In my article “Stop being proactive…” about in-house lawyers and some lazy/clichéd thinking, I said that being “commercial” was borderline unethical. (http://www.lbcwisecounsel.com/resources/articles/article/stop-being-proactive-stop-being-commercial-stop-being-nice/#.U-Uut_ldWuk). I didn’t try to justify the comment in any detail, but because it is a statement that sounds ridiculous I want to develop the idea a little more…
Once upon a time I was an in-house lawyer and during those years I was the senior in-house lawyer in two financial services organisations. I was the Head of Legal Services at Cheltenham & Gloucester plc and Legal Director/Company Secretary at United Assurance PLC. I had many career shaping experiences as a lawyer, mostly very positive. I absolutely loved the opportunity to be immersed in my organisations’ ambitions. I wanted my teams to be a positive force and I encouraged all my lawyers to be close to all the key drivers of success – the people, the policies, the procedures, the politics; but I was also always acutely aware of the ethical framework within which we worked.
I regularly reflected on the ethics of the in-house role. What is the line between advisor and decision-maker? How do we judge where the line is? Does everyone see the same line in the same place? These questions are perhaps even more relevant today and, if I may say so, in my judgement they are less well considered and less well answered today. I will share three perhaps seemingly innocuous examples from my personal experience to tease out the concerns I have.
- It is obviously important for any lawyer to be credible. A credible lawyer however is someone who will attract requests for their insight and support. Very many times people would come to see me to ask if they could talk about something that troubled them on a personal level. It was quite flattering and it was also a verification of the trust they placed in both my role and my advice. I didn’t encourage these conversations, but neither did I turn people away.
- During any day my status as an advisor could change from one meeting to the next. In a formal meeting with my executive colleagues my role was very clearly delineated. Typically there would be a lively debate and then the Chief Executive would say “Paul, can we do this and be on the right side of the line?” Everyone in the room knew there was a commercial imperative and a regulatory requirement. We were all searching for the right path. We all listened, we all debated and a collective decision was taken, but it was not my call. Consider a different situation however which was also typical. In another conversation I might be with the newest recruit to the marketing team. I am presented with their draft marketing copy and the question “Paul, can I say this?” This is not a peer to peer debate, more a question asked of the school teacher whose answer is final. I scribbled some changes in the margin and my colleague went away happy.
- On an annual basis I was asked to define my personal and team objectives – always to be aligned to corporate goals and on which appraisal (career development) and bonus (remuneration) decisions would depend. It was frankly a tedious and often artificial game to play, but play the game I did if the status and money was to be earned by my colleagues.
It is perhaps hard to see the mischief in any of these three routine examples, but my concern then (and even more so now) is that there is mischief and especially so if the filters we use to judge potential ethical pitfalls are not properly applied or are not there at all. Let me explain some more.
First the “confidential” conversation; this was often about my colleague’s dispute with a neighbour over overhanging trees, but occasionally was about a business related issue. I remember one colleague being concerned about a possible breach of capital adequacy rules because certain assets were not classified as high risk when she felt they were. I remember another colleague in tears in my office because he had just been required to sign off the eviction of a family when he felt we should have accepted their offer to repay loan arrears over time. You will immediately see the issue. Is it ever advisable for an in-house lawyer to have a so-called confidential conversation with a colleague? Can it ever be “confidential” anyway?
Second, what about the conversation with my newly recruited marketing colleague? Was I not just doing my job and showing a kindness to them? They came to me with a question and I took a few moments to explain that their words constituted a potentially misleading statement and I wrote down the words I thought would be acceptable. My words. However just a few months later those same words (my words) were being investigated by a trading standards officer in a criminal investigation. His view was that our advertisement was illegal. I was then in a position where I was advising my client about my words. Did I have a duty to my client to declare that they were my words and that I was now conflicted?
Finally, the annual round of objective setting created two tensions for me. First I was creating a personal interest in commercial outcomes for individual lawyers on matters they would advise on directly and indirectly. Second I was not able to incentivise risk assurance work (for example on knowledge management, compliance training etc) simply because short term business goals were targets that had significant financial consequences and always had priority. The objective setting regime institutionalised behaviours in the lawyers that supported short term-ism.
What then is to be done?
In my view it is crucial that we raise awareness of our blind spots. The filters through which we see our worlds must reveal and not obscure our blind spots.
The standing joke for a legal team has always been that it is “the department that says NO” or the “sales prevention team”. The constant low level criticism of a legal team is that they are “not commercial enough”. General Counsel exhort their teams to be commercial, to be business people, to be “less lawyerly”. Eminent voices on significant platforms can be heard to say the biggest compliment they have ever been paid was not to be seen “as a lawyer”.
All of this is well intentioned. It is at a level quite plausible. It is however utter hog-wash. It creates our blind spots and does not reveal them.
We have allowed the vocabulary to become so lazy, so imprecise, so lacking in meaning that literally a generation of lawyers has been given half-baked platitudes that we have dressed up as strategic exemplars. It is just so wrong.
The role of the in-house lawyer is so difficult to get right. It is the hardest job in the legal profession to do really well. We take talented people from law firms where they have constant peer support, precedents and know-how to die-for and the checks and balances of decades of practice experience behind them. We then place them in hard-nosed commercial environments, often in subordinate roles to the people they must advise; we strip them of much of the peer support they are used to, throw work at them that is outside their expertise and with minimal tech/library/precedent solutions. We do this and then say “be commercial”.
Added to this mix we have now been through a global economic crisis where we have exhorted lawyers to “do more with less” or (implicitly) lose their jobs.
Frankly we have stored up a mess. We are poorly lead, poorly regulated and poorly served by the wider profession.
My views on the mental health and well-being of lawyers in our profession (http://www.lbcwisecounsel.com/resources/articles/article/a-crisis-of-well-being/#.U-XTSPldWuk) and on the failure of many law firms to address inefficiency in the way lawyers work because of their financial self-interest (http://www.lbcwisecounsel.com/resources/articles/article/stokholm-syndrome-in-legal-services/#.U-XTAPldWuk) are all relevant and linked to this issue.
We need to do four things:
- The role of the in-house lawyer is often crucial in very many businesses. It should however be a privilege and not a right to employ in-house lawyers. We must do more to create appropriate environments for in-house lawyers and we must discuss and embrace our ethics. Look at the extraordinary lengths the Solicitors Regulatory Authority has gone to regulate Alternative Business Structures; yet in-house lawyers work in a de facto multi-disciplinary environment with minimal regulation and support. Should there be a “fitness-to-employ-lawyers” test for businesses to pass? Let’s at least have the debate.
- We must define the role of the in-house lawyer more precisely. Where are the hard edges, where are the lines we do not cross? As a gnarly GC my instincts are sound, but a new to in-house junior lawyer has no such hinterland. Should not every in-house team induct their newly appointed in-house lawyers with an explicit statement of their responsibilities and expected behaviours as lawyers and how they will be supported to achieve the standards required? Can we not have an annual declaration of compliance with our ethical rules?
- We need a serious debate on the role of the General Counsel. What are they responsible for, what is not in scope? What are their responsibilities as leaders of lawyers in their organisations? Should regulators be able to rely on the General Counsel to assure ethical behaviour on the part of all the lawyers in the business?
- Given all that has happened in banking in the last few years I do not think we are far away from General Counsel going to prison. We have all seen the examples of traders “bantering” and what that now means for some of them. We know business people can be extradited to the United States to wear orange suits for years for technical breaches of regulations in the UK. Are we so far away from seeing a General Counsel being asked under caution how it could possibly be the case that the commercial ship wreck of a deal they oversaw was using a map they had drawn and a course they had set? We need to make this threat an important part of the mindset of every General Counsel.
Serious, important, respected people in the in-house community have got to put ethics on the agenda, treat concerns respectfully and with care and help to lead opinion. We need a credible working group that engages the whole community of lawyers, regulators and other stakeholders; we need thorough research and we need to define the guidelines that properly support the next generation of in-house lawyers if we are to fulfil the potential for such a wonderful career.
Paul Gilbert. Chief Executive LBC Wise Counsel