GENERAL COUNSEL, CISCO
With more than 30 years working in technology, Mark Chandler shares his thoughts on disruption,
transformation through technology and legal operations; as well as the future of legal services.
GC: You have worked in the technology sector for much of your career. What are the most significant developments, in your opinion?
Mark Chandler (MC): I’ve worked in tech for 32 years. I started off working for Siemens in Germany, although not in a legal role. But as far as my legal role goes, the most fundamental shifts have been the change in the company’s expectations of the function of the legal organisation, and dealing with increased regulation. A lot of what Legal does is tied more directly into business than in earlier years. What hasn't changed, and is still pretty crucial, is that tech companies (and companies in general) during the ‘80s and ‘90s started looking to the lawyer to help provide value to the business and to customers. Providing more strategic advice is now a fundamental, core activity for in-house counsel.
The role of the legal department has changed dramatically because of the increased regulatory expectations in the US, especially since the inception of the Sarbanes-Oxley Act in 2002. There's now a much greater focus on the verification of financial results.
What hasn't changed is the need to focus on business results. The strategic engagement of the general counsel and their team can make a big difference as to how the legal team is viewed. For example, I was recently talking to the GC of a pharma company. He said that his CEO was about to give a speech but he didn't need to be there – rather, if he was on the podium, everyone would think something bad had happened! That's never an ethos I've seen in technology companies in regards to the legal role. It feels much more integrated. I like to make sure that legal operates in the background, like a good anti-virus scanning programme.
GC: Are there any non-legal skills or mindsets that you feel lawyers really need to demonstrate to be successful in the tech sector?
MC: Having not worked in any other sector, it's hard to say. For me, the most important attribute is to remember that the reason legal problems are interesting to a company is because they relate to business problems. The most fundamental role a good in-house lawyer can play is being part of the team solving a business issue. That's a distinction some outside counsel often don't appreciate. The way I put this to law students is that we shouldn't be teaching people to think like lawyers, but like clients.
I’m lecturing in a course on how you lawyer when dealing with disruptive innovation. It is not the standard case in all companies, but certainly tech companies are always looking at opportunities to disrupt: how can we change markets and win new markets? In cases of disruptive innovation where the incumbents are heavily regulated, or benefit from heavy regulation, it can produce different challenges. Our industry, the networking industry, is not heavily regulated, but at Cisco we're introducing new collaboration tools, and we have to be mindful of telecoms regulations around the world. Lawyers in tech companies have to be looking ahead of where the business is going, formulating a process and working with law-makers in trying to shape how regulations are created to foster innovation in the marketplace instead of suppressing it.
I try to look at where our business is going, not where it is. Our business is dynamic, because of the increase in cloud capabilities and the growth of new cloud-based models for consumption of IT services. For us, that means a transition, as we are moving to recurring revenue and subscription-buying rather than perpetual software licensing. Part of our legal department’s role is anticipating the changes and guessing what the world will look like if that transition happens much more quickly than expected.
In a dynamic and changing industry like tech, it is fundamentally important to anticipate and get the pieces in place before they are needed. In industries without much dynamic innovation, it's not so much of a concern. The trick is for industries going through innovation-driven change to get the hang of this.
GC: What has been the most significant way you have used technology to perform your legal function?
MC: The model I start with is to really look at who is best situated for the matter – when I should use my inside team and when to go outside. For example, with a big-ticket litigation, I will use a firm with that particular specialisation.
In every endeavour there will be the underlying theme of how to use technology to transform the service, and how to deploy the technology so that people actually want to use it.
We're using process and technology in three principal places in the legal team.
One is in contract automation – assembling templates so the legal folks in the field can choose the right legal documents very easily. The second is on the litigation side, where we use e-discovery. Thirdly, we use technology in the standardisation of documentation and for self-service tools, so people in the business can create their own documents for standard transactions, distribution agreements, NDAs and so forth, without needing to come to us.
The other key area in which we're thinking about process and technology is workflow. We now have a team in legal whose sole job is to think about these issues. Those legal operations folks are now really fundamental to enabling us to do our job in this fast-moving industry. For a legal department today (or indeed any business), the riskiest action is no action. I’ve always believed that inside lawyers have to move, and do it smart, adapting policies and processes every step of the way to what the business requirements are. I’ve tried to develop a mindset where I'll always be predicting the next changes.
That's obviously had an affect on our culture here in the legal team. People will be attracted to an environment that matches their mindset, and I’ve got a great team at Cisco based on the principle of hiring people smarter than me, who know what I don't know.
GC: What has been the most innovative way you have seen outside counsel embracing technology?
MC: Their world is being disrupted extremely quickly. Some of the large UK firms such as Allen & Overy and Clifford Chance have done really interesting work with outsourcing. Increasingly you are seeing law firms like Bryan Cave, who have hired a Chief Innovation Officer, whose role is to redesign the way they deliver services.
I think firms are recognising that what they deliver through the individual labour of lawyers is a smaller and smaller part of the total value to clients every year. If you have a team of people doing outsourced legal work, or a back office doing paralegal work, or if you have tools to allow people access to information, those are all ways of delivering value that is not tied to the hourly rate. The law firms that are going to be the most successful will be those that adapt business models to allow them to make investments away from that of professionals charging by the hour.
I think most law firms are aware of the speed of change within professional services. The accountancy firms got there first. History, culture and professional ethics (such as state Bar rules in the US), slowed the pace of change in legal services, but all that is ending very quickly.
GC: You have been called an innovator, and innovation is a term used a lot nowadays, but what does innovation look like to you?
MC: It's essentially finding better ways to do things we are already doing, delivering value, and solving problems that we didn’t know we could solve before.
Personally, part of my innovation has been creating a reward structure and incentives that have unleashed an incredibly talented team to think of new and better ways to deliver value to our company and our customers. The best thing I can do is hire people who are good, and give them tools and resources to fulfil that potential. Hiring great people and giving them the freedom to pursue making this a better place works for the good of the company, and makes the world a better place. It also works on a personal level – giving people the ability to work creatively provides a great career experience. I hope that my legacy will be for people to consider their years at Cisco to be the best years of their lives.
The legal team is essentially a flat structure, and by definition that allows for a much lower level of mediation and greater access to where fundamental strategic decisions are made. I strive to not have too many people reporting to me, but I do try and meet regularly with everyone who doesn't. The flat structure does mean there are less opportunities for promotions but we have huge numbers of rotations. So a young lawyer’s progression may not be upwards in in terms of management, but she is getting to learn something new and develop new skills. Ultimately, there's not going to be a role for everyone to move upwards and some will leave. I don't like to lose good people, but I do have a great alumni network.
GC: What might the future in-house lawyer and legal team look like, do you think?
MC: There will be a transformation of all knowledge-based industries that is driven by the ubiquity of knowledge availability. This will lead to transformation of legal, ensuring the importance of being effectively a counsellor. Legal services will be more and more automated – blockchain technology that will be revolutionary in its ability to create value in regards to sophisticated transactional structures through automation. Such technology will drive more simplification into buying, selling and contracts, meaning that legal skills will become more about business strategy.
Legal education is changing and practical skills will be more and more important. I could see US law schools moving more into an apprenticeship system, like a version of the UK system’s training contracts. The ABA [American Bar Association] has changed accreditation to allow law students on externships to be paid for their work. This means more practical education and hands on experience. We have three students a year to coming to do externships here and taking classes while we pay their tuition fees.
Technology is not just transforming the business of law. We have been supporting the ABA Center for Innovation, developing a web app that allows people who have been victimised by hate crimes get assistance and information more easily. That's just one example of legal innovation making things better in a way you might not expect.