This article is written by Pooja Bedi, an in-house counsel with over 19 years of experience. She has acted as Director Legal at Juul Labs, and senior in-house counsel at large global MNCs like AB InBev and Pernod Ricard. We decided to share this all with you, because this is the best thing I have read in a while about the role of in-house counsels in a business. Whether you are an in-house counsel, or if you want large companies to be your clients and want a better understanding of those who make the buying decision, then read on. You will get a fantastic perspective on how in-house counsels add value. 

We, in-house General Counsel (GC) owe it to the brilliance and expertise of our predecessors who earned us the coveted ‘seat at the table’ in boardrooms and management teams through decades of their hard work. 

I can only imagine the perseverance and grit it would have taken when most managers thought that a legal department is just that office down the hall where they go to keep out of trouble or to get a binding contract only.

Lawyers were to be avoided within organisations, they were not trusted advisors or partners back then. We have come a long way from there.

We must also thank the Boards and the CEOs for appreciating and understanding that there are legal dimensions to the business and they, like Sales or Marketing functions, need to be managed. 

They now recognize that the law is often not all black or white, requires interpretation and more often than not involves moral and ethical considerations that decisively influence how it is applied. 

As a result, the management teams today do not rely purely on technical legal advice and try to find lawyers with wisdom and the courage to be part of their group. 

Many forward looking businesses proactively encourage general managers to bring counsel early in the decision-making cycle and not wait until the last minute to fight a fire that has already started or to bless a deal that has already been struck. 

Today, most companies have a  GC or chief legal officer—one person either in-house or in an external firm who oversees the legal functions and reports directly to the CEO. In many cases, the GC/chief legal officer is a member of the top management team who is expected to weigh in on all issues, not just represent the legal function.

Job half-done, right! 

But what are we doing with that ‘seat at the table’? 

Ironically, the processes through which corporate inhouse legal departments provide competitive advantage remain poorly understood. There is a recognition of the need to incorporate legal considerations into top-level business decision making, but all too often managers still view the law as a constraint on managerial decisions, primarily perceiving it as an issue of cost, delays and burden of compliance inevitably forsaking strategic opportunities. 

The modern GC’s still have a long way to go when establishing their value proposition or to challenge the ‘cost centre’ perception problem. 

The root of the problem could be that not every lawyer understands the broader business objectives or has the aptitude to put ‘business first’ and then design a corporate legal strategy around it. 

This problem is further compounded by organizations who consciously or otherwise restrict free flow of legal and business information to and from managers, not helping lawyers have the context in which a decision is being made and the competing considerations. 

This lack of alignment on objectives results in lack of trust and loss of opportunity to create and capture value when the managers and lawyers could work as partners both to craft the objectives and to devise the means of accomplishing them.

What NOT to do when you have the ‘seat at the table’ ?

• Present the law as an unwelcome but mandatory constraint on business activities and accepting a manager’s view of compliance mainly as a cost that needs to be minimized. From this vantage point, the law is viewed primarily as inflexible — radically imposed rules that cannot be changed or adapted to suit a particular corporate strategy. Consequently, managers then do not believe that they can use the law to further their business goals, and legal counsel acts primarily as a watchdog that polices corporate conduct for illegal activity. Legal departments in such organizations are seen as little more than administrative cost centres that are necessary to comply with the legal requirements of running the existing business.
• Help executives make the conscious choice to disregard or remain wilfully blind to the legal consequences of their company’s actions. Subscribing to a view that the law presents an obstacle to their desired business goals or they might gain knowledge of the law only so that they can circumvent it to achieve a desired objective. Passively endorsing that the role of legal counsel is typically defensive — helping to fend off investigations and lawsuits. When GC’s take a reactive approach to problem solving or restrict their value proposition to saving financial or other liabilities, they squarely under-utilize the seat earned at that table. 
• Not asking enough questions – Do you have a clear sense of your company’s strategic outlook for the next five years? How can the legal department help shape and contribute to that vision and make it a reality? How can you add value to the company, the company’s business units and create value for shareholders? Do you have a clear sense of how your organization and its competitors actually make money? Who are your customers and what exactly are they looking for? How can you simplify all legal processes that touch both customers and suppliers to ensure that the business runs more efficiently? How well do you know the market that your business operates in? How does what you’re doing positively or negatively impact revenue and growth?

• Not recognising the enabling aspects of law and the competitive value of compliance. Not all regulation is bad. I have worked for companies that are heavily regulated. Most people don’t see it this way but there is some benefit to regulation in that the business is stable and predictable if you know how to use the regulations to your business advantage. Also, not participating in shaping the regulatory landscape and anticipating changes in order to survive them is one of our biggest blind-spot. Most lawyers do not prioritize working with the business to devise a long-term business and legal strategy to prepare for a changed world and to advocate for “business friendly regulations” with our regulators.  Not only will this help the overall industry and category to evolve, it serves as a distinct competitive advantage from the start when you compete in the new environment.  A number of competitors will be  blindsided by your strategy and equally unprepared for the new dynamics. 
• Communicating in legalese– there is one basic principle to ‘rule of law’ – and it’s simply this – “I will follow what I understand”. This means ditching the complicated and flowery language many lawyers love to use (both when talking and when writing).  Do you keep things simple to get to the point quickly, use visuals and graphs, and do you back up your thinking with numbers? Most importantly, are you practical?  Blame it on several years of ‘worst case’ scenario education, lawyers can easily lose sight of what is doable and what is most likely to happen and can remain stuck with improbable or impossible scenarios. The truth is that the sky is rarely falling, and resources are not unlimited therefore to be a strategic lawyer is to apply common sense and present the problem like a business-person rather than a lawyer. If you want the business to think of you as more than a lawyer, then figure out how best to communicate with them. 
• Not building genuine partnerships or relationships with peers in other functions– I can write a complicated and long contract but if it delays the negotiation cycle and lengthens a sales process, is it effective ? Often lawyers love to be the experts and end up working in silos, not appreciating enough the negative impact on customer relationships, retention and service, ultimately hurting the bottom line with their bureaucratic style coupled with legal complexity. What would your CMO or CFO prefer – perhaps a more readable and easier to negotiate contract? Once you give them that, would they be more willing to incorporate the additional compliance checklist that you want to implement across the business for better visibility because you have saved them time, their relationship with the customer or the headache of negotiations?
• Be penny-wise and pound foolish just because you feel the crunch to cut expenses. It is understood that financial resources will always be limited but are needed to defend the company, but a squeeze on budgets should not motivate taking short-cuts or risks that may become indefensible or cost the company more in the long term. It is more important to keep asking the question on what value your company will get out of every dollar spent instead of just counting how much you’ll have to put into it. Another interesting trend that I notice is that some in-house lawyers remain obsessed with tech projects that might save lawyers a bit of time and stress instead of overseeing the bigger risks that businesses face. Please remember that the board does not care how many contracts we have under review but the board definitely cares that we don’t kill a customer or a colleague. Efficiency is relative when posed with an existential threat. 
• Be a lawyer that’s eager to litigate at the drop of a hat – Litigation is time consuming and expensive when it comes to Indian courts. That said, it is something an in-house counsel will have to deal with on a day to day basis. The “legal” thing to do is to defend or solve each dispute as quickly and cheaply as possible. The “strategic” thing to do is to try to figure out what drives that lawsuit and whether there is a way to reduce or eliminate that lawsuit. Excessive litigation may help you keep the job longer but drains limited corporate resources and distracts the business. Knowing when to go beyond the tactical and use litigation as a strategic weapon or using a lawsuit as an effective hammer to leverage in a negotiation is a skill that every lawyer must invest to learn. 
• Not planning long term – whether it is about identifying your successor, staff transitions and varying level of resources or the overall corporate legal strategy, not taking a long view erodes confidence in your contribution towards business goals. More importantly, choosing to ignore knowledge transfer to other lawyers who may find themselves in an industry where they have not had much prior experience is the biggest disservice to the organisation and the profession. It is imperative for the GC’s to design their legal departments to shape the legal environment in order to secure long-term competitive advantage. 
• Lastly, not being adept at asserting the value we bring to the business, whether due to lack of confidence or will and failure to do the work required to measure the value preserved and value created, often not even differentiating between the two. The onus is on you on how effectively you demonstrate that in-house legal departments can be more than just cost centres and they can be powerful instruments for generating value and securing competitive advantage. Quantify results as much as possible, assign value to qualitative results and clearly bring out impact in numbers – What value do you assign for getting a legally enforceable patent and converting it into a real business asset which can be financially exploited or sold for value? How would you value a lawsuit that you helped settle early avoiding litigation which not just saved potential future costs and resources but also helped tweak a current weakness in the process or system that can help with future liabilities? 

Put on your ‘thinking cap’ and work towards making sure that your CEO and the Board recognise that legal strategy is a vital ongoing process that is linked directly to the company’s future competitiveness. Seize the opportunity to build trust and consciously make it part of your function’s purpose; let it help define your contribution and not just your value but the necessity of your proportionate, thoughtful, expert insight and intervention. Modern GC’s need to be better equipped at converting constraints into opportunities, upskill themselves to use the enabling aspects of law and leverage the strategic value of compliance.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join: