Leadership | Summer 2016
I’ve been advocating for some time that the ‘Trusted Adviser’ description of in-house counsel and GCs has the potential to encourage too much detachment between those lawyers and the organisations that employ them. While there must be some level of professional detachment, I encourage proactivity, dubbing this approach the ‘Ethical Champion’ − a style more akin to an investigating magistrate than a member of the judiciary. My research at Cranfield has found that counsel who are proactive and investigative are more likely to end up in positions where they can maintain an ethical stance.
In 2012, from a combination of literature reviews, interviews and questionnaires, Cranfield’s research uncovered four different styles for carrying out the in-house role. In practice, in-house counsel can be a mix of these, but typically one type would be the more dominant. The ‘Goalkeeper’ was a reactive draftsperson, great at understanding the law, but not great at understanding the business, or being flexible. Their party trick? Doing more work every year for less. The ‘Moderator’ knew as much about the organisation as they did about the law, but they still operated at a distance and lacked the interest and dexterity to accommodate others’ wants or needs. The ‘Consultant’ was more agile, responsive and flexible – not soft but easy to respect and work with – although they could benefit from understanding, not just knowing, more about the organisation.
The most important part of how general counsel deliver the role is the character of the person doing the role.
Finally, the ‘GC as Leader’ knew the organisation as well as the Moderator, but was as adept and nimble in style and approach as the Consultant. Unsurprisingly, the highest value delivery was associated with the GC as Leader, with value delivery falling as we move backwards through the list.
While Goalkeepers were typically passive and closest to the description ‘Trusted Adviser’, the other three were more proactive. Most proactive of all were the GCs as Leader. They used their free access to marketing, sales, finance, operations, IT and so on, to have an impact on organisational outcomes, transcending detached legal guardianship. They were visible, skilful and knowledgeable caretakers of commerce, profitability, reputation, risk and many more areas of the organisation.
Rather than seeing these areas as outside their role, they viewed them as embedded within it. Because of this, they were perceived as a part of the leadership of the organisation, rather than just an organisational leader. Yet, to this day, I’ve met many more Goalkeepers than GCs as Leader. Worse, many think they are the latter when they are really the former.
But while all that is interesting, it isn’t new. Our current research is looking to understand who or what shapes the approach taken by a GC. Is it the organisation? The in-house community and culture? The line managers? Or is it the in-house lawyers themselves? Though all of these play a part, our work suggests it is largely driven by the individual lawyer and, in particular, the mindset they have about their own role. Context and knowledge certainly have a part to play, but mindset, based on values and attitudes, is what most determines how knowledge is applied.
Meet the leader
Let me illustrate the contribution of the GC as Leader with the story of Grant and Phil. Five years ago, Grant was GC in a large organisation, QV plc, and Phil was his deputy. Grant and Phil worked closely as a team. Both were adept and added much value to their organisation. For example, the commercial team was trained by the legal team in order to be more efficient and effective in constructing contracts.
This not only reduced the workload for the legal department, but led to a more skilled and confident commercial team. Better skills meant that better commercial contracts could be negotiated, and this was beneficial to the organisation as a whole. In turn, the legal team was trained by the commercial team to understand customer issues, resulting in more profit and fewer disputes.
All too often, in-house development focuses far too much on what you know. But who you are is very important indeed.
Legal also worked closely with procurement to simplify terms and conditions. Stronger relationships allowed flexible terms to operate and smooth the impact caused by peaks and troughs in QV plc’s working capital. In return, the procurement team helped the legal team to redefine the way they received external legal services.
This proactive approach extended to helping the company manage its reputation at a time when its debt was huge, and mismanaging public perceptions of this issue could have damaged the consumer brands it relied upon for success. In short, Grant and Phil quickly gained a reputation as effective and commercially-minded in-house lawyers, involved in the business and actively keeping it on track commercially as well as legally. Grant was invited to speak at lots of conferences while Phil won awards.
Then Grant and Phil left the organisation. The way things have unfolded for them and for QV since provides insight into what determines the role we play in-house, and the outcomes we deliver.
Let’s start with Grant. He moved to a more senior role in a larger plc – an even more complex organisation that is dealing with massive challenges. ‘Involved’, ‘determined’, ‘brave’, ‘strong’ and ‘strategic’ are words I’ve heard and seen written about Grant. He has worked tirelessly: first to learn, and then to educate his organisation about what the in-house team is truly capable of. He is actively reshaping the in-house team to be more proactive, commercially astute − more Ethical Champion than passive Trusted Adviser.
It has taken hard work, resilience and grit, but Grant is succeeding in influencing his environment. He’s not there yet, but all the signs are that he will get there. His reputation as a leader is growing by the day.
Phil has been no less impressive. Also now a GC, Phil quickly recognised that the first organisation he joined after QV lacked a CEO and board with the maturity needed for him to effectively function. The CEO was ineffectual, while the board was poisonously dysfunctional and inward-looking. Realising he had made a mistake, Phil made the choice to leave, knowing he could only ever be a Trusted Adviser there. For him that wasn’t enough. I admire his bravery and wisdom in recognising an unhealthy environment.
He immediately joined a company where he has the freedom and stakeholder relationships to mould a value-adding function. I met with him recently and he is also thriving. Equally determined and resolute as Grant, he is also skilled in knowing the battles he can and can’t win, so he can operate as a proactive Ethical Champion.
And what of QV plc now that Grant and Phil have left? It has a passive Trusted Adviser GC, and recently experienced a PR disaster. The scandal affected the share price, staff morale, and destroyed relationships with suppliers. Grant or Phil would never have allowed this episode to occur. And those I’ve spoken to within QV share this view.
What do these character distinctions boil down to? While stakeholders and the climate within an organisation are important in shaping the way an in-house lawyer understands and delivers their role, I’d argue that the most important part is the character of the person doing the role.
Of course, ‘character’ is rather subjective and unscientific, which is why I use ‘mindset’ to better understand and explain the differing approaches taken by those in-house. Mindset is a tool developed and owned by my fellow researcher Jane Trinder-Randle, formerly of Cranfield School of Management.
It categorises a person’s thinking model, personality, perspective and approach to knowledge into distinctive groups. While mindset is in part shaped by knowledge, it is influenced more powerfully by your perspective on the organisational world and the role you play within it. So while some knowledge can be useful, mindset determines how that knowledge will be applied.
Our current research at Cranfield uses mindsets to explore the approaches taken by those in senior in-house roles. We have found that the Goalkeeper, the Moderator, the Consultant and the GC as Leader are all associated with distinct ones. And what mindset are Grant and Phil? Just like many others who also take a GC as Leader approach with a proactive Ethical Champion style, they have one of the more strategic mindsets. This suggests it is the individual rather than the organisation that shapes the approach they take as a GC.
As well as giving some insight into the character behind how people regard and execute their in-house role, this can also feed into strategies to develop in-house lawyers to be more strategic, effective and more proactive. We can help people change what they do, as well as what they know, so that they can retain professional detachment, but be proactive as an Ethical Champion. All too often, in-house development focuses far too much on what you know. But it’s who you are that is very important indeed.
Paul Hughes is head of the Praxis Centre for Leadership Development, Cranfield School of Management.
This article first ran in The In-House Lawyer’s sister title, GC magazine.