The Scots GC debate: Force multipliers

Hamish McNicol, Legal Business: How do you build your identity and culture as a legal team? And how do you then communicate your teams’ qualities to the wider business?

Findlay Anderson, Baker Hughes Oilfield Equipment: The culture of the legal team comes from two different sources. One is the general counsel setting the rhythm for how they want their team to operate with the business. A lot of that comes down to the personality of the GC. The other factor is how the business sees its legal team: are they a hired function that sits in a corner and you call on them when you need them, or do you put them right in the middle of the decision-making of the company?

Lesley Blair, Heart of Midlothian: What we have to realise as in-house lawyers is that we are the business. Your team has to understand the business strategy because only then can you build a legal function that is going to support that strategy and if anybody in the team is not interested then they’re in the wrong place. When everybody understands what part they are playing, it makes it a lot easier to build those relationships.

Hamish McNicol: Does the success of the legal team simply echo the wider business or are there other ways of ascribing value to it?

Stephen Swan, Edinburgh Airport: The success of the legal team is shown in how they are approached and whether the business approaches them enough. One of the things I found helpful was having a team charter, which mirrored the values and vision of our business. You cannot be seen – too often at least – to be the one saying no, you want to be seen as someone that it is worthwhile getting in touch with whenever the business is starting out on something new.

David Graham, BAE Systems: If you see yourself as separate from the business and you start talking about the business as if you are not part of it, then you are playing a very dangerous game. You can only add value if you are prioritising what the business needs to be prioritised, rather than being in your ivory tower, creating policies and processes that no one is going to read or pay any attention to.

Hamish McNicol: Are there any quick and easy ways to show the business that you understand the strategy?

David Graham: I was in submarines before I joined the air sector and there was no legal team when I arrived. There was some very low-hanging fruit around, so you could add value very quickly. We had some initial resistance, but there was a chink in the door that could be opened.

‘Sometimes the difficulty is being willing to let people go to advance their career.’
Findlay Anderson, Baker Hughes

Alison Newton, Addleshaw Goddard: There is a fantastic indicator if people want your team under their cost heading because they know it will make a difference to their business. That is a badge of honour that people are fighting over you.

Hamish McNicol: When you are trying to build value and show that you understand where the business is going, how do you then say no?

Lesley Blair: When you have got a difficult message to deliver, it is all about knowing your audience. Some people like it really blunt. Some people prefer an iron fist in a velvet glove, but it is being able to say no while also working with them to find a solution. That is so important; you do not want to be known as the police.

Findlay Anderson: Our CEO has a great phrase: ‘Help us find a way to get to yes and hold us accountable along the way.’ The GC I used to sit under would talk about the job of the lawyer as being to analyse the risk, communicate the risk and partner with the business through the risk. Nine times out of ten the business will decide based on your analysis whether it wants to proceed. Your job then becomes navigating the risk in partnership with the business. One example where that has happened a number of times is under sanctions – it’s easier to say no, but sometimes it may be appropriate to say ‘yes, as long as you structure it like this’ and then partner with the business to achieve that. However, in sanctions there are some cases where we have just had to say no and educate the business. You might educate the CEO and the leadership team, but in a very big global business there are other teams all around the world who will want to progress regardless. Quite often I will draft something, give it to my CEO and get him to send that out to the business globally.

Hamish McNicol: Is there a lot of talent looking to come in-house and how do you find the right people?

Stephen Swan: I put a recruitment ad out on LinkedIn and the variety and breadth of talent that responded was extraordinary: people who had been in-house for years; people who were in completely different industries or in law firms and looking for a change; ambitious people who hadn’t been in-house and were quite early on in their career. The skillset sometimes does not matter as much as the fit. Will they be able to interact with the business in the way that you need them to?

Alison Newton: When you talk about fit, do you mean forming personal relationships with other people in the business, quiet self-assuredness, or a bravery or an energy?

Stephen Swan: Personal relationships, but also a desire to get in and about the business. One of the best questions I got asked by a candidate who eventually got the job was: ‘You are not just going to leave me to sit in an office while you are out doing all the stuff and meeting the business, are you?’ A curiosity to go and speak to the business and get involved in matters is really important.

‘As an in-house legal function you are not generating revenue, so it is about building relationships and knowing how to speak to the business in terms they understand.’
Lesley Blair, Heart of Midlothian

Hamish McNicol: How do you develop career progression pathways in what are traditionally flat structures in-house?

Lesley Blair: I went and headed up the customer complaints team, which was optimistically called ‘customer engagement’. That was amazing because I was at the coalface, so when I went back into the legal team I brought all that knowledge with me and helped to shape the team ready for where the business was going next.

Findlay Anderson: We are fortunate to have four or five different product lines around the world and for each of those product lines there is a leadership team, so I have senior lawyers sitting on each. But at the same time they are all pushing for the next level and that is a real challenge. Sometimes the difficulty is just being willing to let people go to advance their career. It needs an honest conversation.

Hamish McNicol: How will the role of the GC and the in-house lawyer evolve over the next five to ten years?

David Graham: It has evolved massively in the last 20 years. In my role probably 10% of the time I am dealing with legal issues; 90% of the time I am dealing with commercial issues, business strategy, sitting with our leadership and helping them achieve their goals, whether that is commercially or in
any other way.

Stephen Swan: There seems to be an endless stream of regulation and, at the moment, massive political and legal uncertainty as well, so the skillset of the in-house counsel is only going to become more valuable to businesses.

David Graham: We can add a huge amount of value in comparison to some other functions. Most lawyers are intelligent, committed, hardworking – and that helps because you can add value quickly. We are a force multiplier. Also for many of us, our relationships with regulators are critically important, so you are using that relationship as an enabler to do business and can argue you are not just a cost centre but a revenue generator because of the amount of money you are saving through that activity.

Alison Newton: One of our sister businesses is CDC – the Client Development Centre – and they came out with some surprising research of 200 in-house teams that was updated earlier this year. It said: ‘What is most important to you and your team?’ And the most popular response by far – 18% – was articulating value to the business. Right at the bottom was the use of AI, the use of process management and the use of technology.

Lesley Blair: It is difficult, though, as generally as an in-house legal function you are not generating revenue, so it is about knowing your audience and building those relationships, and knowing how to speak to those people in terms they understand so you can engage them. A lot of the time numbers float their boat, but that is very difficult for a legal team. What statistics are we going to use to do that? It is not rocket science; it all drills down to the fact that it is all about the people. It is all about being proactive, getting involved, finding solutions, becoming indispensable to that business and becoming part of that business.

Findlay Anderson: The fight that I often find myself having in the oil industry is that our economy is the oil price. When the oil price is down the edict comes down: ‘We want to take 20% out, 10% out, whatever it is.’ That applies right across the business and therefore you come off a phone call where you have been told you need to take 20% out. How on earth am I going to do that? For this small size of your team in comparison to the business, you do add so much value, so the fight I often have involves me saying: ‘No, I am not taking 20% out because if I do, the business is going to be massively at risk.’

Stephen Swan: It is hard to put a value on the things you have averted – the contract disputes that did not happen, the regulatory investigations that did not come.

Findlay Anderson: We had a situation that caused me to grow my team years ago, because the business was $100m down on a big contract. We fought over it for a year and spent a million dollars in legal fees. We returned $100m of value back into the business, so it was a fantastic success and that time in a career where you can show you add value. You never want to repeat that again, so I hired a lawyer who could look to drive our mitigation on those risks internally and try to avoid a repeat of those issues.

‘There is a fantastic indicator if people want your team under their cost heading because they know it will make a difference to their business. That is a badge of honour that people are fighting over you.’
Alison Newton, Addleshaw Goddard

Alison Newton: You have all talked about the importance of the style and personality of the GC in establishing the relationships, and you all have very strong personalities in your businesses. How do you get your teams to come out from behind that and create their own marks?

David Graham: You have to give them autonomy. It is a bit of a sink or swim environment, but giving people their own bailiwick with their own matters and their own work, and their own clients within the business, is absolutely critical.

Findlay Anderson: In a quarterly-driven business I find the culture can be ‘there is no room for mistakes. It is a 90-day sprint every single time. Go again and go fast’. One of the most empowering moments I experienced was when we had a new GC come into the business. He had a call with the global legal team and 12 times in the call he said: ‘I want you to know I have got your back.’ If he had said it once it was a throwaway line, but the repetition meant it was very empowering for everyone on the team.

Hamish McNicol: Twelve times is a bit much.

Findlay Anderson: It was a bit excessive.

Hamish McNicol: How are you all expecting your external providers to adapt in the future?

Stephen Swan: Unless you are in a large global business you may not be able to take advantage of some of the technology that has come along, because you do not have the repeatability or thousands of the same kind of contracts. I would like external providers to try and break down some of the new tech so it can be used in smaller chunks by smaller businesses.

David Graham: If you have made the choice to spend money on external counsel, you do not want to have to stand in the middle; you want their advice to be digestible by the business directly. The journey is already on the way, but there are still some pockets where you need an in-house lawyer to translate what the external lawyer is saying to the business.

Lesley Blair: The best relationships I have had with external firms is when I see them as an extension of my in-house team and that is when you know there has been a lot invested on both sides into making that work.

David Graham: The best relationships I have had are on some of our big-build contracts, which take about six months to negotiate. We will have our project management team, our commercial team, our legal team and then we will have our external lawyers. We are at a law firm from dawn until dusk for an extended period of time, and we work seamlessly. It is absolutely critical that you find a law firm that does that for you. LB

hamish.mcnicol@legalease.co.uk