Choose one: Expediter or cat herder?
the role of the in-house counsel in corporate decision making
By Bernard K. Hooper
As in-house lawyers, we are frequently in
conversations and meetings that require more listening than
lawyering. We often ask ourselves: "Why am I here when
I could be in my office doing something really
important and why can't my clients just make a decision
and go with it?"
There are many answers. One of the more compelling is that
your business peers expect you to understand and
participate in the business. Unlike lawyers in their
more natural habitats — a law firm, a courtroom,
public service, etc. — you have chosen to take part
in a business venture that derives its revenue from
providing a good or service other than the practice of law.
Although many in-house lawyers view themselves — and
are viewed — solely as legal professionals, we are
also senior members of a management team with the
rights and responsibilities associated with that position.
Therefore, what you choose to do as in-house counsel is not
necessarily limited by your practice of law but by your
practice of leadership.
This article will discuss your opportunities to support and
shape the development of a corporate initiative. It also
will explore ways to bring your colleagues along toward your
collective objectives. This is more about your
opportunities as a member of a business team with
legal expertise than your limitations as a lawyer in a
business environment.
The typical business team often is comprised of an array of
subject-matter or operational experts who are carrying the
banner for their respective areas. Therefore, when the team
meets to discuss a corporate objective or initiative, there
may be a fundamental misalignment.
As with most teams, each individual plays a different role
and has specific and unique responsibilities and objectives.
Achieving one's specific aims is typically the basis for
establishing an individual's perspective on each strategic
decision. Fortunately, unlike the other members of the team,
the in-house counsel is not necessarily bound by functional
objectives during one of those discussions.
For example, a dialogue regarding the reduction of operating
costs and outsourcing typically involves the competing
perspectives of central management (that is, a
nonoperational policy-making function), the finance or
accounting organization, human resources and the various
operational functions that may be affected by the final
decision.
In this example, central management may be the gatekeeper
for the overall business plan of the enterprise, while
finance and accounting have responsibility for managing the
achievement of certain financial and cost-reduction
milestones. Similarly, human resources is charged with
controlling head count and benefits expenses while
operational teams throughout the organization are required
to deliver profit objectives despite changing resources,
services and personnel. Each function has a substantive
investment in the outcome.
In contrast, the in-house counsel typically — unless
the discussion is about outsourcing the legal function
— tends to have a greater investment in the legalities
of the decision-making process and much less concern about
the substantive implications of the business strategy
selected. Therefore, a lawyer's perspective in the process
of making business decisions provides an opportunity to work
toward consensus without being distracted by the need to
compromise. Further, as in-house counsel, many of your
business constituents will also view you as having little at
stake when the difficult decisions are made.
As an in-house counsel, being involved in business decisions
may be quite confusing and unnerving. Your business
constituents take these discussions very seriously and know
that there will be "winners" and
"losers." However, this playing field for an in-
house counsel may be new territory. What follow are some of
the rules of the game for the in-house counsel:
Always assess what is at stake before venturing into
the discussion. If the corporate culture or other
circumstances militate against the active role of an in-
house lawyer as a business partner, then use your better
judgment and contribute in a manner that is both appropriate
and meaningful. Understand your audience and be shrewd in
your contribution to the team. Respect the functional boundaries of the business team
and allow the business people to assume responsibility for
the decision. Each team member is aware of what they
have at stake. Contribute to the process without corrupting
the content of the discussion with uninformed opinions. The
business constituents know their responsibilities and should
perform with an appropriate level of professionalism —
if not, you have some other problems. Ultimately, it is
their business judgment and their decisions that
count. Always remember that the shareholder is your client;
the team members are your constituents and the general
counsel is your boss. Those distinctions are critical.
Business constituents can be quite demanding and
uncompromising. Learn to understand and manage their
expectations. When the business team convenes to discuss any
matter, your focus should always be on the well-being of the
client. Typically, the general counsel sets the tone for how
lawyers interact with business constituents. However, you
should establish the propriety of your role in the business
dialogue. It is your responsibility to prove your value in
that setting. Resist the urge to second guess your business
constituents regarding their areas of expertise. If a
team member's position seems inaccurate or disingenuous,
well-focused questions — without accusatory
implications — will allow others to draw their own
conclusions. Help the dialogue along so that the team may
appropriately assess the information presented and discern
whether it is credible. Otherwise, don't argue with the
data.
A lawyer's perspective in making business decisions
facilitates a leadership role in the discussion, but not
necessarily with respect to the decision. As lawyers in a
business setting, the character we display during the
process of decision making defines many of our leadership
moments. Typically, lawyers are not called on to decide a
nonlegal course of action. However, we quite easily may
assume the role of managing the process. The critical
analytical tools we use in the practice of law may also be
applied to the process of making a business decision. For
example, within the context of the business team, an in-
house counsel may consider focusing on the
following:
Support the development of a hierarchy of priorities so
that all of the team members will understand the desired
outcome. Work to include all of the team members in
defining the scope of the problem and the solution. Ask the
question, "Are we sure that A' is really more
important than B'?" Direct questions to members who
have not offered an opinion so that they will become
invested and involved in the process. Identify correlations or common themes within a
business case. If more than one person says it more than
one time, an idea may be important or bear significant
correlation to an important issue. Assist the other team members in identifying the
criteria for evaluating proposals. Distill the common
themes expressed during the discussions and support your
constituents in drawing distinctions that will lead to
logical and useful decision-making criteria. Maintain the focus on the discrete issues. Try to
focus the team on the empirical data and the actual reasons
for existing practices or policies. When an existing process
is seen as problematic, ask the question, "Are we sure
that we need to continue this practice?" Remind the
team, if appropriate, that the problematic practice could be
dealt with separately and should not necessarily corrupt the
process. Restate the objectives and conclusions of the
conversations periodically to reinforce alignment. Ask
the question, "Are we sure that this proposal
adequately addresses our concerns in light of this new
issue?"
Frequently, the role of in-house counsel may be to bring
discipline to the conversation. Your role is not necessarily
determining the objective but refining the focus of the
business team throughout the process.
Recounting the objectives or conclusions provides
significant guidance to your constituents, particularly when
the team is comprised of subject-matter or operational
experts without a well developed or broad understanding of
the processes involved. However, asking the simple questions
allows you to assume responsibility for defining terms and
developing the common language of your team's discussion.
The process of reaching consensus requires a common
understanding of the terms of the discussion. As lawyers in
a business discussion, we often are expected to ask
questions and define terms that our constituents assume
require no explanation. However, we can use this opportunity
to improve communication. Within the context of the business
team, an in-house counsel may consider the
following:
Ask the questions that others may be uncomfortable
asking. In short, ask questions about basic acronyms,
practices or cultural traditions that many may not know or
appreciate within the context of the current
situation. Translate the language of one team member into the
common language of the discussion. When appropriate,
recount or paraphrase a significant statement using the
language of the common priorities or problems recognized by
the team. Ask for the simple version of the technical
answer, if necessary. Help arrive at a consensus when points have been
discussed using different terminology or coming from
different perspectives. When someone recounts a problem
or a conclusion, direct a question regarding that matter to
someone who has not expressed an opinion, such as
"Would you add anything to that?" or "How
does that fit with your understanding or your previous
point?" The resulting conversation should clarify
distinctions and better define the collective understanding
of the team.
Communication in informal settings is also critical to the
development of consensus. Informal settings, such as pre-
meetings and breaks, are often where team members frankly
discuss their concerns and desires. In some instances, the
informal settings are the decision-making forum in which
issues and objections are addressed while the meetings serve
as the opportunity to discuss and reaffirm consensus.
As in-house counsel, participation in these informal
meetings will facilitate a better understanding of the
issues and sensitivities of the team members. Within the
context of the informal setting, an in-house counsel may
consider the following:
Assist the team members in defining their concerns and
in developing a communication plan. Ask questions to
prompt pre-meeting research that explains and illustrates
the scope and magnitude of significant issues. Ask the
question, "What others do you think should know this
information?" Review and discuss presentations and
memoranda before meetings. Use your ability to pull information from various
levels and functions within the organizations. Spur
interest in issues that would not otherwise be known or
considered by various team members of differing levels or
functions. Prompt team members to ask cross-functional
questions and to have pre-meetings with other subject-matter
experts to clarify issues. Investigate, understand and facilitate communication
within the team regarding the magnitude of the compromise
that other team members are investing in the business
strategy selected. Team meetings do not always afford
team members the opportunity to thoroughly explain the
effect of a decision on their business function. Use
informal settings for these discussions because consensus
may be easier to establish if everyone understands what the
others have at stake. Protect commercially sensitive information. Be
mindful that commercially sensitive, proprietary or
confidential information may be involved at all times and
remind your constituents that not everyone on the team is
entitled to or needs to know everything.
Communication in informal settings also encourages
relationship building and demonstrates your genuine interest
in the concerns of your business constituents. However, as
in-house counsel, you should assess and remain mindful of
attorney-client privilege with respect to these
conversations.
Further, there are often circumstances in which commercially
sensitive or confidential information may be disclosed to
you in your role as in-house counsel. Most organizations
have policies regarding the use and disclosure of this type
of information. Informal settings are often when inadvertent
or inappropriate disclosure occurs. However, informal
settings are perhaps the best opportunities to remind your
business constituents of their obligations regarding the
appropriate use and disclosure of such information.
A lawyer's role in the process of making business decisions
involves leadership, communication and analytical skills
that many in-house lawyers have developed through the
practice of law. As in-house counsel, you may venture into
the business dialogue, but be mindful that your professional
responsibility is to focus on compliance with the law and to
protect the interests of your clients (the shareholders).
You should remind the business constituents of this fact as
well and explain to them that attorney-client privilege and
policies regarding commercially sensitive or confidential
information are affected by your involvement.
Further, you should establish your own ground rules for
involvement and also respect the culture of your
organization — including the direction of the general
counsel, if any, regarding lawyers engaging in such
dialogues.
A lawyer's perspective in the process of making business
decisions facilitates a leadership role in the
discussion but not necessarily in the
decision. Notwithstanding those considerations and
your apprehensions, if any, there may be an intriguing and
challenging role for you in the conference room and your
contribution will likely be appreciated.
Hooper is director of legal affairs, Asia Pacific, at the Ford Motor Credit Company Legal Office, in Dearborn, Mich.
His e-mail is bhooper1@ford.com.
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