The New GC Toolkit in association with Reed Smith | Autumn 2018
‘A good general counsel should do three things,’ says National Grid’s Alison Kay: ‘Manage the legal requirements of the business, manage their people and manage their budget.’ But as managing the legal requirements of a large business becomes more time consuming, GCs are increasingly finding it difficult to pay adequate attention to costs and staff.
‘In-house is fighting constantly for staffing and budget against compliance, enterprise risk and other areas, and teams are stretched thin just responding to demand,’ says Leigh Dance, founder and president of ELD International. ‘The GC’s time is taken by dealing with board-level issues and often there is no second tier of in-house professionals with the time or experience to implement new technology or make the case for legal operations support.’
As a result, a growing number of GCs are delegating everything from the implementation of technology projects to management of law firms to senior legal managers. Mo Ajaz, chief counsel and group head of legal operational excellence for National Grid, was brought in by Kay in 2015 to help run the legal function like a business. It was, he says, a sign of how the in-house world needs to change.
‘Being a GC is becoming so difficult that having others take on the non-board-facing parts of the role has become increasingly important. Not only has the regulatory and board-level complexity GCs are facing grown exponentially, but the nature and complexity of things like legal technology has grown at such a speed that you can’t just dabble in it. It is becoming a full-time job to attend pitches and understand how the different offerings can support the function. Increasingly, GCs are realising there are large parts of the role that require specialist skillsets to handle.’
However, our survey of more than 300 senior counsel globally shows that change will be difficult. While 30% of GCs have already brought a head of legal operations into their legal teams and a further 13% are currently looking to do so, nearly half (46%) of all respondents said it was either quite difficult or very difficult to get investment from the business to recruit senior non-lawyers.
But, says Nassib Abou-Khalil, global head of legal and compliance for Nokia’s customer division, the pressure on legal teams to adapt will only grow stronger. ‘For a global business like Nokia that sees itself as truly borderless, it makes no sense to have a single person sitting in headquarters making all the legal decisions. Maria [Varsellona, president and chief legal officer of Nokia] deals with the board-reporting aspects while managing all the business divisions from a legal perspective, but that leaves a lot of areas open. For example, driving innovation across the legal team, looking at effective ways of outsourcing, joining staff together across borders and introducing new technologies will all be hugely important to the legal function in the coming months. You need a roadmap and the right staff to deliver on these types of projects or the function will not be able to serve the needs of the business in future.’
This type of radical restructuring may be better suited to global legal team with hundreds of lawyers, but, says Alex Smith, manager of Reed Smith’s Innovation Hub, the principles behind innovation are becoming increasingly important in-house. ‘If GCs talk about agile project management approaches it is not because they are reading management theory books but because they are sitting down with their internal innovation teams and looking at how they can work around cultural issues for the benefit of the organisation. For GCs, delegating some of the problem-solving aspects of the role is a useful way of bringing fresh views and better ideas to the table. If you have people within the team who have that curiosity and creativity then embrace them and make sure their ideas count.’
Does this mean the days of the GC as sole manager of the legal function are over? And how can GCs create a roadmap to future-proof their teams? We teamed up with Reed Smith to ask leading GCs and heads of legal operations what legal teams need to do to meet the future needs of business.
Do you currently have a head of operations for the legal team?
How easy is it to get investment from the business to recruit senior non-lawyer professionals?