GC: Tell us about your pathway into law?

Rupert Skellett (RS): I initially read English Literature at University and ended up working in book publishing for Penguin. But, I decided that wasn’t for me, and I felt that I needed some kind of “skill” that would make me employable: I was great at analysing and reading literature, but, not really much else. So, I completed a law degree at City University of London and then went to bar school and then a commercial set of chambers. When my pupillage finished, I didn’t fancy going to the bar, so I managed to get a job in Simkins, in their music department. I was there for a year or so.

Then, I went to work for a sole practitioner- James Rubenstein- who worked from his flat in West Hampstead, which was a bit weird, but it was great because it was very hands on sort-of- training: I’d sit about two yards away from him in his office. His clients included a few record labels, one of which was Domino, and another was Beggars. I ended up doing a lot of Beggars’ work. So when Martin Mills, the owner of Beggars, decided he wanted an in-house person, I’d already been doing the job for a couple of years and essentially, I was the natural choice. I will have been at Beggars for 20 years in January.

GC: Tell us about your work day, what items fall under the realm of legal at Beggars Group?

RS: Well for me, the priority of the work is to find new recording artists to sign. That is basically the goal, the one thing we all strive for. What we try and do is sign independent, alternative music and that’s generally UK or US based. Although, that is slightly changing in recent years. The idea is: that we don’t find acts which we think are going to sell loads and loads, instead we sign acts because we like them; we think they’re interesting; and we think that people should hear them. That’s the most exciting part because you go to see an act play live, and then hopefully you negotiate with them and sign them. So, that’s obviously a big part of the job: negotiating the terms of the deal and drafting the recording agreement. A lot of my work, apart from negotiation, is drafting in-house, probably more so than private practice. It’s a specialism, certainly for a music in-house role.

GC: What’s involved in the negotiation stage?

RS: You’ll often be in competition with a bunch of other labels, the artist’s lawyer will be representing the artist and then they will be representing various terms they have in other offers from other labels to you. Then, you have to decide whether you want to match them or not. There are things we can offer that other labels can’t: we very much pride ourselves on being a global company and that means we’re able to offer a really good deal to artists, because none of the revenue we receive goes through an inter-company royalty matrix—which other major labels operate. This is our distinct advantage.

We also sign far fewer acts than other major labels in order to really concentrate on each act. The way we’re set up is that we have our own people on the ground in every major record market in the world–who only work on our releases. We can bring a real focus to pushing, promoting and marketing our artists, much more so than other major labels. If you sign to a major label in the UK, you don’t really have much assurance, that you as an artist, are going to get any priority when your record is released in the US: you basically have to try and persuade your UK label to convince your US label to get behind you. Whereas, with us, it’s much more top-down. The company is run from New York and London, what we sign is prioritised throughout the world.

GC: You’ve been working for Beggars Group for around 20 years now, how has the music industry changed in those years?

RS:  The industry has changed massively in the last twenty years. For a long time, it was in the doldrums. For the first 15 years of this century, the global record industry kept on going down and down, to the point where it basically became half of what it was in the heyday years of the 90’s, with CD’s and the rest of it. The problem was piracy. Piracy was a huge problem which came with the internet. There were attempts in the early 2000’s to license various services and they didn’t really get off the ground. So, for a long time we were fighting piracy and tech companies who didn’t value rights in the same way that we do- so that was a real problem. But, since 2015, the global record industry started to grow again and that’s down to the streaming services—Spotify initially, then Apple Music and Deezer, for example.

GC: Tell me more about these streaming services, how have they changed the market?

RS: Spotify specifically– because it provides a free service and has basically removed any need for anyone to pirate any music. There’s no real excuse to pirate and it’s a lot more convenient. Still, there’s a certain amount of technological knowhow that you need to pirate music. However, things the music industry has been doing, in terms of blocking pirate sites, has helped. Trying to get search engine companies to cooperate with that, is quite tough. So, that’s what I was saying about trying to persuade tech companies to play nice with rights. That’s been a major challenge, but there are signs that is improving. But, it’s down to those efforts in the industry and also the availability of companies like Spotify, who have a great service—you basically have all of the world’s music at your fingertips, in a nice, easy way to find music.

GC: You mentioned piracy a past challenge to the music industry, what are the current challenges that you face today as a GC?

RS: What’s really interesting about today, is that when I was a teenager and in my early twenties, I was really into dance and house music. And, you couldn’t get it anywhere—it was really hard—there were a few record shops in London—a handful outside of London, there were barely any radio stations—and that was really exciting. But, now you have the exact polar opposite problem, you don’t have scarcity, you have too much content—so much content. Every day, hundreds of thousands of tracks are uploaded on Spotify.

GC: That must be quite difficult for you when you’re searching for talent, there’s so much content out there, where do you begin?

RS: This concerns going down the path of monitoring data. That’s obviously quite easy to do now, because there’s so much data out there and so many data collecting systems. Other record labels quickly initiate their flagging systems for anything that looks as if it’s doing quite well and they just sign whatever is on that data system. Whereas, we still definitely operate on the basis of seeing the artist play live, meeting them, getting a feel for their vision and obviously whether we love their music or not. So, the massive challenge is, even if you do sign the artist, how do you get that artist content above the tidal wave of other content that’s out there? That’s something that we’re really good at, because we are quite niche, and we have this global army of fans who promote an artist’s music. That is the real challenge now: the enormous amounts of content generated, which is down to cheaper recording processes and distribution. I mean, anyone can upload content, get a distribution partner and then have your music up on Spotify.

GC: Has social media had an impact on the growth of an artist?

RS: Social media is very important to an artist’s career now. But, you can experience a problem where you’re massive on social media but that doesn’t translate into consumption or sales of recorded music. So, you need to be careful that you tie them all together properly. There’s a lot of “well, why you can’t do this?” promotion, and it’s a constant battle between “promotion” and rights exploitation, and getting paid for rights exploitation. If you’re exploiting rights, you need to pay for them, because that’s our business and that’s what we thrive on.

GC: You spoke earlier of royalties and licenses. What’s the role that you play in the acquisition of a song?

RS: We have a publishing company, but we, the record company, handle the recordings—this is a separate copyright to the song itself. So, our music publishing company handles rights and acquires rights to songs. They sign song writers to exclusive song writing agreements. I’m involved in that side of things: the signing of song writers, in much of the same way as the record side; helping negotiate terms with the publishing company and then drafting the agreements. But, in terms of licensing songs, for instance, if someone were to use one of the songs in a TV program, or in a computer game, then we have a global licensing department who handles those things.

GC: You said that you work with alternative music, so you have a couple of clients from the UK grime scene, who have in the past, been faced with criminal allegations, how do you deal with that? What are the ramifications when clients face criminal proceedings?

RS: We’re as supportive as possible, where we can be. Mostly this is an issue for the manager and the artist lawyer, not us as the label.  But I do remember that with Giggs, when we were about to sign him in 2006, the Metropolitan Police phoned us up and told us not to sign him. But, we went ahead anyway, because, we thought it was wrong to deny him of the chance of generating a professional career as a recording artist. Yes, people might make mistakes, but you have to give them a chance to change, it didn’t make any sense for us to say: “you’re going to be punished for the rest of your life for something you did when you were younger.”

GC: If you could give yourself one piece of advice at the start of your career, after you qualified with your law degree, what would that be?

RS: Be careful what you wish for.

GC: Tell me about your pathway into law?

Dan Webster (DW): I studied law at the London School of Economics and went to law school in Chester. I got a training contract at what is now CMS Cameron McKenna. I qualified in litigation, stayed a couple of years at CMS and then then moved to SNR Dentons. I stayed there for a few years and then decided I wanted a change. To my surprise, an opportunity came up to be an in-house litigator at Harrods where the then owner was famously very litigious. Once at Harrods, I quickly realised that I was meant to be an in-house lawyer, and over time, I’ve evolved into a commercial, corporate, employment, IP all-rounder.

GC: Could you tell me a little about that change from private practice to in-house law? How did you find that transition?

DW: I was brought in initially as an in-house litigator. It quickly became apparent that there was a demand for more general in-house work and perhaps less than a full time job available for litigation work. So, I was very happy to broaden my skillset, I wasn’t someone who wanted to stay specialised. I was very happy to become more like a legal equivalent of a GP—if I can make a comparison to the medical profession. The fact that you can kind of turn your mind to most legal tasks, I found that very interesting, and I really enjoyed the variety. Therefore, I really embraced the opportunity to try and be an all-rounder within an in-house practice, as opposed to a specialist litigator.

GC: What does your role as an ‘all-rounder’ at Harrods entail?

DW: I oversee the legal function for the entire Harrods group. This includes commercial, corporate, IP, marketing and consumer work. I look after all the company secretarial work for the group too. I’m also data protection officer, which is probably quite unusual for a GC. I oversee all the GDPR related work. I’m also responsible for the trade mark and domain name portfolio.

GC: Tell me a little about your team and how they assist in the aforementioned work?

DW: I’ve got five lawyers, a contract manager and a paralegal (who we are currently recruiting). In addition to that, I’ve got responsibility for the data protection team, which is currently two professionals. I try to lead by example: by working hard and by having high standards. I tend not to micromanage and let talent flourish. I always seek to be approachable and supportive and to make work enjoyable for my team.

GC: What is a typical working day like for you?

I’m not sure that there is a typical working day, but this is one of the great things about being an in-house lawyer—it’s not repetitive and it’s unpredictable. You learn to expect the unexpected. You might come into work with a list of tasks you’d like to get done that day, but it’s highly unlikely that you’ll actually get through that list without the phone ringing repeatedly with queries and urgent tasks you’ve not anticipated. So, a lack of predictability is something which is a reality of being an in-house lawyer—but also one of the best things about being an in-house lawyer.

GC: How has your role as a GC changed throughout your time in the industry?

DW: I think the volume of work to be done has grown. There’s much more multitasking to do and perhaps a wider appreciation of the GC role and the legal function.

As I mentioned earlier, the legal department at Harrods absorbed the previous company secretary department and I’ve been appointed data protection officer. So, the GC role from my perspective, has become broader and more compliance focused. Even aside of my role as data protection officer, the legal work relating to data protection and data security has become a much bigger consideration during my period as a GC.

As I said, the Harrods business has grown, and so has the volume of legal work. There’s also been a shift towards keeping more of the work in-house and towards upskilling, rather than outsourcing. As a result, the legal team which I manage, has grown and all of us have had to become more versatile and more efficient.

I’ve noticed that during my period as a GC here, the legal department is increasingly seen as more of a general value-add, rather than just a legal function. We often take on more of a general role in the business projects we work on, rather than being limited simply to providing legal advice.

Being a GC is hard work and I don’t think it’s the easy option, when compared to private practice, if it ever was.

GC: Tell me about how you’re planning to use technology in your field?

DW: Another thing that’s sort of changed, is that we now have more of a focus on technology. Indeed, at Harrods, we’re currently trialling a contract management tool. It’s very early stages, but one of the contracts which we use repeatedly is a concession contract: we have many, many companies that operate concessions—effectively shop-in-shops— in Harrods, and it’s a complicated commercial arrangement. We have a fairly long concession contract. So, we are trialling technology which allows us to populate a precedent concession contract based on various different options, depending on the specific commercial deal you’ve struck on with a concession. The idea is that it will save us a lot of time and provide greater efficiency. But, as I’ve said, it’s quite a complicated agreement to do through a contract management tool. We are in the early stages, so it would be much too early to say whether it is a success or not.

GC: Could you tell me a little more about the work you do concerning trade marking?

DW: Well, Harrods has around 700 trademarks throughout the world. We need to protect our brand which obviously is very valuable. It’s one of the most famous brands out there and definitely one of the most famous retail brands in the world. The trademark acts as a deterrent to other organisations using our brand without our permission. It also means that if someone does try and use our brand without our permission, we’re able to enforce our trademark to stop this infringement.

GC: You spoke about your role within data protection, tell me about this?

DW: Companies the size of Harrods are required to appoint a data protection officer, and I took on that role for Harrods. I was appointed in the period before GDPR came into force. Therefore, I was involved in helping to manage the GDPR compliance project along with a data protection team. I am now responsible for the ongoing GDPR compliant operation of the Harrods organisation—assisted by the data protection team and plenty of other people within the Harrods organisation.

GC: Going off the back of that, is compliance a challenge for you and your team?

DW: I’ve talked about the company secretarial role and those challenges, but, we’ve got additional regulation in other areas as well. We have annual reporting obligations required by the Modern Slavery Act, and since 2019, we’ve got governance reporting obligations courtesy of the Companies (Miscellaneous Reporting) Regulations 2018. We’re also helping to prepare Harrods for the imminent introduction of IR35 which will impact on private companies who instruct consultants. As GC, I also attend the annual audit committee meeting and work closely with our internal audit and anti-money laundering team. Overall, there’s quite a lot of compliance work involved in my role, and that of the wider legal team.

GC: What are the current challenges you face at Harrods at the moment?

DW: The business never sleeps, so it’s genuinely a constant challenge—but, I wouldn’t have it any other way. The work-life balance can be an issue, but it focusses you to be efficient in the way that you work.

As well as business as usual, there’s always one or more major project to work on. At the moment, we’ve got a store-wide refurbishment project; we’ve been collaborating with Farfetch.com in relation to the new Harrods.com website; and we have two new business we are trialling away from the store: H Café and H Beauty.

Two years ago, one of the projects concerned divesting ourselves of four non-retail subsidiaries. All of these deals were being worked on simultaneously and in fact all of them completed around Christmas 2017, which was a memorable juggling act.

GC: What is in the pipeline for Harrods?

DW: We’re nearing the last stages of the store refurbishment project, we’ve recently reopened our food halls and a state of the art new beauty room. We’re revamping our chocolate room very shortly. We’re re-platforming the Harrods.com website which will be launching early this year. We’re trialling an H Café concept in Henley, which is both a café and a click-and-collect location, with changing rooms upstairs. We’ll be opening two H Beauty shops this year, this is a very exciting new beauty concept and effectively a new brand which we’re building from scratch.

GC: What have been the high points whilst working at Harrods?

DW: I’ve been very luck to work here during a period of rapid change, which has bought Harrods success and growth. Throughout this period there’s been drive, ambition and innovation. I’ve been very fortunate to be in the organisation at this time. Some recent highlights include the projects I’ve mentioned earlier. But another high point is my current team—I’m very lucky to have such talented and dedicated colleagues.

GC: If you could go back in time, when you were starting off your career in law, what would you tell yourself?

DW: I’d say try and get an in-house secondment as a trainee or junior solicitor. This will give you an early insight into both sides of the legal profession: private practice and in-house. This will help you plot your career path and give you a valuable insight into how businesses really work.

GC: Could you tell us about your pathway into law?

Alex Scudamore (AS): I read French and German at Bristol University, and then completed the law conversion course. Prior to starting that, I took the usual route of looking at different options in terms of what I might want to do. I ended up completing a vacation scheme at Macfarlanes LLP. Off the back of that, I was offered a training contract. I then completed the law conversion course and LPC. It was after this that my training and career at Macfarlanes started.

GC: How did you move in-house?

AS: I was in the commercial team at Macfarlanes. The department was broad in terms of the areas of law covered – anything from commercial contractual work, to IP, to brand protection and data protection. I was therefore geared up in a very commercial way. I was then sent on a secondment, initially to a card payment processing company – an industry I was not particularly familiar with. It started off as a three-month secondment, but ended up being nine months in total. It was semi-virtual, with half the time spent in their offices out in Cambridgeshire, and the other half of the time spent back at Macfarlanes. So my first taste of in-house life came when I was a year-and-a-half qualified. I then went back to Macfarlanes’ commercial department to carry on there. It was after this that an additional secondment opportunity came up at CSM, a sports marketing company. I enjoyed the opportunity so much that I ended up never going back to Macfarlanes. I ended up remaining at CSM for four and a half years.

GC: How did you come to be head of legal at the AELTC?

AS: I was very happy working in the sports marketing company. But, for me, the appeal of the AELTC was working for a rights holder, as a lawyer. When working for an agency, you’re unable to give external legal advice to your sporting clients – whether that be brands or players, you’re always at a slight distance. I was starting to think about my next move and the appeal of Wimbledon was obvious – it’s such a strong property, it’s such a strong brand, it’s established in the sporting world, and therefore an opportunity that I just couldn’t turn away.

I began as head of legal at the AELTC in September 2018. Before me, the AELTC never had a full-time in-house resource and instead used a combination of retained legal resource (via Kerman and Co.,) and other external firms. But the time was finally right to have that full-time, day-to-day legal resource, so I was brought in as the only full-time lawyer, as head of legal.

GC: What’s a typical working day for you?

AS: I would say no day is the same and the work is extremely broad. I mean, I certainly haven’t been bored since I’ve started working here, there’s been a steady workflow. There will usually be several major contracts on the go at any one time. These could be anything from a renewal with one of our key official suppliers, to queries that arise from broadcast arrangements, IP protection, ticketing issues and data protection. Recently, I’ve been doing a great deal of work on the grass court season that the AELTC has been investing in.

GC: Tell me about Wimbledon’s grass court strategy?

AS: We have invested in developing our grass court strategy. The aim of this is ultimately to provide world-class opportunities for junior players to compete on—and thrive on—grass, at all stages of their development. We’ve obviously got a Grand Slam event here, but there are many tournaments in Europe which form part of the women’s and men’s professional tours. These are very important, as we want to give players the best opportunity to play on grass. In that three-week gap between Roland-Garros, which is played on clay, and Wimbledon, which is played on grass, we have created a grass court series for the world’s top 150 players. We’ve announced a series of strategic investments to strengthen this season. We have also acquired sanctions to stage those tournaments. But, whether it’s been by way of acquiring sanctions or obtaining rights, in relation to the staging of the tournaments, we’re working with tournament delivery partners in the various territories to deliver these events.

GC: What’s legal’s role within the formation of contracts with your sponsors?

AS: If it’s a new official supplier (sponsor) deal, you will be brought into some of the earlier discussions, so around the heads of terms that might be agreed. You’re also brought in materially a little later on. We’re responsible for putting together our ‘official supplier’ agreement. We now have a standard form agreement that we will populate, often followed by some degree of negotiation. The agreement takes the form of your main body of legal terms and a schedule of rights setting out the rights that our official suppliers are getting. This is a standard structure in rights deals.

If you have a renewal of an existing agreement, then there may be certain items that would have been renegotiated commercially, so it would be our responsibility to work with the commercial team to negotiate these agreements.

Earlier on this year, we entered into a new partnership with OPPO – the Chinese mobile phone company. We haven’t worked with a Chinese partner before in the context of an official supplier arrangement, so this was an exciting new deal which also covers an entire new product category.

GC: How have you developed your skills during your time in the industry?

AS: As a lawyer, this is something that happens naturally – I have become much more strategic in a way which enables me to advise in a more commercial way. Having that ability to step away from the pure legal and really understand – to get under the skin of the business – greatly helps. Of course, you still must be that academic lawyer in many senses but I think, certainly in-house, you have a need to be both commercial and practical. You don’t want to be seen as the deal prohibitor in the organisation, you must be the enabler.

GC: Would you say that being a ‘business enabler’ is an advantage of working in-house?

AS: Yes, 100%. When you’re in private practice in a law firm, you have a variety of clients and, to a certain extent, you’re at an arm’s length from their day-to-day business. But, coming in-house, your ultimate main client is the business itself. You are there to protect – and have a credible working understanding of how the business works – whether that be financially or strategically. You also must be able to juggle the various different stakeholders within the business: from your senior board members – the executive board and here, at the AELTC, the committees, made up of members of the All England Club. You must balance those stakeholders within the business, but you must also be able to work with everybody – this includes those involved in the ‘on the ground’ delivery of The Championships. Though, for me, it’s the variety. There’s an awful lot that goes on to ultimately stage one of the best – well, we think The best – Grand Slam event in the world. As head of legal, you have a key role in making sure that you are doing everything in your power to protect the business.

GC: What sorts of challenges are you facing, or have you faced, working at Wimbledon?

AS: I think it’s getting to grips with the business – and that naturally does take time. You may have to deal with legal issues which you haven’t necessarily come against or had much exposure to before. Certainly for me at the AELTC, the area of broadcast has been a new area for me – from a pure commercial understanding, but also legally – so we’ve been working with external parties on that. It’s getting to grips with new areas – you definitely have to learn on the job. It’s not a case of looking things up in a book: reading a case isn’t necessarily going to help you, you’ve got to develop practical learning.

In my role, I would also say that it’s probably been juggling the number of different matters that require my attention legally. You also have to develop a deep understanding of broader issues in the tennis context, from a wider, global perspective. You need to grasp how the various other tennis organisations (like the professional tours for men and women, the WTA and ATP, for example) function and interact. This is very important for us as a Grand Slam event, so for me, the biggest challenge has been understanding how everything ultimately fits together.

I think as an organisation our biggest challenges are compliance related. We are delivering a major sporting event, with hundreds of thousands of people who visit the grounds, so one of our biggest challenges is security. Fortunately, we have great internal and external teams who focus on that. I think for me, it’s also certainly GDPR and data protection. We need to make sure that this continues to remain at the forefront of our focus as an organisation.

Also, there was an independent review into the sport of tennis from an integrity perspective. Since the Tennis Integrity Unit has been established, the AELTC has been actively involved in this to make sure we are upholding the highest levels of integrity in our Grand Slam event and, indeed, these new tournaments that we are now involved in.

GC: What have you enjoyed most during your time at the AELTC so far?

AS: The AELTC is growing at such a pace and we can’t afford to be complacent. We’ve acquired the Wimbledon Park Golf Club that is situated across Church Road from us – that ultimate expansion is very exciting. Further expanding our investment into the grass court tennis season has been a new thing for the AELTC – it’s been a new experience for me too. I’ve had to develop an understanding of how the ATP and WTA sanctions to stage tournaments work. Aside from some of the highlights mentioned, for me, it’s the ability to work with a range of people, and the exposure that I’ve been given within the organisation has been great. It’s pretty interesting for a lawyer here – you’re not kept siloed in your little box in an office tucked away, you are out there speaking to people. I’d like to think that I’ve become, or I am becoming, that trusted adviser within the organisation, which is what any in-house lawyer should strive to be.

GC: You mentioned the rights to stage such tournaments. Could you tell me a little more about these?

AS: It’s about making sure that the agreements we’ve got to stage these grass court events are robust enough to allow us to do what we want to do. We’ve had to juggle quite a few different parties – because on one hand, you must make sure that you’re acting in accordance with ATP or WTA rules (which govern how these tournaments must operate). Then, on the other hand, you’ve also got to manage the relationship with the entities that are delivering these tournaments on the ground. So, there has been some back-to-backing in these agreements: making sure that we’re not giving third-party rights in relation to the tournament, which we ourselves do not have. That has been quite important from a legal perspective because there’s a real balancing act around those protections.

GC: What’s in the pipeline for the AELTC?

AS: We’re continuing to invest in The Championships, which is the pinnacle of the sport of tennis. The investment in the grass court tennis season instils the love of the game in people and, ultimately, the ambition to play at Wimbledon at a young age. We also have the acquisition of the Wimbledon Park Golf Club – that was a very important moment for us in terms of our master plan for the future. We’re investing in our environmental sustainability too. Continually trying to improve and never becoming complacent is key for us.

GC: How important was mentorship for you, as you developed within your own legal career?

AS: I think it’s important to have a mentor, especially from an in-house perspective. This need not necessarily be a lawyer, but someone you can learn from in a career development perspective – someone who’s got experience of working in different organisations. Personally I don’t particularly like these female forums, because I think it actually highlights barriers which shouldn’t exist – and don’t exist sometimes.

Speaking honestly, I don’t think there are any barriers that exist for women getting into the in-house legal profession. I certainly haven’t encountered them. I think you get roles, in my experience, based on merit – and that’s the way it should be. I think one thing that I would say is that you do need to have an added confidence – I mean, certainly being in the sport sector, it has traditionally been a male-dominated industry. I think that you need to have the confidence to speak – if you’re in a boardroom with senior executives who are all men, you shouldn’t be put off by that, but certainly I haven’t seen any barriers from my side.

I think mentorship is a good thing. I think if you’re in a law firm, there is an obvious hierarchy, and naturally it is important to talk to those people who are further on in their careers about how they got there. I think this somewhat slightly changes in the in-house world. It’s helpful to have a network of other in-house lawyers to openly talk to about the challenges that you might be facing and how you go about progression – because the in-house career path is not as obvious as private practice, so to speak. I’m a lawyer for a rights holder; it is important to have a network of other lawyers in a similar position, because there’s naturally learning that you can take from other sporting rights holders.

GC: If you could go back to the start of your law career and give yourself some advice, what would that be?

AS: Stick at it. When you’re in private practice, the hours can be long (the hours are still long sometimes). I think that it can be a bit of a shock, initially. When I finished law school, I was in a corporate firm, doing pretty long hours. But, stick at it. Enjoy the learning.

I would also say have a think and take a step back when it comes to deciding what particular area of law you want to go in to. Don’t qualify into a particular department because of the people alone (although it naturally helps) – it needs to be an area that you’re truly interested in. Fortunately for me, it has been an area that I was interested in. But I’m not sure if I necessarily appreciated that back when I was choosing where I wanted to qualify. I knew I enjoyed being a commercial lawyer. But I don’t think that I appreciated how important that decision was at the time and how it would shape my career. Being a commercial lawyer has been absolutely brilliant because I’ve had the flexibility of starting off in private practice and then being able to go in-house, which has hugely suited me.

GC: Could you tell me about your current role, and your journey to where you are now?

Ria Sanz (RS): I’m currently Executive Vice President, General Counsel, Compliance and Company Secretary for AngloGold Ashanti (AGA).  I’ve been at the company for almost nine years, but I’ve served as general counsel of publicly listed companies for 21 years, in range of industries including industrial gases, private healthcare, paper /pulp/chemical cellulose and more.

As head of sustainability at Sappi, a paper company, I became closely familiar with the importance of responsible and ethical business practices across a number of contexts. This role helped with my transition into the mining sector, given the diverse and extensive group of stakeholders in the industry.

I have a great legal team at AngloGold Ashanti. We work as a team to support the objectives of the business through close collaboration and involvement with our colleagues. We’ve built up a strong compliance function and programme which was implemented over the last five or six years. As a result, we’ve been successful in avoiding any significant compliance issues. This is important since we deal with governments at all levels, from presidents to mayors and other local government officials. It is critical to ensure that our people have a strong understanding of what is legally unacceptable behaviour. We are guided by our values and believe that, in order to maintain our social license to mine, we need to be a good corporate citizen and partner in the jurisdictions in which we operate.

GC: You’re on the Executive Committee and you occupy a very senior role within the business. Worldwide, that seems quite rare for legal personnel, although it’s becoming more common. Was that always the case since you joined, and is that a symptom of the industry you’re in or is that just the culture within the company?

RS: When I joined I was, I believe, the first group general counsel and member of the executive committee that reported directly to the CEO. As the general counsel, I believe you need a seat at the table so that you are well-informed, otherwise you are going to be fighting with one arm behind your back. We operate in complex environments with risks around litigation, class actions, disclosure and instances where just saying something without a comprehensive understanding could have significant legal implications. So yes, I would hope that it’s increasingly understood that the general counsel does need to be a member of the executive.

GC: When you took over the role, was there a period of adjustment and defining boundaries and relationships?

RS: Definitely, it’s normal for it to take time to get the right team in place, put in the work to ensure that the key legal matters are understood and establish one’s role and voice at the table. I’ve also been very lucky that I’ve had good support from the CEOs and members of the executive team.

GC: As far as the role itself goes, since it was a new role, were you able to define the role profile more than you would have otherwise?

RS: That’s one of the advantages when there isn’t a history of the role in place. Senior roles are, to a certain extent, also driven by personalities. People’s strengths differ, even in the same role, and businesses evolve, so I think it’s natural for roles and responsibilities to change over time.

Industries have changed significantly, too. For example, when I was with Sappi and I was asked to head up sustainability in 2007, it was not something that either shareholders or other stakeholders had such an interest in as they do now.

I believe that strong legal people need to be able to adapt in order to contribute towards the strategic objectives of the business.

GC: I imagine that influences the kind of people you hire to report to you directly. In South Africa, is there a good pool of in-house lawyers that can fulfil that role or is it a struggle to find the talent?

RS: Mining is a well-established industry in South Africa, so there is a good pool of talented people. We are also a global organisation and, as such, would look across the globe for talent.

I think more and more people find mining to be an interesting and dynamic field of work. I think younger people want to work for companies that have souls and an opportunity to make a difference.

GC: Speaking broadly about the mining sector, you touched on the fact that you have all of the issues and stakeholders that other industries have, and more. Was there an adjustment period?

RS: Yes, there was. This role has been by far the most challenging and interesting. You eat, drink and breathe the industry,  the company, and the role. It’s a 24/7 industry and, as such, requires a lot of dedication.

I think all of my experiences through the years placed me in quite a good position to take on this role. It was overwhelming to start with, but I had a great team of people that had been in the organisation for some time in addition to having a supportive CEO and executive team. A lot of these people are still in the organisation and I was fortunate to be welcomed and helped – so that made the transition easier.

GC: What do you think is the biggest challenge specific to the mining industry that the legal team faces?

RS: I think it’s the challenge of keeping up with a rapidly changing regulatory environment – and quickly having to understanding the impact that those changes will have on the business in the short, medium and long term.

GC: Is it difficult to keep your finger on the  pulse in many different regions?

RS: I think that mining has significant commonality across jurisdictions. The fact that governments expect a return on the resources is something that is common, communities look to us for employment and for CSR (Corporate Social Responsibility) projects. The themes are very much aligned. It’s the implementation that can change from one jurisdiction to another – how you participate with communities; which projects would be most impactful; and how these initiatives are implemented. It is important to understand the jurisdiction and proactively manage the expectations of governments and other stakeholders.

GC: Do you have a team in every jurisdiction, or in some of them are you relying on external advisers locally?

RS: We have legal representation in each of the countries where we operate. The complement is determined by the needs and complexity of the country and the operation, and the types of interactions they are likely to have, i.e. some might interact more with the local regulators, while others with the national government officials together with the corporate team as well.

GC: In terms of the legal systems you’re operating in, I imagine there’s a spectrum, from very well-defined legal systems and regulations to jurisdiction where things aren’t quite as formal, or even stable. How do you grapple with that?

RS: I wouldn’t say that’s exactly true anymore, certainly not in the jurisdictions where we are. Large-scale mining and gold mining are at different stages in different countries. But many of the jurisdictions have had mining activities – whether it’s gold or another resource – for an extended period. More and more governments have well-resourced and experienced people that understand mining. This helps tremendously in our engagements with governments.

GC: Is it easy to keep policies consistent across the board in every jurisdiction that you’re operating in?

RS: If I’m looking at the compliance side – because we are also listed on the New York Stock Exchange and in Australia and Ghana, not just in South Africa –the need to make sure  we’re not in breach of any bribery, corruption or ethical issues, means we do apply policies across the group. It is key that those policies are developed in conversation with individuals in the group. This enables the practical application of the key principles and allows for operating consistency in a number of areas.

GC: I suppose that links to what you were saying before about the business having core values?

RS: That’s right. And also, the reality is that anything that happens in Ghana will impact on how people see you in Colombia. The importance of having a consistent set of operating values, no matter where we are and even if it is to a much higher standard than the local regulation dictates, is key.

GC: Do you set the vision for the legal team on a yearly basis or a multi-year basis? I imagine that the business environment changes quite quickly?

RS: We’ve recently had a re-look at our operation model across the organisation and have made some changes to our team’s structure. I believe this is something that needs to be revised periodically and requires regular attention, even if no changes are made.

GC: Looking ahead to the next five or even ten years, is there anything that you see coming round the corner that may impact the work that you do?

RS: I think there are going to be increased risks caused by external factors. There’s climate change – with increased rainfall,   higher temperatures and rapid population growth: we have to contemplate the impact this might have to our equipment and operating environment. Mining often has a large footprint, so are we going to need to be in dialogue with farmers and other industries for both access and ensuring the preservation of land and the environment.

Technology changes will be another area that I think will continue to gather momentum. We will need to consider the impacts to mining and our production, costs and employment model.

GC: I imagine that you have to keep an eye on the political situation globally, which obviously now is changing a lot?

RS: The political landscape is something we already look at carefully. We often need to make significant capital investment decisions with long-dated returns on capital that need to survive potential changes in the operating landscape.  For example, if a project has a six year payback period and every four years there is a presidential election that tends to come with significant changes in that jurisdiction, we have to consider the risk factors in making a decision on that project.

There are jurisdictions in which we operate now that I didn’t visit in my first five or six years at AngloGold Ashanti because they were politically stable. However, the second there’s change on the political front I visit.

GC: Is there any way that you can safe guard against that?

RS: I think, like always, you’ve got to look at the returns through a lens that considers risk and reward, like in any business. As a management team, it is our job to manage the risks to the best of our ability. We do our part to safeguard the business and its investors from this risk by maintaining a pulse on the political landscape, along with working to mitigate social, environmental and other risks through our approach. Our compliance and oversight measures help to ensure that this work is done.

GC: Is there anything else you wanted to talk about?

RS: I was talking yesterday with a colleague in another mining company, and she referred to mining being an old boys club. It’s still an old boys club and women still need to be better represented. Diversity in every sense is something that we, as an organisation, see as very important. Not only when it comes to our recruitment practices, but also in the law firms that we use. Encouraging our external advisers to also strive for diversity is, I think, another way we can push for change. That is one aspect we need to continue to work on.

GC: Have you found that law firms are increasingly using diversity as a selling point to you?

RS: It is one of the points that comes across in conversations with the law firms, particularly the topic of fair pay. Law firms, though, are realising that salary parity is something their clients find important. Hopefully they see it as the right thing to do and a key business imperative. It is something that I think we, as their clients, are well placed to influence.

 GC: Is it hard for you to assess how effective the law firms are in their diversity and inclusion pushes?

RS: It’s good to understand what programmes firms have in place. I think more and more of them do have initiatives and are progressing in the areas of inclusion and diversity.

But I do find myself also becoming more vocal. Where I see no diversity I’m now having conversations with senior partners and even driving the makeup of teams that work with us. I can have an impact through doing that. It’s also my responsibility to do it. I would expect my stakeholders to be impressing on me to have diversity in my team as well.

Othelia Langner is speaking in her personal capacity, and not on behalf of Medtronic.

GC: Can you tell me about your current role and your career journey leading to it?

Othelia Langner (OL): I’m currently responsible for legal and compliance for the Southern African and Sub-Saharan regions.

I followed the ‘standard’ route to qualify as an attorney in South Africa, and then I had the opportunity to join Simmons & Simmons in London. During my time there, I went on secondment to UBS and Renaissance Capital in Moscow, and that is what initially sparked the interest in an in-house environment. My boss in Moscow took up a position as general counsel at a private equity holding company in Almaty in Kazakhstan and he asked me to join him, so I spent some time working there, and I really enjoyed it – it was very, very interesting.

When I was considering my next career move, I was offered the opportunity to come back to South Africa and join the South African office of Fasken, which worked out well because at the time I felt I was just a little bit too junior to go in-house full time. And so I went back into private practice, doing a lot of corporate commercial work in the mining space in South Africa and the rest of the African region, with a little bit in Central Asia.

I spent the next six years or so with Fasken, went through the ranks and made partner. And then Medtronic’s legal counsel resigned and they needed someone on very short notice. I’d just come back from maternity leave and it just aligned. I initially joined on secondment and then never left.

GC: Do you ever miss private practice?

OL: No. I love being in-house. It’s a completely different way of practising law, but – depending on the day! – I love the diversity, the intensity of it. I know in-house lawyers always say this, but you really get to know the business. You don’t practice law in isolation. Actually, the ‘business’ part of it is probably 70% and the strictly legal part maybe 20%. I don’t know what the other 10% is – human nature most likely!

Certainly at Medtronic, it’s a very collegial atmosphere, and I get to  do very interesting work so no, I can’t imagine going back to private practice.

GC: It’s interesting that you dipped your toe into in-house at first, then went back to private practice, and then back in-house.

OL: I was relatively junior (four years PQE) when I was exposed the in-house world. And, actually, it really helped going back into private practice having been in-house. I think all lawyers should ideally do a stint in-house for six months or a year.

GC: In-house skills are never really emphasised throughout law school. Do you think that it takes a certain kind of person to successfully transition in-house, or do you think everyone has it in them, it’s just a case of the right experiences?

OL: Whilst I think all lawyers can benefit from an in-house experience, some personality types may be more suited than others to working in-house. You have lawyers that are very particular about doing things in a very particular way – they want to really interrogate issues – whereas often in the in-house environment you have to make the best decision you can with the information you’ve got, often very quickly in high-pressure situations. You really have to be quite comfortable with assuming responsibility and perhaps (but hopefully not!) making the wrong call. I think the expectation of lawyers in private practice is that they don’t get the luxury of getting it wrong, because they are paid for their time to get it right. And some people are more or less comfortable with that kind of uncertainty and responsibility. I definitely think you can train for it, or at the very least, you can become more comfortable with it.

GC: You mentioned you felt you were perhaps too junior when the opportunity first presented itself to go in-house. When you did join Medtronic, did you feel confident that you were ready, or was there an adjustment period? What was that like?

OL: When I joined Medtronic, I was comfortable that I had the necessary technical skill, but also the gravitas and confidence to really engage with people at a management level.

You really are expected to be a business partner and to advise the business on bringing ideas to fruition and a key component of this is to appropriately manage risk. And when talking about risk, one has to bear in mind that risk can be much broader than, for example, the legal and financial risk that might result from an indemnity clause. It can encompass business risk, reputational risk and the risk of a loss of an opportunity. It would be amazing if you could do everything without any risk but that is not not a reality. And to determine which risks are acceptable, tolerable, given what you’re trying to achieve – I think from that point of view I was very much ready. But it was still a very big adjustment. To go from being able to take the time to really interrogate things to the level of detail you are comfortable with in private practice, to being comfortable with moving quickly – but not negligently or without due consideration – it’s a different dynamic.

GC: You inherited the department at quite short notice. Was it the exact same role to that of your predecessor?

OL: The department existed, and I think we all bring our own approaches to things so we have certainly evolved (not least because of the increasing complexity of the legal and regulatory landscape).

GC: Has the team, or the structure of the team, changed since then?

OL: I wouldn’t say the structure of the team has changed, but I think what we’ve really had to focus on is: with increased demand, how do we deploy the resources we’ve got to effectively address the needs of the business?

In private practice, you’re a revenue generator, whilst in-house you are a cost centre and so, as the business grows, there is often increased pressure on the department but not necessarily additional resources available. Which means you’ve got to look at how you work with those resources.

GC: I imagine that would be a real opportunity for you to develop the management skills that might be a bit less of a focus in private practice, by learning on the job.

OL: I think in private practice, it’s a very different dynamic. It’s much more hierarchical – you’ve got your junior candidate attorneys, your junior and senior, so you manage through the hierarchy. In-house, you’ve got to manage your team, but everyone is kind of semi-autonomous. Stakeholder management is probably the bigger challenge in-house, because you’ve got your team, your local and regional business teams, the regulatory team, the finance team, the quality team, the list goes on, and in a matrix organisation it is important that the right people are kept in the loop.

GC: On the subject of internal stakeholders, is that an ongoing piece of work for you – managing the profile, not just of yourself but also the team as a whole within the business?

OL: Medtronic’s vision includes being recognised as a company of dedication, honesty, integrity, and service, so the legal and compliance function is very highly valued and there’s quite a high degree of visibility and respect. I’ve never found that I’ve had to struggle to be heard because I’ve been able to build close relationships with the businesses I support.

GC: Do you think that’s reflective of the industry, or do you think that comes down to culture of the management of the board?

OL: It is a tough one to answer. I think in highly regulated industries, the importance of legal counsel and compliance counsel is easy to see, because you need someone who can help you navigate that. You can do that with external counsel, but that also involves someone in the business taking responsibility for that process and I think it makes a lot of sense to have that skillset in-house.

So depending on what your business need or goal is, the legal counsel function may play different roles: is it principally to keep you out of trouble? Is it principally to manage contracts? To execute the deals? In my position, it’s a far broader range of risks that we need to consider and manage and so we really are asked to be partners to the business.

GC: Would you say that regulation is the most challenging part of your job?

OL: A criticism that is sometimes levelled at lawmakers is that there may not always be the level of certainty or clarity that industry would want, and so it’s really about trying to navigate that. One way of managing this is to try to understand what the intent is; what the regulators are trying to achieve, and then you try and align with what you consider to be substantial compliance with this intent (rather than looking for loopholes). It can be challenging, but it’s not insurmountable.

GC: Is it difficult to communicate to the internal stakeholders the fact that you can’t give certainties?

OL: I think the thing when communicating with stakeholders is you’ve just got to be clear about the risks that they may be assuming. So you have to form a view. They want to know: can we do this? Should we do this? You can say: ‘Well, having looked at this, this and this, there is a risk that someone can make this argument. If they did make the argument, this is what would happen. We think that this is likely or not likely to happen. Are you comfortable doing this if that could happen? If yes, then that’s a risk we are prepared to assume, so how do we mitigate that? Is there anything else we can do to stop that happening?’

The business may not always have the expertise or the legal knowledge to be able to consider all the possible different structures, so that’s where you really partner with them to understand where they want to get to and how best to achieve it in a legal and compliant manner.

GC: Obviously the industry is highly regulated, but does it change often – are you grappling with new pieces of regulation?

OL: I’d say in the last three years we’ve probably had the biggest changes to the medical device regulations in the history of the industry, not least the amendments to the Medicines Act, which created quite a lot of uncertainty in terms of how they should be interpreted and applied. And when we were afforded the opportunity to provide comments, we made sure we did.

GC: To the regulators?

OL: Yes. For two of the most challenging provisions, operation has been suspended, initially for a year and now for a further three years, while they work through the comments and prepare new drafts.

GC: Would you say that the relationship between companies like yours and the regulators is a positive one – do they take comments like yours on board?

OL: I believe in the value of constructive relationships so it is important to me that when engaging with regulators this is done in a productive way. When it comes to issues that impact the industry as a whole, SAMED also plays a valuable role in escalating matters to the regulator.

GC: As technology advances, I imagine the nature of the products your company is supplying can change quite drastically, and might suddenly involve aspects of, for example, data privacy and cybersecurity, that might not previously have been issues. Do you find the nature of your concerns or priorities shifts as the work that comes across your desk changes?

OL: Indeed, technological advances mean that we need to stay on top of an ever evolving legal landscape too and I have definitely seen an increased focus on matters relating to data privacy and security. So I have had to develop my understanding of these areas, because whilst you can certainly rely on expert advice, you need to know how to work with it on a day-to-day basis.

GC: It seems like it would be difficult, in this industry, to split up the business into jurisdictions based on geography, because of the differences between regulators and what’s allowed in certain countries. Is that the case?

OL: When grouping geographical regions there are usually certain similarities in terms of market dynamics. However, when it comes to specifics on a country level, that’s usually something that would need to be considered on a country-by-country basis. When you are responsible for multiple countries, depending on the nature of the query, you can’t make assumptions that because something is a certain way in one jurisdiction, it is going to be the same in another. You have to ask a lot of questions, and the support and guidance of external counsel in the relevant jurisdictions is key.

GC: Compared to Europe, where there are many countries that are fairly similar, here you have countries right next door to each other that are vastly, vastly different.

OL: And that’s when that comfort with a degree of uncertainty is really important, because in developing markets there may be a disconnect between what the law says and how it is applied on the ground and you need to be able to find a way to work with those dynamics.

GC: Do you ever look at other industries that interest you?

OL: I get to work on really interesting, really complex, really high-level, challenging transactions and, added to that, I get to work for an organisation whose mission – “to alleviate pain, restore health and extend life” – truly resonates with me, so that will be hard to beat!

GC: It must have that added level of satisfaction and motivation.

OL: Our mission was written by our founder, Earl Bakken, and all these years later, we still have the same mission; it still informs how we do business (and I actually have it on the wall in my office). I’m really proud that in my small way I get to contribute to making a difference to patients’ lives. I’m very lucky.

GC: Just lastly, is there anything that you see coming in the next five years, be it specific to your industry, or your job, that you think will affect your role going forward?

OL: I think in-house legal counsel play a very important role in the business. I don’t see that falling away, but I do think that it is going to change, as it already has changed. Where the most complex legal matters used to go to external counsel, I think the breadth and depth of in-house skills and in-house capabilities will continue to be developed and enhanced, so you will really have in-house specialists. If I look at our organisation, the expertise and the quality of our in-house legal and compliance teams is just tremendous.

So yes, I believe that there’s going to be more and more emphasis on in-house legal being an integrated partner to the business and having a high level of technical expertise in-house. And with a lot of organisations facing huge pressures on driving down costs, I think there’s going to be a huge focus on making sure you get the right kind of candidate in the role so that they can execute effectively across a whole range of needs.

When it comes to technology, I’m interested to see how reliance on AI will evolve. At the moment, it would seem like more of a  possible concern to those in private practice, where there’s a lot more of the commoditised work. But, honestly, in the in-house environment, no two days are the same – so it will be a long time before AI can catch up.

That said, when it comes to adopting new technologies in the in-house environment, this too will continue to advance and will require us to constantly consider how we are doing what we do and whether there are tools that can enhance the value we provide. I believe that if we remember to regularly reflect on where we are and to challenge assumptions about how we have worked in the past, then I think we can, and will, evolve.

What makes executives tick? What goes on underneath the corporate veneer? What draws people to their professions in the first place? And how can the answers to these questions be used to help those in the corporate world, like lawyers, better understand themselves, the work they do and their relationship with the rest of their businesses?

These are complex issues, but at a time when the topics of wellness and mental health are increasingly being brought into the spotlight, answers to questions of psychology are not as elusive as they might otherwise have been.

Tell me about yourself…

If asked to describe the ‘typical’ lawyer, the person on the street might have a few ideas. Popular culture is strewn with stereotypes of lawyers, some admirable, many not. But is it possible to truly make generalisations about the typical personality traits a lawyer might have?

Yes, according to psychologist (and former trial lawyer) Dr Larry Richard. After ten unhappy years in practice, Richard followed his heart into psychology. But far from leaving the law behind, he remains fascinated by it – or by one aspect, at least.

‘Having put in all that time and grown up with my colleagues in law school and practice, I said “I’m going to study us and find out what makes lawyers tick”,’ he explains.

At his Pennsylvania-based consulting firm, LawyerBrain, Richard applies neuroscience, social psychology, positive psychology, leadership science, and a variety of other social science disciplines to lawyer performance.

‘Lawyers are the most atypical occupation on the planet. We are more different from the general public than any other occupation since data has been published. We are the original outliers,’ he says.

Among 21 traits measured on a standard personality profile, Richard’s research shows that lawyers’ average scores for seven of these are dramatically atypical compared to the general public (it’s considered unusual for even one trait to be atypical in most occupations). According to his research, lawyers score highest on scepticism, as well as on need for autonomy, urgency (read impatience) and ability for abstract reasoning. So far, so predictable, perhaps. But he also found that lawyers score low on sociability, psychological resilience, and cognitive empathy.

Richard argues that scepticism is particularly encouraged at law schools, which, he says, attract candidates already predisposed to this trait and then train them to be even more so.

‘The training that we have as lawyers trains us to look for the negative. We are trained to look for problems, what could go wrong, what is wrong, what’s not ok – we ignore the 95% that’s working. Whenever anyone else makes an assertion, we’re trained to always question the underpinnings of what they’ve said: never accept, never give the benefit of the doubt, always challenge. We’re trained to be vigilant about hidden motives, what do you really mean by that, what’s your agenda – it’s that kind of hidden, almost paranoid mindset. All of these things make someone a very competent lawyer, because the better you can do these things, the more you’re going to protect your client from a host of unseen potential problems,’ he explains.

‘But there is a price to pay and here’s the built-in tension. All the other roles that we ask lawyers to play these days require just the opposite, because almost all the other roles are founded on relationships.’

In Richard’s view, supervision, mentoring, managing, leading, being collegial, innovative – all important roles for lawyers as they climb the career ladder, particularly in-house – could be made more challenging by legal training.

‘Every one of these roles requires people to bring out their positive emotions and their connections with people, and yet scepticism and negativity inhibits their effectiveness. So we are constantly in this situation where there’s a tension between our role as a lawyer and all the other roles that we often have to play simultaneously – and that creates stress,’ says Richard.

‘Today, most corporations are trying to build in collaboration and teamwork, mainly because the business of business has gotten more complex as the information explosion has accelerated. You can’t do it all alone, you need to count on a team that has lots of different expertise, so collaboration is the norm these days. But the norm today in the legal profession is that we’re lone gunslingers. The nature of business is moving us all towards collaboration, towards people who are optimistic – and the training as lawyers is moving away from those corporate goals.’

Reaching out

In today’s corporations, forming productive partnerships with colleagues in other enterprise functions is key for organisational culture and to providing effective and valued legal advice. Lawyers can – and do – succeed in the corporate world, with the general counsel role often incorporated as a valued part of the C-suite, and former GCs increasingly taking up non-legal as well as broader, non-executive roles.

But could an understanding of psychology, emotions and behaviour oil the machine, giving in-house lawyers a leg up in forming those crucial bonds, and the skills to make better decisions?

‘I think there is perhaps a growing tendency to touch on these types of things. I think it’s quite en vogue over the last few years to talk about emotional intelligence, or EI. And EI is a lot about empathising and taking the other’s perspective and I think that was certainly something which lawyers have been encouraged to do. But is it baked into our training? Not really. I think we are trained as lawyers, certainly [in the United Kingdom], to almost work on a solo basis, and reach decisions on a rationalised and logical basis. It’s not an entirely social process,’ says career general counsel Adam Moy.

As a former general counsel in the financial services sector in the UK (he led the group legal function in London during Co-Op Bank’s restructuring until 2016), Moy first became curious about psychology after his wife suffered a devastating stroke. Fortunately, she recovered, and Moy was able to follow his new interest, eventually taking time out to complete an MSc in social and cultural psychology at the London School of Economics.

‘Social and cultural psychology looks at our behaviours with each other as humans – including how we have evolved as humans in a social context. The cultural element is how psychology and behaviours can vary between cultures and are influenced by factors such as where you may live in the world, belief systems and social norms, all of which shape your psychology. We also considered evolutionary psychology, one aspect of which is how we have evolved as humans through our unique ability to cooperate with each other,’ he explains.

Moy was most recently interim head of legal for corporate functions at TSB Bank. But his studies have left him with a keen awareness of the benefits an understanding of social psychology can bring, particularly in decision-making.

‘We were taught about the triadic paradigm: as a human being there is “self”, which is a completely interdependent relationship with “other”, and also with the “object” – a discussion of the environment, the context, the issue. No one of those is more important than the other, and if you think of the world through that lens, it may assist in understanding the key components of effective decision-making, through which leadership can emerge,’ he explains.

‘It will lead you down the path of: how do we listen, how do we take perspectives of other people? One classic theory about this is “intersubjectivity”, and this is really about the mutual exchange of thoughts and feelings while we’re interacting with another person. As humans, we have an evolved ability to sense what the other person might be thinking, and they might have an inkling about what we’re thinking too. So, if you’re looking at decisions, you’re trying to take the other person’s perspective, validate their feelings, and reach a decision through that process of interaction, which will hopefully be a good decision because it reflects both parties’ intentions.’

He adds: ‘All behaviour between humans is a form of communication. Decision-making in any field should be dialogical communication (two-way) based on that paradigm.’

Moy has been in talks with law firms who are interested in the intersection of psychology and legal performance, and he believes he can see the beginnings of a move to tap into the workforce’s fundamental behavioural processes in today’s business world.

‘A lot of emphasis is being put on effective collaboration – working alongside peers, working with other stakeholders, having a much more holistic view of the organisation. I’ve worked in financial services and banking, and risk management is at the top of the agenda for GCs and other professionals. There are a lot of people involved in that world, whether it’s the risk team, compliance function, finance colleagues, or others tasked with governance or protecting customer outcomes and reputation. You have to work with people who haven’t had the same training, and who think of risk in probably a quite different manner than how we might,’ he says.

‘A good GC will obviously build strong stakeholder relationships with everybody in these fields. But you can only do that if you’re cooperating and using some of these things that we’ve been talking about.’

Sometimes, says Moy, it’s simply a matter of stepping back and taking the time to cultivate a proper understanding of a matter before diving in with a decision.

‘There’s a celebrated psychology paper which broadly says, you say something to me, I repeat to you what I’ve understood, and then you confirm or clarify. All communication, if you want to lead to a proper and mutual understanding, cannot be done in less than three turns,’ he explains.

‘You might think: Right. I’m going to do this. This is how I’m going to approach it. I’m going to build up this brilliant project and then I’m going to execute it. But how many people have you consulted, have you listened to properly, have you really understood their perspective and validated it? Have you formed the interactions so that you have better insight into their “list” and you’re going to reflect that in your project plan?’

‘Lawyers are increasingly aware of their role in influencing and shaping an organisation’s ethical and cultural footprint, which itself determines a range of outcomes. Our social psychological processes shape that culture, and understanding some of the building blocks can help us, alongside others, in setting a clear cultural identity,’ he adds.

The power of emotion

For in-house lawyers, tapping into the wider organisation, although essential, can be a source of anxiety. On top of any dispositional reluctance to step outside the lawyerly comfort zone, there can be an inherent tension between the general counsel’s need to act as the company conscience and protect the organisation, while also working to further the company mission and avoid being seen as the department of ‘no’.

In some ways, this tension is highly analogous to the work of Rebecca Schaumberg, assistant professor of operations, information and decisions at Wharton School, University of Pennsylvania. She studies ‘social’ emotions, particularly ‘self-conscious, moral’ emotions like guilt, pride and shame – in all types of people, not just lawyers.

‘These emotions are interesting to me within an organisational context, because these are the emotions that link the individual to the collective – we wouldn’t feel these emotions in the absence of others. I’m interested in how the propensity to experience these emotions changes our relationships towards the collectives to which we belong,’ she explains.

Schaumberg has found that when people are highly prone to an emotion like guilt or shame, they contemplate decisions about a future course of action through a lens of emotional anticipation – conjuring up the emotional experience of their future self in the event of that action, and then moderating their behaviour to avoid that experience.

‘People who are prone to moral emotions anticipate moral or ethical decisions. They think about which actions would disappoint or harm other people. When people anticipate these feelings of guilt, they do a fairly good job in making decisions or adjusting their behaviour so they never end up in that situation that actually disappoints or harms others. The way that legal regulations operate like an external constraint, these emotions operate like internal constraints that align our behaviour to hopefully promote collective goals.’

This idea of the collective, or social environment, is key to how individuals regulate and prioritise moral decision-making when faced with competing constituencies – for example, long-term and short-term goals, or between organisational areas with opposing needs or expectations, Schaumberg has found.

‘You first have to internalise the standards of the collective. Let’s say it’s my organisation. I have to feel committed to my organisation and I have to internalise its values in order for these values to be meaningful to me. Once I’ve done that, you could say it’s about emotional management. When I act in line with these values, I feel pride. When I fail to act in line with these values, I feel guilt or shame. Over time, I learn to act in ways that produce the most desirable emotional state.’

The role of legal counsel can, in some ways, be seen as a metaphor for the internal struggle individuals go through when making decisions with moral significance.

‘These emotions are the conscience of society that makes sure that we grapple with those dilemmas. It doesn’t always mean that we make decisions that are, in the eyes of others, the most moral or the most principled – but we’re grappling with them,’ she says.

‘If the organisation were an entity, and you have a self-interest arm, well, you also need a conscience arm – and that’s the guilt and shame that we have internally. The legal counsel, in some ways, can be that – and it’s a really important check. In the same way that I think these emotions are hugely important for our individual behaviour, having people dedicated to being that check is hugely important for the success of the organisation or the collective.’

Schaumberg doesn’t yet have the data to determine whether lawyers are more prone to guilt than non-legal folk – but such data could be available soon. Her team has been following a group of US-based MBA students for nearly a decade in the hope of comparing their personality traits with their career choices and progression.

‘We want to ask, is there a selection mechanism where people who have these emotions are selecting into certain types of professions and selecting out of other types of professions? Or are there certain organisations or types of companies that lead people to become more moral or ethical?’

Guilt and shame are, of course, uncomfortable. But, for those especially disposed to feeling or anticipating these emotions, the experience needn’t be entirely negative, says Schaumberg.

‘The harder you’re willing to think about a moral problem, that’s associated with higher levels of moral character and integrity. We find that people who are willing to confront and grapple with moral problems also are willing to confront and grapple with other tough decisions. This depth of thought can lead to more insightful decisions.’

However, warns Schaumberg, a higher propensity towards guilt might sometimes inspire behaviours that don’t look like the most ethical choices to external observers.

‘People can feel a tension between different values or principles. For instance, people might experience a tension between being loyal (which can be a moral quality) to an organisation versus potentially harming people outside the organisation. There you have two moral principles in conflict. If I care deeply about my organisation and I care deeply about loyalty, the idea of not being loyal to my company would be painful to me. It could also induce guilt, leading to behaviours that can end up looking like they harm other people, but they are driven by this other moral quandary,’ she explains.

A company lawyer placed in any sort of moral conflict might feel stress, although hopefully such circumstances would be rare. But Richard believes that the day-to-day legal role, with its focus on anticipating problems, can accelerate the stress levels of lawyers, while at the same time ill-equipping them to cope effectively with that stress.

‘It causes us to atrophy our capacity to find the good – so we tend to be pessimistic. Research has shown that negative thinking produces negative feelings, and feelings are always associated with hormonal changes. And so negative thinking produces cortisol, adrenaline, norepinephrine, all harmful chemicals which are good in short bursts, that save us from the sabre tooth tiger, but which are not good when they’re in your system long term,’ he says.

‘Lawyers have 3.6 times the level of clinical depression compared to the general public. In a recent ABA survey, 28% of the lawyers surveyed reported depression. The survey also showed dramatically elevated levels of substance abuse, particularly during the first ten years of practice. These elevated levels of substance abuse are often hidden and very damaging – they produce higher levels of divorce, higher levels of distress, work problems, absenteeism. There’s a huge cost to all of that.’

To combat these risks, Richard recommends techniques to improve resilience, training the brain to seek out positives and identify strengths, not just deficiencies that need improving. He advocates focusing on positive social emotions such as gratitude, compassion and pride. But, he says, research strongly shows that social connection is the most powerful antidote to problems caused by negativity.

‘I mean ongoing, authentic connections with people. Where you interact with people and you reveal your true self, which might entail some risk or vulnerability, and you show a genuine interest in the other person. Listening to people’s stories, giving them your full attention – there’s actually some very compelling research on the power of presence, the power of full attention in building social connection,’ he says.

‘There is strong evidence that these shifts in mindset not only change the outlook, but they also change your biology, they change your immune system for the better, so people get sick less often, they have less frequent common colds, they can actually live longer, and they are more likely to make balanced decisions. That’s a bit of speculation on my part, but all the pieces are there for me to make that inference.’

The field of psychology is broad and covers a huge range of specialisms from which personal and organisational insight may be drawn. But perhaps a deeper understanding of psychological processes, especially social ones, can help bring success in the growing number of tasks and expectations for lawyers in the corporate world. It might also enhance that elusive quality: wellbeing. Keep that in mind.

Henk Crouse was the first general counsel for HSBC in Africa, having taken the role upon the bank’s first entrance into the market. And now, nearly 20 years later, having been the most consistent presence in the South Africa office among multiple CEO arrivals and departures, Crouse is retiring.

Crouse entered the legal profession as most in-house counsel do: as a private practice lawyer. His first in-house job was as in-house counsel for Nedbank, a regional institution headquartered in South Africa. It was here that Crouse got the offer to serve as general counsel for HSBC, which, at the time, was preparing to open an office in South Africa.

‘I was at Nedbank for 12 years and was very happy, but I thought, “What a great opportunity to start a bank and see how that is done”. And the bank had a good reputation as well – the brand was beautiful – and I thought it would be good to work for a local bank, and then an international bank, and compare the two,’ says Crouse.

‘It was a special opportunity and I felt I’d be stupid not to grab it. With the bank’s reputation and the brand, it was an easy decision.’

Becoming integral to the business from the start

Any incoming general counsel will speak of an adjustment period as they grapple with the legacy processes and expectations left by their predecessor. To be the first adviser for a company entering a new market presents a different set of challenges, as Crouse discovered.

‘To a great extent, I carved the role out myself,’ explains Crouse.

‘A lot of it comes down to your relationship with the CEO and how you market yourself – how you’re seen, what image you want for the legal department. Do you portray yourself as an integral part of the business? Or do you see yourself as an independent legal firm giving advice? And I think in 2000 [the latter] was the approach. But I think things have changed quite drastically. Now, you’re part of the business, you run with the pack. You go out with the relationship managers to the client, you negotiate the contracts, and it’s absolutely essential to have a legal head.’

It has been this focus on relationships from the outset, Crouse says, that has shaped the growth and success of him and his team. This emphasis starts with team building and, as the inaugural member of the team in South Africa, the building started from the ground up, with the success or failure of the team largely relying on getting this preliminary step right.

‘My whole career, the relationship of the legal department with the rest of the business has been very important to me. So when I came to HSBC, I wanted to continue with that, to be the best legal department. So, certainly, I think the most important thing is to appoint the right people. I was in a privileged position to have my pick of the crop. And when I did my interviews, the most important thing to me was to get a cultural fit. Because if you have a cultural fit and you become a family and set the values, then everything is fine. But you may have very intellectually strong people that have different work ethics that wouldn’t work.

Cultural fit is hard to measure, but Crouse’s faith in his own selection process is well founded as it turns out: in the 19 years he’s been at HSBC, he’s had just four resignations. This is no accident and, according to Crouse, is the result of a carefully developed leadership approach that was borne of experience.

‘I drive to work every morning and I think: “Which of my staff members may be unhappy? What did they say yesterday? What did I pick up on?” I think it’s a manager’s job to make their staff happy. And it’s something very important at HSBC – we’ve got something called the “Healthiest Human” system, which is basically to say that staff are the assets of the business and we have to look after them. Therefore, we have to accommodate their needs as well. If you want to work from home, work from home. In HSBC, that’s become common in the last year, but it’s always been here in legal, because legal is so easy to see – for instance, if you are working on a contract from home, it’s either going to be done or not.’

He adds: ‘The most important thing for me in my relationship between me and my team is that it is a trust relationship – I think it’s essential. They trust me completely with what they tell me – they are extremely open and honest. And I am very honest with them as well. I think this is the secret of the success of what we are doing here.’

Setting the agenda

With his department’s relationship to the rest of the bank front and centre, each year for the legal team starts with a high-level strategy meeting, which stays relatively informal and takes place off-site. This, Crouse says, is as much about getting buy-in from the team as it is about the finer, practical points of the team’s plan for the year.

‘I first get their buy-in and ensure that we are all on the same page, that they are part of the decision-making. Then, we basically work out an annual plan. I look at our customers and clients: and, to me, that’s mostly internal parties. Each year, everyone on the team will have been allocated a relationship with somebody. For instance, I might be allocated global banking, someone else may be the IT person, and another will be trade. Then, you also get two dates a year in the annual plan where you have to go and see them, with a questionnaire, asking them what they’re happy with regarding the services our team provides.’

The focus on building the profile of the team within the business is the starting point, but it also influences the approach of the team throughout the year, as Crouse explains:

‘I have two golden rules in legal.

‘The first one is that there must always be somebody here. If you’re the last person that leaves, you are not allowed to leave. There must always be a physical presence here. If the phone is ringing – be it yours or somebody else’s – you must answer it.’

‘Secondly, you must be very well prepared for meetings. It’s the only window where you can show how smart you are in front of very important people. The challenge is not to simply be friendly and accommodating. You must challenge people in a friendly manner to make the whole committee think of different options. They may not be right, but the idea is to give options and not have only the chairperson saying one thing and then everybody following. To me, that’s the essence of marketing yourself and raising your profile.’

Keeping it together

With just four resignations in the nearly 20 years Crouse has run the legal function at HSBC, it doesn’t need to be said that retention is not an issue for his team. Though not entirely unique, such retention is uncommon on in-house teams, where progression isn’t guaranteed or definitively structured in the same way it is in private practice. He attributes this to a sense of pride that has been instilled in his team:

‘Retaining talent hasn’t been tough. We do the normal investment banking work and then we do derivatives and things like that, which are not that simple, but honestly, if you’ve passed an LLB then I think you can do the work. To me, it’s more about the leadership and how you can lead and infuse and inspire your staff and – most importantly – it’s about pride. What pride do they have in their work? And I think pride is, in essence, what drives my team.

‘We’ve got such a good reputation and you hold it so dear that you don’t want to let go of it. Yes, sometimes you work 14 or 15 hours a day because of pride, which is not good, when it would have been better to say “Sorry, I can only deliver that in two days” and get extra help. So there is a negative side as well – sometimes you push yourself too hard because of pride. Sometimes you have to just calm them and say, “Okay, this is going overboard – we must now send a message that we need more staff because we are consistently working too hard.”

‘I think if you ask me “What image do I want in the bank?”, I think I have that reputation in the bank and within my team that I am really trusted. People come to me with their problems. I really honour that.’

Changes

The life of the in-house counsel often changes significantly from year to year, so to have occupied the same post for nearly 20 means that Crouse has had an unusually consistent front-row seat to changes in the company, the industry and the wider profession.

For instance, having worked at HSBC for nearly two decades, Crouse has seen chief executives come and go and, as such, has been a part of multiple sea changes within the business, and has had to learn to communicate his team’s ethos and success to a variety of personalities.

‘At HSBC, I’ve worked with four or five CEOs. Everybody had different styles. That is very important. My view, in interviews, as part of my questions – and something I honestly believe – is that EQ is more important than IQ. I think it is. If I negotiate, I must be able to read what that other person’s soft spots are, and how I should embrace them and make them see my point of view. So, basically, I have to take my glasses off and see him through his own glasses. That’s the same thing with the CEO. It’s very important that you can relate to them and they can relate to you. That you can form a trust relationship going forward. It’s essential for the CEO to trust you. The CEO trusts you, and you’re the right-hand man – you’re their legal adviser.’

Internally, Crouse also says that the role that external firms are playing in the market has changed over the years:

‘I think external panels are more expert and not so much general. I think your legal advisers in South Africa have become more generalist and not so much specialist, and you get your specialist advice from external legal firms.’

It should also be no surprise that technology has been a key driver of change over the course of Crouse’s career, and his team’s approach to external firms is no exception to this. Crouse uses an app to manage his relationship with his external firms, which tells him the general rate of each attorney and asks the user to give feedback on the attorney based on performance, whether he’ll use them again, whether their fee has changed since the last time they used them. All of this reduces overhead for Crouse and his team – a positive – but he still maintains a cautious approach when it comes to legal solutions promising cost-saving innovation.

‘HSBC is very particular about who we are dealing with. We only basically deal with very reputable legal firms where there is no reputational risk for us and no risk of bribery. It’s very easy for a legal firm to be involved in bribery in getting licences or preferable judgments. So we do a month’s due diligence on a legal firm before we have them on board. It’s unlikely that we will deal with a start-up company that we don’t know and that don’t have a reputation. It’s too difficult to get through all the layers. From a reputational point of view, we’re very hesitant to deal with start-ups.’

The marketing of legal

It is one thing to have a legal department that the general counsel knows is successful, but truly measuring that success and communicating it with the rest of the business is an important of the job for Crouse, and is integral in building the bridges with the rest of the business of which Crouse and his team are so proud.

‘I can honestly say that we are the poster-boy department – we are held in high regard.

‘Firstly, we are being recognised for prizes internationally, so that gets advertised within the bank and people respect you for that. Secondly, I do surveys twice a year. I will ask people questionnaires before the performance appraisal, and ask them what they think about the team, so I get feedback that I can monitor.

‘We also have a thing called “At Your Best” at HSBC, where everybody gets allocated a certain amount of points, and every point has got a monetary value. Let’s say everyone gets 100 points, and you can allocate that to staff that you think deserve it. And HSBC very often acknowledge the legal department.

The emphasis on ‘being seen’ that Crouse talked about before also plays a part here. He refers to it as the team’s ‘marketing strategy’ – asking questions of the business, both inside meetings and out; ensuring his staff are very well prepared for meetings internally; and ‘walking the floor’ among internal clients to have light conversation and give internal stakeholders the chance to ask questions and give feedback.

Retirement

Now that Crouse is approaching the end of his chapter at HSBC, this top-level strategy-setting has taken on a different character, and his attention turns to the future.

‘My approach has definitely changed. I have done some internal training for my successors, so I’m very confident and comfortable with that. I’ve already had an informal discussion around when I’ll start stepping back, what meetings I’ll no longer attend or what ones I’ll attend with my successor. There’s certainly a plan.’

Retirement means different things to different people but, for Crouse, it does not mean a total erasure of his working life. Crouse’s creative side has manifested itself already, with Crouse publishing a book alongside his time at HSBC in 2005. Titled Man Op Die Dak, the novel was shortlisted for the Eugene Marais Prize in 2006.

‘I’ve published one book, I’m going to write another book and have been approached by a publishing house. They’re disappointed I haven’t retired already. I look forward to that – to touching the creative side. I like the arts.’

‘I want to give back to society – I would like to get involved in schools and start training and inspiring kids. I think it’s important to inspire youngsters who you can still set into the right direction. To inspire professionals – they’re already on the right track. If I were to give back, I’d rather work with kids that you can still form and change their lives. I think it’s possible to do that.’

‘I would rather train youngsters for the corporate world. I know that’s more my strong point – to enthuse people.’

Advice to younger self, leadership

Now that Crouse is looking back on a lengthy and prolific career, what does he wish he’d known from the start, and what advice would he give to others at the start of their legal and business careers?

‘Something that I wish I’d learned at a really early stage – and that is that the corporate world is not a popularity contest. Why I’m saying that is that the younger you are, the more insecure you are, and the older you are, the more comfortable you are in your skin.’

‘But when you are in your early 30s, it’s the decade that you have to work the hardest in your career, because those are the make-or-break years. When you’re 40, you realise what you will and will not achieve, and you will make peace with it. In the 30s, you don’t know where you’re going to end, you just know the harder you work, the better the chances are.

‘If you’re insecure, you want people to like you because you think that’s essential. But how senior management see it, is that if you’re popular and if there’s a meeting and X says “Let’s do Y” and you say “Yes, I think that’s the right thing to do” and you don’t challenge that, they see you as weak. So if you want popularity and it becomes evident in meetings that you say what is expected, then senior management frown upon it. You should rather be more challenging, and try to set the meeting in a different direction. They’ll have much more respect for you and you’ll be promoted much quicker than if you just become popular. I wish I’d learned that at a younger age.’

In the coming decades, fully autonomous vehicles are set to take over the mainstream. A 2017 study released by Intel predicted that, by 2050, autonomous vehicles will represent a $7tn revenue stream worldwide. Allied Market Research projects the autonomous vehicle market to grow worldwide from $54.23bn in 2019 to $556.67bn in 2026 – suggesting that the developed world is speeding toward ubiquitous adoption of autonomous vehicles.

The signs are already there: Tesla’s driver-assistance software, Autopilot, is inching closer to true autonomy all the time; in 2019, the United Kingdom government announced its intention to have fully driverless cars on British roads by 2021; and Uber has been testing self-driving cars in the US since 2016.

Autonomous and automated vehicle (AV) technology offers compelling and innovative opportunities for individuals, business and wider society, but such opportunity is also coupled with considerable risk. Therefore, in order for AVs to develop pervasively, they must be regulated.

Speeding

Given the technology’s potential to alter the fabric of society, the rate of its development has been surprisingly fast. But the scope for disruption is so total that the purported rewards of AV technology – in the best case – are set to be similarly all-encompassing, with both the public and private sectors having much to gain.

‘There’s been no precedent in history for a technology which is attractive to both sectors,’ says Richard Threlfall, partner and global head of infrastructure at KPMG.

‘Public authorities all over the world, at national and city level, can see the huge social and economic benefits of AVs. On the other hand, you also have private sector companies who can see that there’s an entire new market opening – indeed, The Economist said it was a new US$10 trillion market emerging and companies are therefore piling in at pace. It’s that twin push and pull of both public and private interests, which is why this technology is advancing so rapidly.’

For the public sphere, the case for AV technology almost makes itself. According to the World Health Organization, around 1.35 million people are killed in road accidents every year, with 90% of these accidents being caused by driver error alone. McKinsey’s 2015 report, ‘Ten ways autonomous driving could redefine the automotive world’, suggests that AVs could diminish such deaths by a mammoth 90%.

‘Eliminating all of the deaths and other accidents on roads from human error is a big prize,’ Threlfall comments.

‘AVs are expected to be much safer than non-AV vehicles,’ says Claire Bennett, general counsel of FiveAI, a leading European software company for self-driving vehicles, which has cars already being tested and demoed on London’s public streets.

‘There were about 2501 people killed or seriously injured on London streets in 2016. [Autonomous vehicles are] never going to get tired, drunk, emotional or distracted – unlike humans.’

A 2017 report by Intel, Accelerating the Future: The Economic Impact of the Emerging Passenger Economy, predicts that autonomous driving will reduce heavy traffic and alleviate congestion on world roads by decreasing more than 250 million hours of commuting time every year and turning this extra time into productivity.

This goes beyond potentially making individual road users more efficient. AVs may develop into a more efficient road transport system, for example through fleets of autonomous taxis.

‘This could lead to less private car use, particularly in cities, and therefore fewer vehicles and less congestion on the road,’ says Nicholas Paines QC, Commissioner of the Law Commission of England and Wales.

‘Congestion is a problem,’ says Bennett. ‘Some of the figures I’ve seen, UK drivers lose an average of 170 hours a year whilst driving – that’s a ridiculous amount of time. With AVs, you could use that extra time profitably. Personal car use in London takes up nearly half of the street space but only accounts for 13% of distance travelled. That’s a real waste of space. On top of that, personal car use just isn’t sustainable and that creates a series of interconnected problems that are harming different aspects of our lives. Personal driving is bad for the planet, bad for our health and bad for our pockets. If you buy a car, it will depreciate in costs. You then have insurance costs, the servicing, fuel, MOT and tax. That’s quite a significant burden.’

Sarah Owen-Vandersluis, partner and head of public sector mobility at KPMG, notes that the declining demand for personal car ownership may be informing this change: ‘This is especially true among urban millennials, and companies have picked up on this trend. OEMs, technology companies and aggregators are together conceptualising new business models which recognise that fewer people want to own cars. Instead, they simply want to get in the vehicle and go.’

The effects of new alternative methods of transportation can already be seen, with the ride-sharing apps like Uber reaching near-ubiquity in cities across the world. Driverless cars have the potential to be similarly transformative.

‘I think we’re envisioning a future where there is the ability to use your phone to say, “I want to go to this place,” and for your phone to automatically know all the different ways that you can do that, whilst taking into account your own preferences in terms of time and cost,’ says Threlfall.

‘Once you confirm, you wouldn’t need to look at a timetable, consult a map, or pay a fare, because it’ll all be on the back office of the app, in the way that we’re used to for so many other services today.’

The future envisioned by Threlfall breaks the distinction between public and private transport, making it less likely that individuals will own their own car in favour of car use on an ad-hoc basis, where the vehicle will more likely be owned by fleet companies.

‘I think that sort of model, or more use of ride-hailing-type services is going to become prevalent. Obviously, in an AV world, you don’t even need to drive the thing, you just need to get in it and it takes you to where you want to go.’

Wrong way

However, according to counter research outlined in the Journal of Transportation Policy, there is a risk that AVs may actually add to congestion, rather than reduce it. There is concern among policymakers around the world regarding road capacity, specifically that AVs on their streets might not be an optimal scenario.

‘It comes down to how many movements you can enable in a particular period of time in a particular space. In a mass transit mode, buses, trams and trains offer far greater capacity than private vehicles, so the worst-case outcome from a city point of view is that the adoption of AVs increases the amount of private vehicle use, making congestion in cities worse,’ Threlfall notes.

Then, and perhaps more prominently, there are the concerns surrounding the safety of such vehicles. Despite the aforementioned projections showing that the technology can be used to make the roads safer, there is some latent anxiety around getting into a car that isn’t being driven by a human being.

‘It’s the risk, or rather the lack of comfort that people have around knowing that a human is not in charge. But this technology will not be permitted to go on the road unless it’s proven to be as safe as a human or, indeed, safer. There is also a danger that we don’t harness this technology and the advantages it brings, so it’s really important that we get the appropriate validation and verification systems in place to make sure that this technology is safe, and to make sure the process that underpins approving AVs is right, so that we can utilise the full benefits of this technology,’ says Bennett.

Though fully self-driving vehicles have the capability to reduce vehicle-related deaths, this outcome is not certain. While advocates insist that enhanced safety is one of the biggest draws of the technology, incidents involving self-driving vehicles tend to be well-publicised.

In 2019, a fatal crash involving a Tesla Model X made the news for happening just 10 seconds after the driver had engaged the car’s Autopilot feature. In 2018, an human-controlled Uber test vehicle operating in self-drive mode collided with and killed a pedestrian that it had failed to detect.

‘[In Uber’s case] there was both a design flaw in the machine, but also a social flaw in the supervision,’ explains Paul Thagard PhD, cognitive scientist and professor emeritus of philosophy at the University of Waterloo, specialising in ethics and AI. ‘That is where I think Uber is probably irresponsible, because it did not only have a machine that really shouldn’t have been driving around, but it also had inadequate supervision of that machine.’

Notwithstanding other successful tests taking place in closed surroundings, companies will eventually require the deployment of AVs on public roads at scale in order to establish their level of safety, thus placing members of the general public at the centre of likely hazardous research environments.

‘You can see how quickly public opinion can get nervous about the technology, but we have to hold that in perspective against the number of people who get killed on roads by human error,’ adds Threlfall.

Rules of the road

Malini Bose, a mobility policy expert in KPMG UK’s infrastructure advisory group, points out that the potential benefits and risks of AV technology ‘Are contingent on how policy and regulation evolve. Outcomes are not predetermined. It’s only with the right policies and right regulation that the right incentives can be created.’

Indeed, as the technology is advanced almost entirely by the private sector, lawmakers around the world are having to adapt nearly in tandem, either by updating the pre-existing standards or creating a new legislative structure for when fully autonomous vehicles finally grace our roads.

Richard Threlfall oversees KPMG’s Autonomous Vehicles Readiness Index (AVRI), which ranks 25 countries on their readiness for the oncoming autonomous vehicle revolution, assessing each based on four pillars: policy and legislation; technology and innovation; infrastructure; and consumer experience.

The Netherlands ranks first, having announced a legal framework for autonomous driving in 2018 that allows AVs to be tested on public roads without drivers, and for being proactive in assessing how AVs can assist the country’s freight industry. The next best countries are Singapore, Norway, and the United States.

Despite ranking just seventh overall, the United Kingdom posted the second best score in AVRI’s ‘policy and legislation’ category, thanks to a number of initiatives taken by UK lawmakers to further the country’s AV agenda. For example, the Automated and Electric Vehicles (AEV) Act was passed into law in July 2018, establishing that liability for accident or damage rests with the insurer of the vehicle. If the AV is not insured, then the owner of the AV will be liable for any accident.

‘Westminster’s focus on Brexit last year has not been particularly helpful in passing any legislation, let alone for AVs. But, given the recent election results, we hope to have a bit more movement,’ says Bennett.

‘We’ve been trying to educate policymakers and influencers about this technology. This includes working with the Law Commission to try to make sure that the right environment is created to encourage the safe expansion of this technology. The Law Commission’s first consultation paper on AVs in 2018 refers to our “Certification of Highly Automated Vehicles for Use on UK Roads” paper and the Law Commission’s report on the outcome of this consultation paper makes multiple references to our views. As one of the leading AV tech companies in Europe working in this area, we believe we can help this process,’ says Bennett.

Responsible driving

One specific legal question raised by AV technology is how the removal of the human element impacts the overall chain of liability when things go wrong.

Paines QC outlines how the Law Commission’s Consultation Paper 1 addresses who should have what criminal and civil liability, in a world where a car does not have a driver.

‘We analysed various civil and criminal liabilities that exist in connection with AVs and motoring. We looked at the liabilities that are imposed on the driver, because we had to rearrange those where there won’t be a driver, and made provisional proposals as to how those liabilities should be reallocated. We focused on the criminal side of things, because the AEV Act has already done a lot of work in reorganising the civil liability – basically by placing liability on the insurer who compensates the victim and can then make claims against people who can be proved to be legally responsible for an accident.’

‘On the criminal side, we looked at the range of offences that can be committed by a driver. These fall into two broad compartments. There are the ones about the way in which you drive: speed limits and shooting red lights. But there are other offences which don’t relate to a driver’s manner of driving: like the offence of driving without insurance, driving without MOT or road tax. Under the current system, the reason why the driver has those responsibilities is because they are the person that causes the car to venture onto the road. But, where you haven’t got a driver, somebody else has got to be responsible.’

‘Another new framework that we are contemplating is the ongoing safety monitoring once these vehicles are on the roads. This involves a range of measures, including data collection to better understand performance and the creation of an accident investigation branch to investigate accidents which are caused by malfunctioning AV systems, in order to learn lessons for the future.’

There is a large supposition that automated driving systems (ADSs) will proceed to advance until the user has little-to-no contribution to road safety. This transfers liability for most road accidents from the driver to the ADS vehicle manufacturing supply chain. Considering a situation where there is an accident on the road involving an AV with no user in charge, where would liability fall?

The UK’s introduction of the aforementioned world-first AV insurance legislation is distinct from that of most of the EU (and world) in that it requires that the driver be insured rather than the vehicle itself. The UK Act neatly deals with the issues surrounding AV liability by effectively placing a requirement for insurers to deal with all claims, whilst retaining both the right of recovery against manufacturers and the right to exclude liability where an individual fails to keep their AV and ADS software up to date. This allows the normal and established process of the courts to then allow the insurer to take action against any party they think can be reasonably held responsible.

‘That feels like quite an easy solution to me. Other countries have been slower to look at this issue. The UK, by looking quite carefully at this issue, will start to become the lead in terms of where other countries go on this,’ Threlfall remarks.

Where a user is only in full automation mode for part of the journey (under the classification of ‘user in charge’), they will only be responsible for the driving they do before and after the automation.

‘We think that cars which are not capable of self-driving in all circumstances should have a user in charge, explains Paines QC.

‘The plan is that they won’t be responsible for the driving whilst the car is self-driving – on a motorway, for example. They obviously will be responsible for the driving that they do before and after the motorway, and we reckon that they’re the right person to have wider responsibilities, such as ensuring that the car has its tax, insurance, and is roadworthy and so forth.’

‘With regards to a highly automated road passenger service, operators of these services would carry all the legal responsibilities.’

With the introduction of a new and revised chain of liability, the role of lawyers within the case handling is also set to change.

‘The established business that lies around driver insurance and the role of lawyers in disputes between insurance companies will almost certainly completely disappear. It will be replaced with more of a business-to-business-liability-type profession,’ comments Threlfall.

‘I think the insurance sector is quite worried about how AVs will affect the insurance industry,’ says Bose. ‘Given the sheer range of uncertainties involved, pre-determined laws by themselves are not going to be exhaustive. Lawyers are going to have to navigate through everyone from manufacturers, to insurers and to users in charge, in order to write contracts and provide the necessary legal support.’

Roads

The future that is delivered by AV technology will depend on the answers to these questions. The technology exists at a nexus between public and private concerns – safety, practicality, ethics – and both spheres have their role to play. But Thagard argues that this nexus shouldn’t be forgotten, and that a principled approach should be taken when deciding how to develop, regulate and deploy this technology.

‘The principle is “need not greed.” The danger in these cases is that you’ve obviously got commercial companies regulated by profit, which is legitimate, but there is also a grave danger that human needs will be neglected. The greed for profit will lead to companies rushing out products which are simply not ready to deal with all the physical and social conditions that driving involves.’

With the cosmetic beauty industry valued at US$532bn worldwide (according to a 2019 report by retail researcher Edited), the beauty industry is growing at a rate far greater than ever before. It’s no surprise that this industry offers gargantuan profits for businesses all around the globe. But, as the general sale of personal beauty products has increased and continues to increase year by year, the same can be said about replicated counterfeit cosmetics – now a considerable industry in itself.

Aside from the obvious health risks that counterfeit cosmetics pose to consumers, fake makeup also represents considerable legal risks – especially in the new age of e-commerce – for cosmetic brand manufacturers, merchandisers, and retailers alike. To that end, the in-house legal teams in this industry are of paramount importance.

The growth of knock-offs

Given the mammoth financial opportunities counterfeit makeup offers, it’s no wonder that counterfeiters are taking advantage of this growing market. Although precise figures for black market sales are hard to come by, Statista reported that the counterfeit cosmetic and personal care industry cost retailers €1.9bn in 2015.

‘At the core of all counterfeits, it’s very economic. It’s a very dark forum of competition,’ says Corey Judson, in-house lawyer at Huda Beauty.

‘Makeup is very unique to counterfeiters because it’s very quickly transformational. People really like that quality of it: to go, within a matter of minutes, to feeling much more beautiful. It’s almost intoxicating. To do that at a very cheap price point motivates counterfeiters whilst motivating the counterfeit market.’

The surge of bloggers now sharing tutorials on social media platforms such as Instagram and YouTube has transformed the means by which shoppers find new products and interact with cosmetic brands. This means that social media platforms are no longer for social sharing alone, but are now closely tied to the direct consumption of products.

But just as social media is playing a key role in the cosmetics ecosystem, so too is it helping fuel the industry’s black market. According to Red Points’ 2018 research, social media contributes to over 50% of counterfeit cosmetic sales. Facebook alone constitutes a whopping 42.1% of those counterfeit sales (with eBay and Instagram following suit at 30.4% and 9.2% respectively).

‘Social media purchasing is a huge trend right now. You can find your favourite makeup YouTuber or Instagram artist and buy their makeup products from them directly. Counterfeiters can then comment on an Instagram or YouTube post saying “Check out my site” for these materials and they’ll have similar materials to what the artist is using in a good video and they’ll link it to counterfeit cosmetics. Within just one click, you’re exposed to buying counterfeit for an artist that you really like and that you’re following on Instagram,’ comments Judson.

Huda Beauty is emblematic of the cosmetics industry in the 21st century. The eponymous founder initially launched a beauty blog before eventually launching her own cosmetics line, amassing 40.9 million followers on Instagram, 3.78 million subscribers on YouTube, and earning roughly $30m in 2018. But as a brand in part borne out of the successful leveraging of social media platforms, it must also grapple with a black market that is making use of the same platforms, but for the wrong reasons.

‘As prolific as our Instagram account is, we have tens of thousands of comments on every single thing we post. Our social media team regulate the comments for a lot of different reasons, and counterfeits are definitely one of them. We often comb Instagram and Facebook for new counterfeit products. They show up quite quickly, so we have a really good relationship with the social platforms. We petition them to take certain sites, pictures and videos down – it’s a big deal for the platforms too that this material, for integrity, is not showing up on their website either. They’re very reactive with us,’ explains Judson.

‘I think one of the things that is driving the popularity of counterfeits is the ease of transactions – it’s very simple for a consumer to just go online and shop for a deal that’s too good to be true, so it’s probably counterfeit,’ comments Ashli Weiss Uğurlu, legal counsel for intellectual property, marketing and advertising at Benefit Cosmetics.

‘Online sales are driving the popularity of counterfeits. It’s easy for a seller to hide the fact that the goods are counterfeit by using an image of an authentic product.’ With counterfeiters increasingly relying on the use of e-commerce to sell and distribute counterfeited goods, particularly on online marketplaces – auction and trading websites such as eBay, Alibaba and Amazon in particular – counterfeit cosmetics are flooding in from all over the world. This means that companies whose products are the subject of counterfeiting often have weak legal recourse when it comes to penalising counterfeiters.

Dangerous business

The personal damage caused by knock-off beauty products cannot be ignored. Fake cosmetics are generally produced under unregulated, unsanitary and contaminated conditions. Given the nature and intended uses of the product, effects of contaminated fakes can be devastating, with reports of rashes, infections and permanent scarring not uncommon.

‘I never know what’s in a counterfeit product, and that’s what scares me,’ comments Weiss Uğurlu.

‘We’ve done tests with counterfeits and they’ve come back with arsenic and asbestos, impure talc. It’s really scary,’ says Judson.

‘When you buy a Deciem product, there’s a lot of science going into creating the formula and selecting the ingredients used,’ says Dan Johnson, general counsel at Deciem, which owns and operates more than 10 beauty brands worldwide.

‘We take a lot of care to make sure that if you are buying a product from us you are getting a top-notch quality product. You lose all of this when selecting a counterfeit product.’

The harm generated by counterfeit cosmetics is not only limited to health risks for the consumer: by stealing respected brand trademarks, black market counterfeiters deny brand companies their entitled revenue stemming from decades of market research and development and billions of dollars spent on the final product.

‘Counterfeits in general have a negative economic effect. There’s fewer taxes collected from rights holders, fewer jobs, lots of lost revenue,’ notes Piotr Stryszowski, senior economist at the OECD’s Public Governance Directorate. Stryszowski manages the OECD task force on countering elicit trade.

Counter-counterfeiting

As e-commerce continues to revolutionise the way consumers shop, the barriers standing in the way of brands getting their product into consumer’s hands have never been lower. Unfortunately, this applies to illicit manufacturers also. In light of that, how can cosmetics brands protect their profits, reputation, and the safety of their customers? The answer namely concerns copyright and trademark rights.

‘Trademarks and customs are the bread and butter of counterfeit defence and enforcement,’ notes Judson.

‘We’re adamant about registering our trademarks and copyrights globally. If a counterfeiter is using our registered trademark, this is a direct infringement,’ says Weiss Uğurlu.

Trademark rights are usually considered to be distinctive to each nation or jurisdiction in which they are acquired. Cosmetics companies and brands usually obtain international trademark rights, which encompass a variety of rights across several countries and jurisdictions. However, as noted by the International Trademark Association, ‘the existence and enforceability of these rights are unique to each country or jurisdiction and, generally, not interdependent.’

‘We have a very large trademark portfolio. Protecting our rights is extremely important because our packaging is very simple – it’s not that hard for somebody to create confusingly similar packaging, so we are very quick to be in market, enforcing our legal rights to make sure that the assets that we have invested in and are building, are protected,’ comments Johnson.

But the efficacy of legal protections is contingent on being able to identify infringers in the first place – a difficult proposition when markets are being flooded with fakes by small-scale operations run from countries without robust intellectual property protections, if the origin is known at all.

‘The key is really understanding that counterfeiting is naturally going to occur and then catching it,’ Johnson continues.

‘Once you identify that, there are tools to enforce your rights. The challenge is that if the people who are doing it are a fly-by-night operation, they will just shut down operations and move on somewhere else. But my sense is that, if you’re aware of it, and it’s an operation that’s big enough where the person doing it has real financial weight behind them, then you can get some traction.’

‘The biggest issue that we’re facing is identifying the individual behind the counterfeit online seller account,’ notes Weiss Uğurlu.

‘It’s difficult, because a counterfeit online seller often uses fake information for their name, address, phone number, etc. Accurate personal information is crucial in the development of a case. The data we collect is passed off to law enforcement, who depend upon the accuracy of the information, so that they either continue building the case or move forward with a raid and/or prosecution.’

Enforcement, however, is only one component of the anti-counterfeiting effort.

By making cheaper and often hazardous black-market products, counterfeiters also cause substantial harm to the brand of companies whose products they counterfeit, and curtail consumer loyalty as a consequence. In recognition of the impact that fake products can have on a brand’s reputation, leading cosmetic brands have now increasingly taken specific measures to combat the growing prevalence of counterfeit products.

French heavyweight (and parent company to Benefit Cosmetics) LVMH is one of the world’s most counterfeited brands. LVMH boasts a huge intellectual property department based in Paris, employs over 250 agents globally, and manages over 12,000 intellectual property rights comprising trademarks and copyrights. Thousands of anti-counterfeiting raids are performed on behalf of LVMH each year, with such teams working with both national and international law enforcement agencies to uncover counterfeiters.

And the effort begins even earlier than that, according to Judson at Huda Beauty, who says that educating customs agents globally has proven to be an effective first line of defence for brand companies seizing counterfeits.

‘Customs are the first ones to intercept international trade – especially when things are suspiciously coming from China and India. It’s a great initial defence when making sure these things don’t spread onto the market,’ he notes.

‘We file our registered trademarks and provide training to customs offices in several countries to help officers recognise and seize counterfeits that may cross through their borders,’ explains Weiss Uğurlu.

‘We also work with law enforcement and attorneys in various countries to prosecute counterfeiters both criminally, which can include seizing counterfeit products in warehouses or at storefronts, and through civil cases, where we rescind some of the funds that sellers made through counterfeit sales.’

Judson agrees: ‘Once we have the Huda Beauty trademark, the first thing we do is take it to customs. We make sure they’re aware of it. Last year, I went to Saudi Arabia and completed a three-city tour of training customs officials on how to differentiate genuine Huda Beauty products from the counterfeits. It was very successful – we started getting a lot of notifications from them after that.’

Fake beauty

However, legal protections that allow companies to enforce their rights differ hugely from region to region.

‘There are lots of differences when it comes to consumer protection, penalty schemes, or when it comes to even protection of right holders, but unfortunately these differences are exploited by counterfeiters who know how to target these weak spots when choosing their operations,’ comments Stryszowski.

‘We have the same general goals and objectives with counterfeiting enforcement, but the procedure behind doing that is wildly different country to country. And so that’s kind of the importance of having really good trusted local counsel throughout the world that can advise on the particulars of enforcement in that country,’ notes Judson.

‘Within Benefit Cosmetics, we will take a case pretty much anywhere,’ explains Weiss Uğurlu.

‘For the most part, the major economies of the world have laws in place to criminally enforce against the sale of counterfeit, but it’s helpful to know which government agency to partner with and the nuances of each. For example, in China we partner with the AIC or PSB, in the UK we reach out to Trading Standards, and in the US we have had great help from local law enforcement and HSI. In addition to maintaining relationships with individuals within each of these agencies, some helpful nuances include knowing the different monetary threshold of counterfeit sales for an agency to take the case, and the differentiating factor of your product that the agency is keen towards, for example, is there a healthy and safety hazard tied to your product?’

Johnson at Deciem echoes this sentiment: ‘We have global trademark protections and we have local partners that are really helpful in understanding cultural and legal challenges and opportunities, but I just find that we need to be very understanding of unique attributes of different jurisdictions, and one-size-fits-all doesn’t always work given the dynamics of each jurisdiction.’

Bargain hunt

Regardless of the ever-increasing expense necessitated by fake cosmetics and the dangerous safety risks that they pose to consumers, there is still a gap between the ambitions of various regulatory frameworks and the resources committed by agencies around the world to achieving them.

‘There is legislation in most cases addressing the counterfeit problem in detail. But what we are lacking are the efficient resources needed to be put into enforcement, and ensuring that necessary agencies will be capable of addressing counterfeits through efficient collaboration and information exchange,’ says Stryszowski.

There are several reasons as to why enforcement isn’t always top priority for those agencies on the front line of tackling counterfeit cosmetics.

‘The competing priorities of existing agencies that are in charge of anti-counterfeiting relates to the lack of enforcement. They have other things to do.

‘Take customs for example: they have a long list of things to focus on, like revenue collection and checking for narcotics. Their working day is only 24 hours, so they only have a specific amount of time and resources to tackle counterfeiting as an issue,’ says Stryszowski.

‘The second problem is that effective action against counterfeiting requires international collaboration. Right now, we don’t see efficient collaboration channels between dedicated agencies in countries who would be working solely on counterfeiting on a daily basis and actually trading information swiftly and coordinating the action in an efficient way,’ he adds.

‘It’s not something that I see as being a top priority for government or regulators. They seem to be more concerned about the claims we are making about our products. But, it goes without saying that we are grateful and willing to collaborate with governments. Working collaboratively with governments and regulators is a really important issue, but it also depends on the local government to see where it fits in with their priorities as well,’ says Johnson.

The creation of such an international collaboration forum may be a long way off.

‘If we see collaboration happening, it will be in certain areas related to anti-counterfeiting actions. For example, here at the OECD, we are working on addressing the problem of misuse of free trade zones. But it’s hard to really animate and then coordinate a general anti-counterfeiting enforcement action,’ notes Stryszowski.

Education

It is in the interests of cosmetics brands to educate consumers on the counterfeit market – not least of all because the purchase of counterfeit goods can be illegal, as it is in the United States. Furthermore, if consumers can be shown how to identify and avoid fakes themselves, a large part of the market for knock-offs will disappear.

‘We at Deciem also have a “Customer Happiness” team, which is a resource that consumers can contact and ask about any suspected counterfeit products. We also encourage customers to buy products directly from Deciem, to ensure the product they are receiving is genuine,’ explains Johnson.

‘The benefit of doing that is if you raise with them an outlet that’s not valid, then it’s on our radar. And then we can act on it as well. Being aware is the key to being safe. A bit of scepticism should be always there when you go to an unknown store and you see a damaged box of cosmetics, or when you go online and check out a website of an unknown origin with cosmetics at an astonishingly low price,’ suggests Stryszowski.

‘Always buy from an authorised retailer. If you’re unable to buy from an authorised retailer, stay away from deals online that are too good to be true. In other words, if you’re seeing a product marked down more than 50% from retail price, that’s a red flag right there that something is wrong with this product,’ adds Weiss Uğurlu.

‘If a consumer suspects the product is a counterfeit, they must not use it. For example, if you got a pill from a pharmacy and it didn’t look right, you would never just take it – the same thing is true for cosmetics,’ states Judson.

‘The number one thing is to know the retail channels. Huda Beauty only sells in a handful of retailers and our own online store. So there’s basically a 0% chance that retailer will also be selling counterfeit product. So if you’re at the right retailer, you shouldn’t have to worry at all.’

‘So long as they don’t buy it, they don’t create a market for it – and if there’s no market for it, it’s not going to be produced in the first place. I think what people don’t internalise a lot with counterfeits, is that when you buy them, you’re supporting a business that inherently engages in illegal activity. If what they’re producing is illegal, the business they run is illegal. It’s not just that you’re getting a discount, but you’re actually contributing to a really terrible cycle of crime.’

The Legal 500 is a proud member of the Association of Corporate Counsel Alliance, and the latest survey of chief legal officers has been released. Drawn from interviews with 1,007 participants from 20 industries across 47 countries, the CLO Survey gives a unique insight into the current state of corporate legal departments.

‘As the role continues to evolve, CLOs need to think about the future on multiple levels,’ said Veta T. Richardson, ACC president and CEO.

‘Fundamental challenges such as increasing regulations, data privacy and digital transformation are not going anywhere. But today’s most effective CLOs are also focused on being strategic business partners, navigating business and legal risks, and supporting organisations to deliver greater value to their customers.’

The key findings from the report are as follows:

The CLO’s role and reach

Four in five CLOs surveyed report directly to the CEO: A five-year high, which reflects the growing importance for CLOs to have a seat at the executive table.

Compliance and risk are the top two corporate functions that report to the CLO: Over three-quarters of CLOs surveyed oversee compliance and more than one-third are in charge of risk management.

One-third anticipate outsourcing more work to law firms next year: Although departments are pressured to do more with less and insource work, the number of CLOs expecting to outsource more work to law firms remains stable.

The legal department’s value to the business

Business leaders consult with the CLO, but there is still room to advance: While 75% of CLOs report that executives almost always look to them for input on strategic decisions and risk areas, less than half regularly attend board executive sessions.

Compliance, data privacy, and security are the most important issues for businesses: These three topics continue to top the list of most relevant issues with no change from 2019.

The CLO has a multifaceted profile: lawyer and business leader: CLOs spend on average around one-third of their time providing legal advice. The rest is dedicated to managing the department, board matters and corporate governance, contributing to strategy development, and advising executives on non-legal issues.

Leadership and business aptitudes are the most desired non-legal skills for in-house counsel: 62% of respondents expect in-house counsel to demonstrate leadership capabilities. Business management and executive presence complete the top three most desired non-legal skills.

The political and regulatory landscape

New regulations and data protection issues expected to pose the biggest legal challenges: Around six in ten CLOs believe that new industry-specific regulations and data protection and privacy rules are likely to be the cause for future legal concerns, while 36% indicated that mergers and acquisitions will also create challenges.

Companies are ready to face new regulations and mitigate emerging risks: 60% of CLOs are very or moderately confident that their organisation can keep track of changing regulations and 54% believe that they are ready to tackle new risk threats.

Regulatory compliance spend is up: 58% of CLOs indicated that expenditure on regulatory compliance increased in the last year, with accommodation and food services, wholesale trade, and finance and banking reporting the highest percentages across all industries.

Geopolitical events have limited effect on organisational decisions: Around one-third of CLOs indicated that geopolitics triggered changes in the company’s plans to enter new markets, and in insurance and employee safety policies. Overall, the impact of geopolitical events was lower compared with 2017.

The outlook for the legal department

CLOs are implementing new technologies to improve efficiency: More than half of respondents either plan to adopt a new technological solution or have already done so recently. By generation, 48% of baby boomers are keen on adopting new technology solutions compared with 56% of millennial CLOs.

Use of artificial intelligence expected to accelerate: 69% of CLOs expect the use of artificial intelligence in legal technology applications to accelerate, while just 7% believe it is a temporary trend.

Delivering value to customers is now a priority over maximising profits: 50% of CLOs ranked delivering value to customers as their organisation’s top priority over the next five years. Maximising profits came second, with 35%, and investing in employees ranked third, with 10% of CLOs identifying this as their company’s top priority.

For further information, email: [email protected]

To view the full report, go to: acc.com/clo2020

Over 122 countries prohibit sexual harassment in the workplace and 116 extend this protection to both women and men. In the aftermath of the #MeToo movement, employers are, more than ever, acutely aware of the global risks posed by sexual harassment. These include individual and corporate reputational damage, the risk of litigation, vicarious liability (in some legal systems) and criminal proceedings, as well as a negative impact on staff productivity, recruitment and retention.

Businesses have acted to strengthen workplace policies, introduce training and reinforce a culture of dignity and respect. Yet surveys around the world consistently suggest that sexual harassment remains under-reported in the workplace.

A recent UK poll found that two-thirds of Britons who have been harassed in the workplace failed to report their experience to anyone. This is undermining the effectiveness of workplace policies which, typically, depend on reporting to tackle issues and prevent a reoccurrence.

In this article we highlight some key issues when managing global harassment investigations, and review the latest legal developments, to support employers in their efforts to build employee trust in reporting and to reduce sexual harassment in all jurisdictions.

Managing global sexual harassment investigations – lessons learnt

Investigating sexual harassment across different jurisdictions needs careful handling, both legally and culturally.

Legal pitfalls

Some countries have procedural requirements that can wrong-foot the unwary. These may mandate the appointment of specific bodies or people to investigate complaints, such as an Internal Complaints Committee in India which must be constituted with a minimum number of female members.

Déborah Attali, employment partner in Eversheds Sutherland’s Paris office, says that employers should take care to involve the works council in French sexual harassment complaints.

‘Generally, the works council members must be informed of the complaint and involved in the investigation process. As such, the complaint is “on the record”.’

Similarly, in Germany, Frank Achilles, employment partner in Eversheds Sutherland’s Munich office, warns employers conducting sexual harassment investigations ‘to beware of triggering fixed timescales within which a dismissal must take effect in order to be lawful. This means that the investigation should commence as quickly as reasonably possible, with the alleged perpetrator interviewed last. The risk being that a dismissed employee may seek reinstatement if the dismissal is not handled carefully.’

Data privacy rules also differ across countries and non-compliance, particularly across the EU, risks significant penalties. As such, employers gathering evidence as part of an investigation must consider the lawfulness of accessing CCTV images, personal messages on a work device or other personal data. A recent Swiss court decision illustrates the difficulties for employers. The court held that an employer acted unlawfully when reviewing private WhatsApp messages on a business mobile phone. It decided that unless the employer had clearly communicated the rules around the personal use of work devices, then employees had reasonable expectations of privacy, even on a business mobile phone.

Cultural challenges

Workplace culture, particularly where operations are dispersed globally, far from the head office location, must also be addressed if businesses are to change behaviour. In our experience, the appetite to raise and address issues can vary and unless the business establishes a global standard of behaviour that is universally applied in local contracts of employment and workplace rules, it can be difficult to ensure consistency of approach.

Local resistance to sexual harassment investigations can also arise where the alleged perpetrator is a key performer or leader in the business. It may want to retain the employee, despite the misconduct. While #MeToo has helped to shift the debate on these issues, bringing in an independent investigator can also help to achieve an appropriate outcome.

An enduring cultural challenge is giving local staff the confidence to speak up, wherever they are in the world and whatever the size or structure of the local team. Employers should not assume that the number of complaints is an accurate reflection of the level of harassment happening in a country. Even if a business’s head office has launched sexual harassment policies and training, employees may not feel sufficiently secure to raise a complaint if the complaint involves a local manager who has the power to dismiss or to influence their career.

Other factors may also come into play, as Jennifer Van Dale, Eversheds Sutherland employment partner in Hong Kong explains.

‘Power dynamics can make it very difficult for employees to challenge their boss, and this can be made more difficult in some countries if the topic is socially taboo, such as sex.’

Monitoring the effectiveness of policies and taking proactive steps to detect harassment will help to identify any warning signs or hotspots. For example, employers should check what is happening in practice by conducting anonymised staff surveys, asking questions at exit interviews, analysing absence data and canvassing views through mentoring programmes and staff networks.

Recent legal developments in sexual harassment

The fallout from #MeToo has also galvanised legal change. In 2019, the right of everyone to work free from violence and harassment was agreed in an international treaty (the ILO Violence and Harassment Convention) and will be progressively ratified by the 187 International Labour Organisation member states.

A number of themes have emerged globally from those countries that have implemented or proposed new harassment-related legislation. One such theme is restricting or eliminating the use of confidentiality/non-disclosure agreements (NDAs). Whilst it is recognised that there may be legitimate reasons to use such agreements to the benefit of both parties, the concern is that they can be used inappropriately to cover up issues of harassment and silence victims, resulting in hidden systemic issues within an organisation not being tackled and eliminated, with risk to other workers.

For example, in the US state of New Jersey, legislation now prevents the enforcement of certain non-disclosure provisions contained in employment contracts and settlement agreements. Other states have also passed laws banning mandatory arbitration for sexual harassment claims. In the UK, legislative proposals provide that confidentiality agreements will be legally ineffective to prevent disclosures to certain organisations, including law enforcement agencies.

Another emerging theme is to place a greater responsibility on employers to take action to prevent sexual harassment from occurring. In some US states there are new requirements for a sexual harassment prevention policy that meets minimum prescribed requirements, including revamping existing employee training or introducing new training.

Recent legislation in Denmark clarified what might constitute sexual harassment, which necessitates employers reviewing workplace norms against the new standard, and new government guidance requires employers to complete a written risk assessment on harassment in the workplace. In Romania, employers are now obliged to implement an internal policy aimed at eliminating harassment at work. Hong Kong has also recently expanded the scope of protection against sexual harassment in the workplace, with a new code of practice issued by the Equal Opportunities Commission. In the UK, developments have taken the form of proposals for a legal duty to prevent harassment and a statutory code of conduct to help employers understand and demonstrate that they have taken all reasonable steps.

Greater transparency, through corporate disclosures, is also on the rise. For example, in Canada, amended legislation has been proposed to ensure that employers respond effectively to incidents of alleged harassment, including mandatory recording and reporting obligations. In some US states, disclosure of settlements, and whether such settlements included a NDA, will be required.

However, legislative developments to protect against harassment have not been globally universal and, despite the significant impact of #MeToo in a number of countries, less traction has been experienced in others. For example, in some countries in Asia, criminal proceedings are the only legal recourse, which may contribute to workplace harassment going unchallenged.

Comment

With legal change ongoing in different countries and sexual harassment controversies continuing to attract public attention, employers around the world are advised to be vigilant and to regularly review their policies and training.

To maintain investor confidence, staff morale and avoid brand damage, employers will be expected to demonstrate a genuine commitment to eliminating sexual harassment in the workplace and ensuring wider issues of inequality are tackled. Achieving this will typically require a long-term focus on creating and maintaining trusted reporting frameworks, on ensuring an appropriate workplace culture and on the effectiveness of policies across all operations, whatever the location, including taking appropriate action if harassment is found to have occurred.

Beginning in June 2019 with a series of uncontrolled blazes, Australia’s bushfire season – since dubbed the ‘Black Summer’ – has spiralled into one of the worst on record in the country, causing widespread devastation to communities and wildlife.

By the end of January 2020, the fires had claimed more than 30 lives, burned through millions of acres of bush, forest and parks, and led to the deaths of an estimated one billion animals – with fears that some endangered species have been driven to extinction by the disaster. Over 2,000 homes have been destroyed and countless communities evacuated by the unprecedented ferocity of the bushfires. Smoke from the flames has caused disruption to major metropolitan areas such as Canberra, Sydney and Melbourne, with the air quality in Australian cities sinking to among the lowest in the world at various points throughout the crisis.

The crisis has impacted all sectors, as businesses, government organisations and charities were called into action to battle the flames – either on the front lines, or behind the scenes. With the legal function playing an ever-increasing role in the management of crises of all kinds, in-house lawyers throughout Australia are diligently working to play their part in the management and mitigation of the unfolding disaster.

Feeling the heat

The scale of wreckage caused by the fast-moving Australian bushfires has been catastrophic, and has placed a lot of pressure upon organisations involved in the relief effort. But, for general counsel on the ground, their response to the tragedy has been similar to that of any crisis.

‘The bushfires are no different to any other crisis that in-house lawyers can face. I have worked in other industries throughout my career and this is no different. Crisis is something that is faced by all in-house lawyers at some point in their careers,’ says Tara Eaton, head of legal and policy at Australian Red Cross.

Australian Red Cross is a humanitarian and community services charity that has raised over AU$127m towards the bushfire disaster relief effort.

‘At the Red Cross, we do have an existing framework within the team and we build on that during times of crisis. For example, the team is set up to have a lawyer dedicated to a particular department – with that, we are able to build stronger relationships,’ says Eaton.

‘Therefore, in a crisis, different departments within our organisation immediately think of legal. They get you involved in the crisis management team from the beginning and, because of that, you are abreast of issues as they develop, you are part of the team that sits on daily, or even sometimes multiple times a day, update calls.’

The pressure to deliver timely, accurate and efficient legal advice is well-covered ground for in-house counsel, but in times of crisis, where life is at stake, this imperative only intensifies, explains Eaton.

‘One of the most challenging things in a crisis is being able to provide ad hoc legal advice. Not knowing all the information, but still having to make a call on things because the issues are moving so quickly, is difficult. One of the greatest skills for in-house counsel everywhere is the ability to trust your gut,’ she says.

‘This is a necessary skill in a crisis. Having knowledge of your industry, business and the requirements to make decisions is essential to providing the best guidance you can at any particular time. So we have been doing that as a team, as the bushfires have been developing. We have been issuing daily emails to support our colleagues, saying here is today’s legal guidance, and we build on that as the team faces additional questions.’

‘During a crisis, general counsel need to show compassion and understanding for members of their organisation, while maintaining a clear head and providing objective legal advice under pressure,’ agrees Katrina Bullock, general counsel at Greenpeace Australia.

‘This requires resilience, a strong support network and self-care.’

Also feeling the pressure to provide speedy legal advice during this crisis is Sarah Donald, general counsel of Sunshine Coast Council. The Sunshine Coast is just one of many local councils across the eastern seaboard of Australia that have felt the devastating effects of the bushfires.

‘The recent bushfires presented unprecedented challenge to our community, with the immediate evacuation and displacement of thousands of people,’ says Donald.

‘It is absolutely necessary to provide ad hoc legal advice in response to a crisis situation.’

Sow the seeds

With times of crisis adding more layers of pressure to lawyers already grappling with the demands of the in-house job, steps taken pre-crisis can go a long way to ensuring the response to disaster situations is efficient and as stress-free as possible. Having systems in place aimed at mitigating risk during times of crisis is essential to providing effective legal advice.

‘Bushfires are not uncommon in Australia,’ says Donald.

‘As a result, significant systems are in place to manage these events. In Queensland, these are managed pursuant to the Queensland Disaster Management Act 2003. This Act outlines the principles of disaster management in Queensland.’

Provisions under the Act provide a legal framework for local councils during times of crisis, covering the disaster response capabilities required of local government and the training required of those involved in disaster management.

‘Local government is responsible for managing disaster events in our local areas, and this is done through our Local Disaster Management Group (LDMG). Our LDMG is coordinated by the Sunshine Coast Council, and membership is made up of liaisons from all emergency agencies (police, fire, ambulance, State Emergency Services), as well as community service providers (both government and non-government) and media representatives,’ outlines Donald.

‘The Council and in particular our disaster management team, works very hard to ensure we have excellent relationships with our emergency services partners, so we are able to have seamless operations when we are required to activate our disaster management plans and coordination centre in response to events affecting our region. These relationships were essential when we were managing the recent bushfires in our region.’

The importance of cultivating relationships extends to external counsel to whom the legal team can turn when crises demand specialised legal advice, fast.

‘You may be called on to give urgent advice on specialist areas that are not necessarily within your own expertise – then it is good to have good relationships with advisers that you can call on quickly,’ explains Astrid Heward, general counsel and general manager at the Bureau of Meteorology in Australia.

‘For example, I’m no expert in industrial relations, so I have a couple of advisers I trust that I can call to bounce things off quickly.’

However, when time is of the essence, it is ultimately up to in-house legal teams to make initial assessments and provide preliminary legal advice in times of crisis.

‘Our external firms have been very supportive, but in a crisis you do not have a lot of time to go out to external counsel,’ says Eaton.

‘I have always described the role of in-house counsel as being a GP: we diagnose the head colds, the broken ankles, and then decide if we need to go out and see an ear, nose and throat surgeon. But we as in-house counsel are doing the first diagnosis of what is wrong.’

In the end, whether seeking guidance from external advisers or relying on internal resources, general counsel depend upon on the relationships they have developed.

‘To me, it boils down to relationships – we as lawyers work really closely with our colleagues to understand the issues that arise, and then work with them to find solutions,’ says Eaton.

‘It is important for in-house counsel to not become the department of “no” – of course we have to be that in this role sometimes – but particularly pointed in a crisis are the relationships you have built that enable you to have a seat at the table. Your practical guidance can be implemented very easily in a crisis; because you do not have a lot of time, you do not have the ability to come up with new policies and procedures – you just have time to give short, sharp guidance to help.’

Where there’s smoke there’s fire

Managing the legal efforts from the skies is Heward at the Bureau of Meteorology (BOM), an executive agency within the Australian government responsible for compiling weather forecasts, warnings and observations and delivering them to the Australian public.

‘The Bureau’s mission is “to provide trusted, reliable and responsive weather, water, climate, and ocean services for Australia – all day, every day”, and Bureau staff have a very strong sense of public service,’ explains Heward.

‘The majority of the work that my team does to support our operational groups during the extreme weather season in fact happens when Australia is not in its “severe weather season”.’

Australia’s severe weather season traditionally occurs in spring and summer, and features weather events such as drought, severe thunderstorms, flooding, tropical cyclones and bushfires.

‘A key factor in the success of the emergency service response to the bushfire crisis is the collaboration and co-ordination between the various agencies that are involved in the response effort. The legal team supports this with MoUs [Memorandum of Understanding]/agreements that facilitate the Bureau’s meteorologists to be embedded in the emergency services as required in extreme weather events.’

Nevertheless, as with many crises, planning can only take you so far. Severe weather is, by its nature, extremely volatile. Emergency situations are inevitable. When adversities such as the devastating Australian bushfires occur, general counsel are relied upon to provide fast, accurate and essential legal advice.

‘If I am called upon to give urgent advice, I try to keep an eye on the bigger picture, and the risk levels, to understand how the advice needs to be prepared and presented. It’s obviously important to give the right answer, but “right and done” is better than “perfect”,’ outlines Heward.

‘One of the most challenging issues that arose in my role over the last couple of months related to the Meteorological Authority Office. Under the Civil Aviation Regulations, the Bureau’s CEO is able to authorise equipment to be used to provide reports for use in forecasts for the purposes of civil aviation.’

Thick plumes of smoke that wafted into cities had an adverse effect on the visibility of crucial airport services. Providing visibility reports are essential. However, equipment used to provide such reports was not always regulatory compliant to measure smoke particles.

‘Existing runway visual range (RVR) equipment at certain airports in Australia was already authorised for the purposes of providing reports in relation to fog/mist, but not for other types of lithometeor particles (such as smoke),’ says Heward.

‘Due to the serious smoke haze experienced at these airports, the Met Authority team had to work urgently to manage the complex regulatory and technical matters that allowed for the RVR equipment to also be authorised for smoke.’

Paved with good intentions

On the ground, in-house counsel are supporting organisations dealing directly with the physical fallout caused by the bushfires. Life-or-death videos from inside the inferno have been viewed by millions of people across the globe, with the destruction sparking an outpouring of donations from those eager to help – both financially, and otherwise.

‘The images of the bushfires have been broadcast worldwide,’ explains Eaton.

‘The world is a much smaller place because of the speed in which news travels and just the outpouring of support from Australia has been phenomenal, as well as the outpouring from all parts of the world: Mongolia, Estonia, and the US – every corner of the world knows about the bushfires and wants to help. This is humanity in action.’

Greenpeace Australia has also drawn attention and support to the cause.

‘We raised over $74,000 on behalf of the Rural Fire Service to support their work in battling the fires on the ground,’ says Bullock.

‘Additionally, we have provided a platform for bushfire survivors to tell their stories to the world, and our creative team has been busy documenting the destruction of homes and nature to help people truly understand the effects of climate-related emergencies.’

The response of people wanting to donate to the cause has been overwhelming, and has been helped by social media. But, while undoubtedly positive, charity in the 21st century raises unique questions that must be addressed by legal teams such as Eaton’s.

‘A lot of the issues that we have been working through relate to the proliferation of social media and people sharing our fundraising links,’ she explains.

‘This is therefore raising questions: can we accept donations from overseas? What are our limitations with respect to the donations? How do I characterise those donations? Could we be considered fundraising in other jurisdictions? If so, what does that mean?’

‘Coming up with this guidance in the online space can be very difficult, because you might have one link in Australia which now can be shared globally. Nowadays, those issues are just tricky for all businesses to navigate.’

‘This is not just relevant to us in this particular situation – talking about disasters – but I am sure many other legal counsels are faced with the issue of how do we make our laws, which are jurisdictionally based, relevant to a global online environment.’

Overcoming this challenge, Eaton focused on drawing legal similarities to other similar situations.

‘How I characterise this is similar to a financial services organisation,’ she says.

‘When they are running an IPO, you are getting money from the public to do something – namely, an IPO is aligned to accepting donations from the public – and with that comes great responsibility to make sure you are telling people accurately where that money is going, how that money is being spent, and where those funds are going to be allocated.’

‘So one of the more tricky issues we have been managing is around the social media response and global organisations wanting to fundraise on our behalf – what does that mean from a regulatory perspective?’

As in-house counsel operating on the front lines, crisis management should be viewed through multiple lenses, stresses Eaton.

‘Part of our role, I think, as legal is to not only approach things through a legal lens but, in times of emergencies, to also bring a different focus. By looking at it through the eyes of our donors – our very extraordinarily generous donors – as well as the community, we have to consider: what are their expectations? What are the needs of the community we are trying to serve? How are we balancing those needs? How are we trying to do the most good we can, and support people in this challenging time? All whilst making sure we have all the checks and balances in place.’

At your own risk

Whether battling the fallout of a financial meltdown, supply chain interruption or environmental disaster – such as the Australian bushfires – crisis management is a core skill for general counsel, irrespective of the industry they represent. Counsel will be relied upon to give efficient, fast and accurate legal advice during emergencies, and play a key role in navigating the business through complex regulatory challenges and obstacles in times of disaster.

Despite having to overcome major legal obstacles, the scope of legal work can be rewarding for those on the front lines, believes Eaton.

‘It has been fascinating, actually. One of the things I love about being in-house is the diversity of work that we are faced with on a daily basis, and when there is a disaster, such as the bush fires, it has really come to the fore.’

Nearly $1bn was invested in legal technology and New Law disruptors in 2018. That was across more than 50 funding rounds and included start-ups through to more established players, according to research from Investec. Venture capital, private equity, non-legal companies and trade buyers are increasingly interested in what they see as a highly lucrative legal sector.

The frequency and scope of legal tech funding has also jumped markedly: a Thomson Reuters report in mid-2017 put investment into UK legal tech start-ups at just £16m in the previous 18 months. Hundreds of legal tech companies have subsequently popped up. Every law firm is quick to tout its latest innovation or partnership with a technology provider, while some even have incubators where they work with start-ups over several months, honing products.

But the adoption of legal tech and automation tools by in-house legal departments is harder to track. Many general counsel complain it is difficult to deduce the substance from the noise, believing in-house tech solutions largely fall into the latter camp. Others are more upbeat on progress made over the last few years: ‘There’s been a shift,’ comments easyJet group GC and company secretary Maaike de Bie. ‘Where tech and automation were once looked at by some in-house legal teams, they are now definitely mainstream.’

The growing influence and prevalence of in-house legal operations teams, continued pressure on budgets and a desire to improve the quality of work for in-house lawyers are all contributing to the change. There is no shortage of vendors looking to crack the in-house market either. With this in mind, we surveyed 70 legal departments and spoke to more than two dozen GCs to assess how much progress has been made with legal tech; what is being used and what for; the major barriers to adoption; and expectations for the future.

With two-thirds of in-house teams reporting they have no dedicated annual budget for legal tech and a third not currently exploring new tools, the conversation is shifting from what is out there to how teams can make use of existing technology and the importance of the broader digital transformation triumvirate of people, process and technology.

‘Technology is a facilitator and part of a solution. It is never in and of itself a solution to a problem,’ says Pearson associate GC for technology and operations, Robert Mignanelli. ‘You first have to scope your problem, understand what you’re trying to solve and then find a piece of technology that can help automate and drive that.’

Going mainstream

GCs constantly talk about running their legal teams like a business. To do that, however, you need to know exactly the nature of that business. Document management systems, workflow tools, e-billing solutions and management information services have existed for many years, but there has been a rapid evolution and increasing sophistication of these products. They have crucially become more user-friendly too.

Broadly, there has been an increase in basic management tools that are not necessarily cutting edge but vital to running a department. Increasingly, the point has been about finding systems that can talk to others so that, for instance, your workflow tool and document management system work in tandem. As an example, Neota Logic – which offers document management, expertise automation and workflow automation all in one platform – finds many legal departments need to start with a simple triage application to work out exactly what their department has to deal with on a daily basis and route those requests to the right people.

‘It’s changed rapidly,’ notes UBS investment bank and EMEA GC Simon Croxford. ‘I’m a big fan of the technology and process efficiency developments we’re seeing in the industry, because there is a lot that we can improve in our legal departments to become more efficient.’

Meanwhile, Barclays has integrated its matter management, e-billing, time recording and external legal spend tracker over the past three years. Head of legal transformation Ben Eason comments: ‘We’ve taken the time and the effort to do that, even if it’s not deemed the fancy work. That enables you then to start looking at stuff like AI.’

The consensus is that using tech has moved from rhetoric to action, particularly for larger in-house teams. At Vodafone Business, the FTSE 100 telecoms company’s B2B arm, legal director Kerry Phillip implemented a contract lifecycle platform three years ago. There are more than 60,000 searchable contracts on that system now, used across ten countries, while the workflow tool sends work directly to the relevant team. Phillip says that at the time it was first used, however, Vodafone was an outlier: ‘It is now accepted you need to do it and there are a huge range of providers out there. It’s unusual not to be thinking about or implementing some form of tech, which was not the case three years ago.’

As a further sign of growth, Thomson Reuters made a significant play in this area with the mid-2019 acquisition of secure file-sharing and collaboration platform HighQ for a reported £200m. HighQ sells to both law firms and in-house legal departments, marketing itself to the latter as a tool for streamlining operations. There has also been a boom in contract tools, broadly split into pre and post-signature analysis: contract review, due diligence, contract lifecycle management and understanding the data within contracts. Israel-based contract review automation company LawGeex, which announced a partnership with Neota Logic to automate a third-party non-disclosure agreement (NDA) approval process, is cited by multiple GCs. Liberty Mutual Insurance innovation director for corporate legal, Jeffrey Marple, comments: ‘In the last year or so there’s been a massive explosion in the contract space. Based on the number of products, there must be a market, because they seem to be popping up everywhere.’

Trainline GC and director of regulatory affairs Neil Murrin adds: ‘What you’ve got now is a lot of market entrants and that’s driving competition among providers, but we are still in a period of development. Certainly with some of the AI and legal tech we’ve used, we’ve been the guinea pigs.’

Back to basics

Automation of repetitive, low-value work has become more commonplace in-house, however. Tools for automating NDAs and self-service tools are widely provided by GCs as examples of successful recent tech projects. Just over a third of the in-house legal teams surveyed say they use tools to automate contract and data management, while NDAs and other forms and templates are automated by 8% and 14% respectively.

ICICI Bank UK GC Priti Shetty has introduced an internal chatbot, developed by the business itself. It is used to identify which clauses are important and do not necessarily need to be fielded by in-house lawyers. Sheldon Renkema, general manager of legal for Australian retail conglomerate Wesfarmers, used AI automation platform Neota Logic to build marketing review and contract review tools. The former is used to educate the business about the most important aspects of marketing campaigns from a legal perspective, a built-in response to the team being asked the same questions repeatedly. The latter, meanwhile, ensures contract owners in the business provide the legal team with relevant background data and context.

‘We’re looking at further opportunities for self-service tools, but you’ve got to do that quite cautiously because the personal relationship is super important,’ he comments. ‘It means we get a seat at the table because we are helping people, and have closer relationships, and get involved earlier on, which makes our lives easier.’

Many GCs are also not convinced their legal teams need to use specific legal tech products. ‘It’s not all about AI and complicated sounding terminology – at one of the biggest tech companies in the world, I have found that the most basic tools can transform how lawyers service their client teams,’ Facebook associate GC Caroline Kenny comments. ‘We use document-sharing tools like Google Docs and Quip, which clients can feed into in real time, saving the back and forth and duplication. These things are not specific to legal teams.’

Anglo American head of legal for M&A, Samantha Thompson, joined the FTSE 100 mining company at the end of last year. In March, she took on an optimisation and innovation role with a mandate to assess legal tech offerings. She quickly learned that the legal department was better placed to optimise use of existing tools within the organisation as a priority, such as Microsoft Office 365, rather than bespoke legal tech. That has involved talking to the company’s IT team to put the legal function forward for any upcoming pilots in areas such as document management. ‘What has struck me is there are an awful lot of different options out there, and people are trying to sell me things, and want to talk about legal tech,’ she comments. ‘I stepped back and said: “Lawyers don’t necessarily have special needs – we need to optimise the tech that we’ve got.”’

It is a common sentiment, with many GCs referencing Office 365 in particular, including those at blue-chip corporates Pearson, Centrica, Vodafone, Aviva, Spire, Three and easyJet. Most highlight it as an intuitive collaboration platform, while group communication tools such as Microsoft Teams are also widely used. Former Royal Mail GC de Bie, who joined easyJet in mid-2019, says when she is looking at tech, her first thought is not whether there is a tool on the market, but whether she can improve the process around the problem first and whether it can be solved by existing tools within the company. ‘Is there something I can adapt that works already within the enterprise environment, rather than bringing in another tool into the already many applications that many organisations have? The more you bring in, the more you are introducing complexity and risk.’

Aviva’s head of legal operations, Caroline Brown, adds: ‘While there are a lot of nuanced tools out there, there are also lots of non-legal tools we’ve been able to use. We’re looking at working with Microsoft to roll out Office 365 and we’re finding it to be an intuitive tool. People have been able to pick up the features easily, which raises the bar for other technology platforms on things like file and document sharing.’

Three GC and regulatory affairs director Stephen Lerner has similarly turned to a non-legal tech solution provided by Microsoft, using business analytics tool Power BI. Three years ago, he hired four non-lawyer business analysts and IT experts into his legal, commercial and regulatory affairs team of 130 staff. That team is tasked with using Power BI to mine internal data and track things such as resource optimisation – how many matters are coming into the legal function and how they are staffed. ‘It took probably a year or so to get it right, but now I can open up this tool on my desktop any time and see what demand is coming through the department, and how we are staffed to meet that,’ he comments. Similar outcomes can be achieved with an application built in by Neota Logic using its analytics component on its platform to access the various requests coming into the legal department.

GCs also say the people aspect is more important than the technology. Digital training programmes and the employment of non-lawyer professionals or lawyers with wider skillsets are firmly on the agenda. At the beginning of 2018, UBS kick-started an in-house legal team transformation and digitisation programme. Croxford says there has been a focus on enabling its lawyers to talk technology. This has manifested in a number of ways, including an in-house academy to educate lawyers in areas such as digital literacy – understanding the technology it uses and how it impacts the business. But there are softer aspects, such as sitting product-focused lawyers with data privacy and technology lawyers so they can mix ideas.

‘There are lawyers who exist with data and tech skills or exist with product skills, but the market hasn’t developed to the point where it’s doing what we’re trying to do, which is combine the two,’ he comments. ‘To be a successful in-house lawyer nowadays you need a variety of different skills that were rarely needed five years ago and definitely not ten years ago.’

Making the case

It is clear why GCs turn to existing company tools for solutions. The cost of legal tech, and finding ways to articulate the business case and expected returns, is regularly cited as a major obstacle to adoption. Of the third of survey respondents to report a dedicated budget for legal technology, most were at 10% or less of their overall legal spend. Many GCs say the cost of much legal tech has been prohibitively expensive, although it is improving, while establishing which metrics show return on investment remains difficult.

Two-thirds say their company’s IT department is involved in the decision-making process for implementing technology, with procurement and the C-suite involved for a third each as well. But for half of the survey’s respondents, less than 50% of their legal spend is on outside counsel. They are therefore looking for ways to reduce internal costs. Phoenix Group GC Quentin Zentner, who uses legal spend-tracking software Apperio, comments: ‘Securing a budget is key. You need a good, plausible business case. It was easier to secure approval by making the proposed technology spend part of a wider cost-cutting initiative.’

Liberty’s Marple comments: ‘Technology providers claim to save you money on x, y, and z, and they probably will, but unfortunately we may not have a clear understanding of the possible savings. You do all the research and analysis you can up front, but sometimes you just have to hold your breath and jump in, and hopefully it works out.’

There is also a sense that much legal tech offers solutions to non-existent problems and does not easily connect to existing tech infrastructure. ‘A lot of the solutions out there are looking for a problem. All legal departments are different and the tech all seems to be a bit one-size- fits-all,’ Spire GC and group company secretary Dan Toner comments. ‘The tech needs to come from the demand side. The cost of it is dropping rapidly, but it’s working out how much it works with our tech, and it’s getting the time and the head space to put work into it.’

Adds Anglo American’s Thompson: ‘The impression I get is people are just struggling with the number of products out there and it’s not clear that there’s a market leader or someone with longevity, or that there’s even a need for the niche tech.’ This is where the increasing prevalence of operations professionals within legal teams comes in. Only 33% of those surveyed have a legal operations role within their team, but many of those achieving tangible results with tech have done so through legal ops. Guardian Media Group GC and company secretary Stephen Godsell comments: ‘The great value of operations is that it gives somebody the task of driving change in a way that it’s their day-to-day job. Lawyers are very busy and there’s not a lot of space to investigate how we can do things differently.’

Neota, a no-code AI automation platform targeting professional services companies, is just about to launch a web-based tool called Canvas, which allows subject-matter experts, such as lawyers, to prototype apps for automating legal services. Vice president, markets and growth, Jackson Liu, says demand from in-house legal teams for technology has increased, led by the larger North American market, but with EMEA and Asia-Pacific growing quickly. Legal operations teams – which have featured in the US market for longer – led process improvements, with many now looking to add technology to those.

‘They’re now looking for a platform, an off-the-shelf solution, to look at how they can implement automation capabilities on top of those new processes. Having a separate team focus on the process and technology side in legal operations is good because it separates that from the legal counsel team, which means they’re not dragged away from the day-to-day tasks.’

GCs are also leaning on their law firm advisers to use technology to provide more efficient, and cheaper, services. There is a transparency issue on that side as well, however, with GCs unclear on what law firms offer, despite the bevvy of press releases each pushes regarding their innovation credentials. Anglo American group GC Richard Price comments: ‘They’re all talking about it and they’re all looking at it, and they’re talking to us about how they might be able to use tech in a way to optimise the service that they provide to us, but we’re yet to see significant applications of that.’

Others are more optimistic. UBS talks to the firms that run innovation and tech incubators to keep an eye on developments. Croxford sees the growth of managed service and contracting teams at some firms as an important development too. ‘It’s not just the sourcing of legal advice but how we run our departments as well. That’s the next evolution of relationships between banks and external law firms.’

Demonstrating value

The GC100 group, made up of more than 125 GCs and company secretaries primarily from the FTSE 100, has put tech growth and adoption onto its agenda. Everybody is keen to share and get a grip on the market. ‘Everyone assumes that they’re far behind and everyone else is much further ahead, and it’s helpful to talk to our peers to understand we’re all just trying to get our arms around it,’ Price comments.

There is undoubted appetite, and need, for in-house legal departments to adopt tech. There are multiple examples of early success in automating volume work, while many teams are now tracking data on their use of internal and external resource. That resulting data is where many GCs see the next wave of advancement. Analytics and then true AI and machine learning – despite the prevalent scepticism – will be used by GCs to understand their workflow and allow it to be optimised. More AI solutions aimed at interpreting and creating legal documents and contracts are expected to pop up as well.

But GCs are keen to pull the conversation away from a focus on pure technology, and back to a broader emphasis on how that fits in with people and teams. They are analysing whether they have the right people in the right locations, the right levels of seniority, and then whether they are doing the right work. ‘To run a truly successful and efficient department, technology helps you get there, but it’s not the be-all and end-all,’ Croxford comments.

Adds de Bie: ‘I’m a big fan of data. Business colleagues are used to presenting data and level of risk, and I don’t see any reason why we as a legal team cannot do the same. I’ve really seen the value of collecting data to demonstrate value.’