For the new in-house counsel freshly arrived from a top-tier law firm, the future looks bright. Equipped with analytical skills hewn from a rigorous academic and practical training, the eagle eyes of a seasoned risk-spotter, and the quick wits of a problem-destroyer, new corporate counsel could be forgiven for thinking that the time is nigh to relax into the kinder work-life balance that company life promises.
But that first in-house role brings challenges that take many by surprise. New in-housers need to develop a different set of skills to manage the demands of having the client sitting outside the door.
A walking cost centre
Private practice is where the glamour is – or at least that’s how the story goes. Fancy hotels, international travel, and the unlimited budget that goes with being part of the core business. But you go in-house, and suddenly you’re an expense. One legal head in Asia laughingly recounts her first experience of post-law firm life. ‘The first day I started work, I reached my desk and I had two big screens like I had requested. But there was no keyboard, no mouse, there was nothing else on my desk!’ And she sees this as emblematic of a trend whereby many observe a sudden drop in the resources they are used to. This could be knowledge management, databases, or hands on deck. ‘And you always know to expect it, but it’s very different when you’re actually living it every day,’ she explains.
Perhaps this is down to an economy-driven approach that has crept into legal departments over recent years, impacting not only facilities, but staffing. This is certainly the view of Dennis Heidschmidt, head of commercial banking legal at ING Bank in Frankfurt. ‘The staffing used to be quite comfortable, and then about five years ago, McKinsey and other consultants discovered legal departments as cost centres which could be made leaner and more efficient.’
Yet interestingly, despite a focus on economics and metrics, the new in-houser might also be startled by lengthy meetings seemingly designed to waste time – anathema to those previously yoked to the billable hour. ‘We were sitting in rooms, listening to people speaking and giving presentations, sometimes for two to three hours on end. And I remember sitting in one of these meetings actually snapping my pencil with frustration,’ recalled one in-house counsel.
The loneliness of the corporate counsel
But having fewer pencils may be the last thing on a new in-house lawyer’s mind if they have been hired to launch a legal team. Many reported that without the moral support of a large group of law firm lawyers or a substantial in-house team, the sole company counsel can be a lonely position. A universal tip for new in-house lawyers is to not be afraid to be proactive in building a network of other in-house lawyers. Joanne Low, head of legal and compliance at Hong Kong-based private equity fund RRJ, advocates reaching out: ‘There will be someone in a similar situation who has experienced something that you’re now experiencing.’ Another Hong Kong-based fund lawyer, Kher Sheng Lee, agrees and offers this tip: ‘Even if you don’t have an established network, there’s really no law or rule against just calling people. Get a referral, get an introduction to call people if necessary – just introduce yourself.’ He to started to email other corporate counsel in his sector to make contacts. That approach has now led to a regular network which meets up to discuss legal and industry developments and provide informal support.
Taking control of your own needs is a key lesson to learn, particularly for the lone in-house counsel, or for those in smaller teams. This is crucial in an environment where being resourceful is a useful skill. ‘You have to go by yourself and try to get information,’ says Ana Carolina de Salles Freire, legal and compliance director at electricity operator AES Brasil. ‘Of course people will give attention to you, but you have to go and chase for the information, chase for the learning.’ And she knows this from personal experience: ‘After a year I became compliance director without having experience in compliance. So I did a course in compliance. So many things happened because I asked.’
Out of the comfort zone
Junior in-house lawyers need to get used to being outside their comfort zone, more senior personnel point out. It’s out of the specialist law firm milieu and into the realm of the generalist – at least in the eyes of non-lawyer colleagues, as Munich-based OSRAM senior counsel Bradley Chait discovered in his first in-house job. ‘If you’re a qualified rechtsanwalt [German lawyer], people assume that you have the skills to go to the law and find the answer to any question. You come in-house and people assume that you can do a lot more than you’ve specialised in and trained to do, and that’s quite scary,’ he admits.
‘There’s really no law or rule against just calling people. Get a referral, get an introduction.’
Kher Sheng Lee
And it’s easier said than done, especially in an environment where you might be inventing the wheel. Kher Sheng arrived during the process of starting up a fund, when the paint still smelt fresh on the walls, and found that the role involved not so much answering legal questions, but coming up with the questions in the first place. ‘You have to eat your own cooking in the sense that in a law firm you draft the response to your email and you fire that away. In a hedge fund context I have to implement the answers,’ he explains.
Our sources learned that in-house counsel need to step up and take responsibility quickly – because the role necessitates taking more decisions than a law firm associate might typically be expected to make. This means jettisoning any feelings of risk aversion left over from private practice. An unhelpful hangover from the days of being an associate is a mindset that says: ‘I’ll advise the client on the law, with caveats, and the client will then take a decision’. Because non-legal members of staff will be looking for the lawyer to input into decision-making. ‘So you need to very quickly toughen up your risk aversion feelings,’ says Bradley.
If new in-housers adopt this thinking early on it will be a blessing in disguise, in a climate where the emphasis is increasingly on where you can add value outside of the day to day expectations of the role. ‘It’s a more entrepreneurial and nimble environment,’ says Kher Sheng. ‘I’m expected to fix the problem, even if it’s not obviously a legal problem.’ He advises junior lawyers thus: ‘Be a problem-solver. You’re the troubleshooter: go fix the problem.’ Inevitably this leaves you more exposed, and this is another learning point: ‘Even if you don’t know the answer, you have to stand up and tell people how you plan to look for that answer. You can’t be a social wallflower.’
But it’s difficult to interact confidently without an overarching understanding of the roles and needs of the different stakeholders in the organisation – especially if the organisation in question is a large one, with numerous central functions contributing in mysterious and specialised ways to the business. It can be hard to get a grasp of the company workings if you’ve got your head down trying to show everyone what a great lawyer you are.
‘Be like a detective, and try to understand the strategy and mission of the company.’
Ana Carolina de Salles Freire
The bigger picture
Therein lies an important realisation that came late to many of the in-house counsel GC spoke to for this piece – often legal expertise is a given in the eyes of the business, which focuses instead on what else a lawyer can bring to the table. What’s important early on is to walk around, visit all areas of the company, and get fully on board with the values, culture, ways of doing business, and – crucially – which are the right people to talk to. ‘Be like a detective, and try to understand the strategy and mission of the company,’ advises Ana Carolina. ‘If you do that in the first six months, and know your team better, know your boss better, this is going to prepare you very well for the future.’ Dennis agrees: ‘Nowadays it’s hardly possible to move up in the hierarchy without having a sound understanding of what is going on outside the legal silo.’
Hand in hand with this guidance for a lawyer new to business is to develop a thorough knowledge of the sector they are entering, outside of the legal sphere. It’s key to do this early on, as time may be short in future. It sounds obvious, but many corporate counsel hold their hands up and admit they are lacking in this area. It can be a steep learning curve, but the pay-off is clear further down the line when an appreciation of the real-world implications may be the difference between the success or failure of legal advice. ‘Take some time to actually speak to the players who’ll be implementing the arrangements that you draft, and get a sense check on what it means,’ urges Kher Sheng. ‘A legal contract is very much like a battle plan. We all know what happens if a battle plan doesn’t stand up to scrutiny the moment the fire fight starts – so roll up your sleeves and get involved in the fire fight, or at least have a ring-side view.’
The need to develop solid commercial awareness is probably the number one tip that GC was given when quizzing corporate counsel about what they wish they’d known when they first went in-house. And it takes a number of different forms. It’s a stereotype that lawyers are not good with numbers, but perhaps the issue goes further than this. Company lawyers have to make the adjustment to a revenue-based frame of mind – the idea that every choice has a financial impact. Being able to speak to the CFO on an equal footing is an important aim for new in-housers, and there is a growing trend for lawyers to study for an MBA or a similar business qualification before making the leap into business, or even during their tenure. There is the feeling that law schools are improving their business training provision, although most agree there is some way to go in this regard.
But commercial awareness needn’t be defined as simply screwing your numbers head on. There are everyday adjustments that those new to the role can make to improve their offering to colleagues across the organisation. No one would become a lawyer in the first place if they didn’t love detail – but sometimes there can be too much of a good thing. Correct documents are expected, of course, but a side effect of a thorough understanding of the enterprise is an enhanced ability to discern the commercially important elements when marking up a document. This is certainly the view of Klaus Cannivé, general counsel EMEAA of global market research institute GfK, headquartered in Nürnberg, who advocates discarding ‘the big firm beauty stuff that the client, at the end of the day, does not really care so much about.’ This means keeping communications short where possible. ‘From your emails to the way you communicate with people, you have to keep it short and punchy and to the point,’ said Kher Sheng. Not everyone is working on a trading floor with several screens flinging information at them, but many general counsel had to learn to be concise early on. And it’s an ongoing process, Kher Sheng adds. ‘That’s something I’m always trying to improve my game on: how do I get my message across without diluting its original meaning, yet still being able to hold their attention?’ The point about not tempering the message is a pertinent one, because it illustrates the balancing act in-house counsel have to perform daily, as they walk the line between being commercial and being compliant.
‘Your team members see you as a leader, and they find you an example to follow. You have to inspire them.’
View from the top
The ability to be firm therefore is an essential skill. But many GCs we spoke to struggled initially with the pressure of being parachuted into a leadership role after being a team member in private practice. Lina María Cortés, legal director of Fresenius Medical Care in Colombia found herself in exactly this position. ‘Your team members see you as a leader, and they find you an example to follow,’ she says. ‘You have to inspire them.’
But the role is more than being a decision-maker – Dennis Heidschmidt argues that ‘you’re a legal manager, even if you don’t have any direct reports.’ A corporate counsel will be managing external counsel, but often also acts as a project manager for the different functions involved in implementing a particular commercial or legal strategy. ‘Every transaction is like a little project,’ says Dennis. The ability to interface, to manage conflict, all necessitate exemplary communication skills, and this is something private practice doesn’t always prepare lawyers for. As a law firm lawyer, ‘you are in a world where everybody has a similar background to you,’ says Lina María. The world of the corporation is much more diverse, and so a junior in-house lawyer might discover they need to work on their interpersonal skills. ‘If you want to manage a team successfully and keep colleagues happy, you should work on your strengths and weaknesses – you might become a different person, more mindful of things that you didn’t consider important before,’ says Dennis. For this reason, it can be easier to keep all the plates spinning the more senior a lawyer is before the transition. ‘I found the last three or four years of practice helped a lot more,’ says Joanne, ‘because I was dealing directly with clients, having to speak from experience as well as from legal knowledge. In that sense it helps if you are more senior because you tend to find it easier to stand your ground.’
Despite the challenges, all the in-house lawyers GC spoke to have found being in-house to be tremendously enriching. A counsel who sees the whole life cycle of a transaction has a more nuanced understanding of business and a better appreciation of the needs of a variety of stakeholders. These in turn make for more effective input to a project. Excelling in-house is about more than being an excellent lawyer – it’s about being an excellent general counsel. There are a raft of discoveries to be made and internalised in the first few months, to complement the legal talent that law school and law firms hone. That’s not the same as being the best lawyer, because as Dennis sums up, ‘the company benefits most from the most complete lawyer with the most complete set of skills. That would be my advice.’
Top five tips for new in-house counsel
- Build a detailed understanding of the sector your company operates in – beyond purely legal and regulatory requirements.
- Get to know your company – who’s who, how they work, the values and culture.
- Never be too humble to ask questions. Take control and reach out to other in-house lawyers, even beyond your sector.
- Be prepared to shoulder some risk in order to give advice that is commercial and to solve problems, even if they’re outside your comfort zone.
- Take time out to listen to the different stakeholders in the organisation, and understand their drivers.