard if you want to do well. Beyond that, I suggest there are two things you ought to consider carefully before taking an in-house role and seven things to do once you start. 

Before you go in-house

1. What kind of business are you joining? 
The phrase "in-house" is a handy way to tell you a lawyer is employed in an organisation whose primary product isn't legal services, but next to useless in every other respect. The provision of legal services is a relatively small part of the overall economy. That leaves everything else to be covered by the label "in-house". Your role is going to depend enormously on the nature of the business you join.  In my own career, I've worked in fast moving consumer goods (FMCG), biotech, pharmaceuticals and software. FMCG companies are often fashion driven, marketing led and with a time horizon of 12 months. Biotech, pharmaceuticals and software are heavily engaged in long-cycle R&D, but with very differing levels of regulation. The role of lawyers varies enormously in each of these sectors. Others, from newspapers to private equity funds are going to be equally diverse.

Practical Tips:
 (i) You need to ask what Legal does in the business you want to join. Some companies put functions like Government Affairs, Tax, Environment, Health & Safety under the remit of Legal. Make sure you're clear on the scope of the activity. (ii) Ensure you’re joining a business you’re interested in. I've spent much of my career in healthcare, a sector I find fascinating. If you aren't really interested in the business you're working in, it's going to be awfully hard going, because that's all anyone else is going to want to talk about.

2. Is the business you're joining legally astute? You want to find 
a business which is "legally astute" or at least one which aspires to be. What does this mean? In a nutshell, it means a business which understands what Legal can do for them and has integrated Legal into its decision making processes. You might think the fact that they are hiring lawyers at all guarantees this, but I don't think it's that straightforward. If you're interested in reading an academic paper to explain this concept more fully, try "Winning Legally: How Legally Astute Management Teams Can Use Law to Create and Capture Value" by Constance E. Bagle at this link: http://bit.ly/n1KF6g. If you don't have the time for that, I can illustrate the exact opposite of a legally astute business with an extract from a hilarious letter which purports to be from an executive in the oil industry in the early 20th century (but which may be a hoax):

"It seems to me from your letter as if the lawyers are a kind of department to your business. Their idea that we should be inclined to give them a fixed fee is absurd, but what astonishes me most is their proposal that you should make an arrangement by which one member of their firm should give practically his entire time to the conduct of our affairs. We would never think of such an arrangement. We do not wish a lawyer to give his entire time to our business. We have not got daily disputes, neither do we want to create them. A lawyer absolutely unfit as a business man, he is to give us advice if trouble arises and if you employ him say 6 times a year this can be considered the average maximum. I do not think that we employ a lawyer many more times and our total lawyers bill is considerably less than yours. Messrs. Rice & Lyons’ statement that at the present time the daily routine business of our Company consumes the time and efforts of one member of their firm, is a revelation to me. How can you conduct business in such a way! I hate to see a lawyer in our office, if I want him I go to his office and limit the conversation to the shortest possible period. Allowing a lawyer to be practically in daily touch with me would certainly take 90% of my time which ought to be devoted to money making and not to discussing legal squabbles or legal phraseologies.
Yours etc"

Practical Tips: (i) You need to ask about the status of the most senior lawyer in the company. Does the GC sit on the Executive Committee and are they involved in the company's decision making? (ii) Ask whether members of the Legal function sit on other key decision making bodies in the company, whatever those are called, at each level of the business? (iii) Ask about the reporting lines for Legal. Are lawyers embedded in the business or are all reporting lines within Legal? Are there multiple reporting lines? (iv) When you meet the business people, ask "what do you want from your lawyers?". The answers will be revealing on whether they are legally astute or not. If they look blankly at you, the chances are they aren't legally astute. Historically, it has been the case that US businesses are legally astute and British and European businesses are not (see my post called "If your GC reports to the CFO, your company doesn't understand what Legal does"). But that is changing.

Once you arrive in-house

It seems congratulations are in order. You've found a great job with a legally astute business. You're all signed up. What next?

1. Establish your credibility.
Before you can really advise your business colleagues, you need to persuade them that you care about the success of the business. They already care about the business, but you're a newcomer. Some of the advice you're going to need to give them will contradict what they believe is the right thing to do for the success of the business. If you're going to persuade them, they're going to need to believe you are trying to achieve the same goal they are.  

Practical Tips:
Early on, there is almost always a moment where you will be tested. You'll be put through the fire. You need to recognise this moment and rise to it. Do whatever it takes to meet this challenge, because it will often shape your career at the company. In my case, this has happened each time I've been in a new role. On one occasion, I was told by my boss, six weeks into the job: "I'm unhappy with our external counsel's strategy. We're always on the back foot. I want to get onto the front foot". I recognised that for what it was. I was responsible for the company's legal strategy, not our external lawyers. It was Friday. When I went home that night, I told my wife "I think I might fail in this job". On Saturday morning I called my boss and asked for 2 hours with him in the office on Sunday afternoon, so I could debate our legal strategy. We met, in jeans, without phones ringing. I put 10 radical ideas to him, some of them pretty extreme. We argued and reduced the list from 10 to 2. After that, he knew I cared about the business and I never had a problem giving tough advice. 

2.
 
Get organised
. In private practice, you're largely organised by the firm's incoming work. You have matters to work on and you complete timesheets to show what you've been doing. Of course you may have management responsibilities relating to your law firm or business development obligations, but delivering legal services to clients in response to demand is the basic model. If you do that in-house, you're going to fail. You'll simply be allowing other executives in the business to determine everything Legal delivers. The other people in the business aren't the only clients. The whole company is the client, including its shareholders. It's your responsibility to determine what Legal does. You wouldn't expect the head of Marketing to sit in his/her office waiting for someone to ask for "marketing advice". So why would Legal behave like that?

Practical Tips:
(i) You need operating mechanisms to manage Legal and its interactions with the business. There are only 220 working days in the year and all of them will have passed quickly without any discernable shape if you don't institute operating mechanisms. Other functions will have their own and you will need to join some of them. Some can be held annually (e.g. full review of IP), some monthly (e.g. compliance or risk reviews, business development reviews) and some weekly (e.g. sales operations). There needs to be a "shape of the year" map for Legal. (ii) When you arrive in your role, use a 30 / 60 / 90 day checklist which maps out your first six months. My own checklist gives guidance on a range of things from how fast you ought to meet all the key stakeholders (first 30 days) to when you can start thinking about objectives (not before 90 days). If you don't structure this critical early period, you won't establish yourself properly.

3. 
Learn the business.
Everyone says this. There are two reasons you need to learn the business, one noble and one selfish. The noble reason is that you won't be able to determine where to spend your time unless you understand how the business works and what it is trying to achieve. The selfish reason is that it's just more interesting if you know what's going on. When you watch sport, if you don't know the rules, it's boring. The more you understand about what you're watching, the more interesting it becomes. If you're going to enjoy your job and do well, you need to learn the business.

Practical Tips:
To learn any business properly, I recommend that in the first 60 days you ask at least five people, separately, to explain it to you. You may need to adapt this list slightly depending on the type of business. (i) A senior manager, from whom you'll be able to get a high level overview of the strategy. (ii) A finance professional, who can explain where the company makes money and where it spends money. (iii) Someone involved in "upstream" development of future products and services. (iv) Someone involved in selling the company's current products or services. (v) Someone involved in "operations" responsible for ensuring the delivery of products and services. Don’t be shy about asking questions and showing your ignorance. You have a golden opportunity to ask lots of questions early on, so don't waste it.

4.
 
Determine Priorities
. I've already covered some of this under "Get Organised". As soon as you arrive, people are going to start sending you e-mails and asking you to do things. Some of these things you need to do and some of them you need to decline to do (see "It's your job to ignore thousands of e-mails" http://bit.ly/qB2qjq). Some of the things Legal needs to deliver aren't going to asked for. Let me give you an example. When I arrived in one role, I asked to see the company's litigation tracker. There wasn't one. That's not necessarily a disaster, but it makes running the company and dealing with the auditors more difficult than it needs to be. Nobody will ask you to fix this kind of thing, but you need to anyway. There are certain things Legal should have a good grasp of in any company. How many legal entities are there? Is the company involved in any court cases? What regulators have authority over the business? Is there a repository for contracts, or at least material ones? There's a long list of hygiene items like this and it's surprising how patchy many businesses are in meeting these basic requirements.

Practical Tips: (i) 
If nobody can give you a clear picture of what the Legal function should be doing, you're going to need to speak to someone, either in your own company or in another one, to get a view on what "good" looks like. (ii) Be sure to determine what your function is not going to do. For example, in my own function, we don't do Real Estate. It's specialised and non-core for us, so we send it out.

5. 
Communicate. Many of your non-legal colleagues will only have a vague idea about what Legal does, likely influenced by watching Boston Legal, The Good Wife and Kavanagh QC. Some will be better informed, but often even their view of Legal will be limited to the part of the service they consume. For example, many people think Legal is a contract shop. Even some lawyers think this. Sure, Legal does contracts, but that's a very narrow reading. You need to communicate clearly what the function will and won't do.

Practical Tip:
One of my former colleagues was an employment lawyer in an organisation of 45,000 people. She had a team of four lawyers working for her, but with these kind of ratios, it was impossible to do everything that was asked of them. She took the approach of being very explicit, publishing a one page guide on where she and her team could add value (e.g. major reductions in force, integrating acquisitions) and where they would not (e.g. individual dismissals). If the demand you face is overwhelming, produce a one-pager like this. People are disappointed if you tell them you are going to do something and you don't do it. If you tell them up front you cannot and won't do it and explain why, they will understand.

6.
 Become a decision maker. In private practice, the mantra that "clients decide and lawyers advise", is endlessly reinforced. That's fair enough, but it doesn't work in-house, because it's an incomplete description of your responsibilities. Apart from your role as a lawyer, you'll have some kind of status as a manager. People will expect you to wield influence and make decisions commensurate with your role. On some issues, the appropriate thing for you to do will be to follow the lead of others. In other cases, your role will be to give advice. And on some issues, your role will be to lead or mandate an outcome (e.g. preventing illegal behaviour). You may find switching between these roles uncomfortable at first, but you will have to get used to it. You'd be amazed if the Finance function told you their role was to keep score for the business but not to make decisions. They see their role as shaping the business to be more effective and more profitable. Equally, Legal has a similar role. You need to get into the decision making.

Practical Tips
: (i) In each situation, ask yourself "am I responsible to lead, advise or follow here?". If the answer is lead, make that explicit to your colleagues. (ii) If you find it difficult to put yourself in an explicitly decision making role, consider using the form of words "If I were you, I would ..." This has the benefit of providing a very clear recommendation, short of a decision.

7.
 
Never back off. In private practice, if a particular client doesn't listen to you, or they are difficult or chaotic, you can always look forward to acting for someone else. In extremis, you can refuse to continue to act (subject to the rules about disengaging from clients in the middle of a matter). In-house, you are stuck with your clients. Unless you or they leave the company, you are going to have to continue to deal with them. With luck, all your colleagues are "legally astute" but in reality that's unlikely. Nevertheless, you have a responsibility to deliver your role and you have to get it done, no matter how unresponsive or ungrateful your colleagues are. For this reason, you must adopt the motto "never back off". You need to adapt what you're doing, but you still need to find a way of reaching your objectives.


Practical Tips
: All lawyers are fond of the written word and it is often an ineffective way of influencing people. Do not underestimate all the other ways of exercising influence. They may seem less substantial and effective than a memo to you, but you are not the audience for what's coming out of your mouth. Physically locating yourself with difficult client groups, seconding team members into other departments, delivering training at their offsite meetings, understanding their rituals (e.g. a team that goes to a certain pub) and joining them are all things to consider. Your job is to get close to them and influence them positively. You won't be able to do that from behind a keyboard.

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Next time, I'm going to explore career paths for in-house lawyers. In particular, I'll explain why a good understanding of risk mitigation is important if you want that promotion. The post will be called “So, you want to be a General Counsel?”