2021 Retrospective: How four modern GC face today’s challenges
- 1. Section 1: Small business lawyers need to cover multiple areas of law
- 2. SECTION 2: In-house counsel must understand and align with other functions
- 3. SECTION 3: Legal departments are under constant pressure to deliver more with less
- 4. Section 4: Legal departments face unprecedented disruptions
- 5. Section 5: Lawyers face new challenges arising from political tensions and social unrest
- 6. Conclusion: How to handle challenges in 2022
Small and medium-sized businesses make up 99.9% of all U.S. businesses and these organizations often depend on a solo general counsel (GC) or small team of lawyers to serve as trusted advisers on all things legal at local, state, national, and international levels. In-house lawyers are also frequently called upon to support business growth, for which they usually need to stretch outside their areas of training and expertise.
In short, modern general counsel frequently need to be more than just lawyers — they must also be business strategists and advisors. Over the last 18 months, that’s been truer than ever as an unprecedented barrage of societal issues have challenged businesses to change their operations and confront new legal questions.
As this retrospective shows, some in-house lawyers are handling this unusual and challenging situation extremely well. In “2021 retrospective: How general counsel are rising to meet pandemic-era challenges,” we laid out a high-level overview of five challenges described in an earlier white paper. Here we offer personal insights from five in-house lawyers across businesses and industries about how they deal with similar issues.
Their observations first appeared in another previously published white paper, “Managing a never-ending, ever-changing workload.” Following are some highlights from their reflections.
Section 1: Small business lawyers need to cover multiple areas of law
Modern general counsel for small businesses must be able to tackle almost any legal topic with aplomb, regardless of whether they’ve received training or had experience in that area. On any given day, general counsel may work in areas of the law as diverse as corporate governance, insurance law, employment law, litigation, mergers and acquisitions, trademark law, and real estate law, to name a few.
Michelle Fang, chief legal officer for car-sharing company Turo, recounts how, when she started in her role six years ago, she was the only lawyer on staff and faced a dizzying array of legal issues: “I was the commercial lawyer, the privacy lawyer, the corporate lawyer, the litigator, the paralegal, the employment lawyer — everything.”
It was that way from the very start. “I walked through the door — largely with a litigation, trademark, and generalist background — and one of the first things they asked me to do was create a Delaware corporation to hold a captive insurance cell,” she remembers. She hit the books to figure out how to do it, relying on her research chops to get her through the first months of the job.
This is a common experience for lawyers at small companies: You’re responsible for everything from drafting contracts to dealing with insurance to researching regulatory matters. Fang quickly realized there was no way to stay abreast of all those requirements and she hired outside counsel to supplement her efforts. After three years of working this way, she hired another in-house litigator. She now manages a team of 17 people.
“My background was in litigation,” she says, “So I deferred hiring a litigator for quite a long time, but as our company and its litigation portfolio grew, I could have spent my full-time job managing litigation and overseeing outside counsel.”
Like Fang, other in-house lawyers for small businesses need to know when it makes sense to stop being the single legal mind overseeing every area of law for their company. Getting up to speed in some areas may be so time consuming that it’s practical to delegate some of those tasks to outside counsel.
In other cases, hiring a paralegal or other assistant can enable a general counsel to accomplish exponentially more. But as the business grows, the time comes when being a department of one no longer makes sense and in-house lawyers must be prepared to argue for new hires.
SECTION 2: In-house counsel must understand and align with other functions
In addition to being able to work in any area of law, modern general counsel need to become comfortable playing a role in a vast range of other business functions, from audit to executive management to human resources to media relations.
In many cases, in-house lawyers are expected to serve as strategic business advisors to executives, who look to them for perspective on how risk and regulatory trends might affect business growth. These nonlegal capabilities are becoming essential to the general counsel’s success in modern business.
“On a typical day, I’ll work on some litigation and then interact with the COO, then do some transactional work,” says Troy Roberts, chief legal counsel for Charles Kirkland Companies. “What’s great about this position is that it’s interesting work, it’s varied, and I can spend a lot of time learning new things.”
But it can also be stressful, requiring robust interpersonal skills as well as business and financial acumen. According to the Delta Lawyer Competency Model, in addition to diverse legal knowledge and skills, lawyers need personal effectiveness, including an entrepreneurial mindset and adaptability. They also need business and operations competencies, particularly knowledge of business fundamentals and project management.
“Adapting for 21st Century Success: The Delta Lawyer Competency Model“ describes the importance of emotional intelligence for lawyers these days:
Along with increased “soft” skills that help counsel collaborate across functional areas, lawyers need some hard business knowledge and skills that can help them bring value to the C-suite.
SECTION 3: Legal departments are under constant pressure to deliver more with less
The coronavirus pandemic turned up the heat on general counsel, with 58% of corporate law departments seeing a rise in workload in 2020 and 30% having budgets cut. The pandemic provoked new, sometimes difficult and complex questions for in-house lawyers, who had to spend more of their time addressing these concerns. They have had to ponder a range of issues caused by the pandemic, from supply chain resilience to worker safety to terms and locus of employment.
This need made it more important than ever for general counsel to show their value to their companies. Chris Young, general counsel for Ironclad, Inc., found that one way of doing so was to embrace technology, which can help lawyers work more efficiently — allowing them to, in fact, do more with less. The Ironclad legal team uses technology to automate administrative tasks, freeing them to concentrate on legal work.
“Data is our friend and we as an industry have only just begun to re-embrace it,” says Young. “I’m excited to see how much easier our lives will become as in-house counsel when leveraging data is the norm for every company.”
Young notes that general counsel often struggle to prove their value. If you’re avoiding risk for the company, you can only show that by discussing your accomplishments in the negative — that is, showing what would have happened if company leaders didn’t take your advice. Data can help make this case, showing the executive office that you are indeed providing significant value, even with diminished resources.
“I make sure [C-suite leaders] are aware of issues that affect the business and what we can do to make it better,” says Young. “The minute that you can rise up from being just the protector and the risk manager to someone who’s armed with data, you can start to really emerge as not just a legal leader, but also a business leader.”
When you make the value you provide clearly visible to executive leadership, you’re in a much stronger position, not only to expand your team but also to become a prominent voice in business decision making. Being forced to do more with less can press you to attend to what’s most important in your role as chief risk mitigator and business driver.
Section 4: Legal departments face unprecedented disruptions
In-house lawyers have long seen risk mitigation as their top priority and that becomes increasingly the case as new crises and legal conundrums arise. In particular, COVID-19 has been a major disruption to businesses and has presented many challenges to legal teams.
Other influences, such as climate change and shifts in tax law, have also made the work of risk mitigation more difficult. A number of Biden administration executive orders on climate, energy, and environmental issues all but guarantee that these issues will be discussed in boardrooms in the coming months and years.
Meanwhile, the fast-changing technology landscape and the new tech-enabled ways of working prompted by the pandemic are presenting their own layers of risk for lawyers to manage. Data from the Association of Corporate Counsel shows that 60% of chief legal officers believe that industry-specific regulations, data protection requirements, and privacy rules are probably going to be important in upcoming years. Changing laws around digital privacy and security are of particular concern.
For example, the California Consumer Privacy Act of 2018 (CCPA) gives California consumers new privacy rights and the General Data Protection Regulation (GDPR) coordinates robust privacy laws across Europe. General counsel must be familiar with these and other regulations that may apply to their company’s digital communications and data governance.
“The thing that keeps every technology-focused general counsel and chief legal officer up at night is privacy and security,” says Irene Liu, chief legal officer of Hopin, a proprietary video teleconferencing platform. “Most companies want to do the right thing, but it is a challenge to stay abreast of all of these evolving laws and yet remain nimble as a business.”
Helping a business stay nimble means that its general counsel must be consistently well informed about the latest developments in these and other areas so they can properly advise company leaders about the legal ramifications of business decisions.
“Guiding the CEO and the business and helping them navigate the potential land mines is the most important role of the general counsel,” says Liu.
While no lawyer has a crystal ball, maintaining the ability to react quickly and access dependable information will make all the difference in adding value to your company.
Section 5: Lawyers face new challenges arising from political tensions and social unrest
In a time of social upheaval and political tension, companies face increased pressure from a range of stakeholders to develop, implement, and follow robust corporate social responsibility (CSR) initiatives. Movements like #MeToo and Black Lives Matter have reverberated through the corporate world, raising questions and concerns for businesses inside their companies or at large, as leaders. This turbulence increases urgency within companies to find ways to skillfully navigate these waters of social change.
For legal counsel, a major challenge in this situation is the uncertainty that social and political changes introduce. Novel legal questions or unprecedented business situations are becoming more common. Businesses must make strategic decisions in an environment in which the right course of action and the amount of risk each action entails are obscure. Lawyers for small business must figure out how to make informed judgements about risk in these ambiguous situations.
“For gray areas, I like to consult two to three external counsels and experts — people that I know have varied risk tolerances,” says Liu. “I want to talk to the one that’s most conservative, the one that might be business oriented, and the one that’s probably willing to accept more risk and go further. Having the range of perspectives allows me to be able to respond to business needs and fully understand the impact of our decisions.”
In addition, says Liu, general counsel must be most attuned to the executive team’s perspective and risk tolerance when it comes to advising in the face of social change. “You need to closely align with the CEO to understand their risk appetite and to try to shift in that direction with them.”
Conclusion: How to handle challenges in 2022
General counsel have their work cut out for them these days. They’re facing larger demands with lower budgets. They must be able to work in any area of law and serve as business advisors, too. They must contend with the effects of social upheaval, helping their executives assess risk in new and confusing circumstances. It’s safe to say that lawyers for small business have never been more tested — and that will continue into 2022.
The four general counsel we’ve quoted here and in the “Managing a never-ending, ever-changing workload” white paper created a wish list for the six things they need the most to help them navigate their jobs. These are:
- Paralegals and other assistants to help with administrative work
- More data and metrics to justify headcount and resourcing
- Experienced external counsel who need little ramp-up time or support
- A contract management system applied consistently across the business
- Technologies to automate billing and other time-consuming tasks
- Ready access to newsletters, trainings, and other resources to stay abreast of new legal developments
One of the easiest of these requests to accommodate is the final one on the list — ready access to timely and valuable information. And one of the best sources of reputable information and analysis is Thomson Reuters Practical Law, a compendium of 70,000 resources across 16 practice areas managed by 300+ full-time attorney editors. There’s a reason why more than 2,000 law departments use Practical Law to help them navigate their profession in these changing and challenging times.
Useful tools like Practical Law can be the difference between general counsel that is overwhelmed by the demands of the day and the lawyer who can hop from topic to topic with confidence. Quickly finding the right resources to support the complex legal work at hand is one of the most important skills general counsel can cultivate to tackle all the challenges that come their way.