If you are in-house counsel and are not paying attention to government officials and regulators (state, local, federal, international) you are making a big mistake. A company acts at its peril (e.g., Google, Microsoft, etc.) if it underestimates the importance of being aware of what various government regulators are up to or thinking. Your company can be impacted dramatically (good or bad) by what happens through government action (or inaction). Government action can come in many forms, e.g., taxation, new rules and regulations (business-specific or general), government sanctions, import-export controls, legal reform (tort law, patent law), merger control, data privacy/security, public company regulation, and dozens of other areas. Recently, I have read articles on potential new action around patent reform, product regulation outside the United States, data privacy, Internet/net neutrality, Fair Labor Standards Act regulations, and potential new regulations of financial advisors. Depending on your company’s business, some of these issues could have a direct impact on the bottom-line. In short, some part of your company’s business is affected daily by government action (or inaction) either in or outside your home country To be a truly effective in-house lawyer, you need to be on top of this important area. Moreover, being attuned to positive and negative governmental developments is an area where you and the legal function can add great value to the company and show strategic vision.
In my last job, the government affairs team was part of the legal department and all of the company’s government relations work and strategy came through the legal. We worked domestically and internationally, dealing with government officials and regulators in the United States, Canada, South America, the Middle East, Asia, and Europe. Your company may not have a formal government relations office set up or it may not report into the legal function. Regardless, as in-house counsel, you should look to stay up to speed on what various governmental or regulatory bodies are doing and consider being part of any effort your company may want or need to make to influence the outcome. This edition of “Ten Things” will set out some basics of running an effective government affairs campaign. To keep things simple, I will focus on the United States but the points below generally apply anywhere.
- Set the table with government officials. One of the most effective things you can do in the area of government relations is to meet with officials before there is a problem. Meaning, make time to simply introduce yourself and your business to local, state, and national government officials with no “ask” on the line. For example, if your business is regulated by the Department of Transportation or the Federal Communications Commission, make time to meet the regulators and explain your business to them and give them a point of contact in the event they ever have questions. Or meet with the U.S. Trade Representative. Likewise, establish relationships with the offices of key Congressional members (e.g., your state’s delegation or the Chairs of key committees that can impact your business). If you operate internationally, almost all U.S. embassies have a commercial interests section. They are more than happy to meet with you and get a sense of how your business operates in that country (and can be helpful in the event you run into problems in that country or need to understand the “lay of the land”). Finally, don’t forget your local and state officials. The governor’s office, the mayor, the city council, etc. will typically all be willing to meet with you to get to know a company operating in their states/towns.
- Identify your issue(s). If you have a formal government affairs department, part of their job is to keep an eye out for regulatory actions, new laws, hearings, and other matters that could impact your company (there are other things they do as well but we’ll save that for a future post). If you don’t have a formal department, or just to supplement your government affairs team, develop your own resources to stay on top of new issues. Newspapers, web sites, government-related publications, blogs, television, newsletters, word of mouth, and trade associations can all be valuable sources of information about what’s going on in Washington, internationally, or locally. You should regularly and systematically sort through all of your information sources to spot issues (tax laws, trade, patent reform, export restrictions, etc.). You’ll want to stay close to your business partners and the CEO/CFO (or the General Counsel if that’s not you already) to help identify the issues worth spending time on. You will need to prioritize issues as you probably cannot devote time and resources to every issue you spot. Your or the department should start out each year with a list of potential government-related issues you’d like to tackle (and be prepared to change your list as circumstances warrant throughout the year).
- Build a coalition/Go solo? Once you have identified your issue(s), you should think about whether it makes sense to go forward alone or as part of a larger group. For simple issues, say your company is opposed to its home-town changing a zoning law near your offices, you’re probably fine going forward alone. If the issue is more complicated, or more controversial (e.g., the company does not want to be seen by itself as against or for the particular issue), you will want to build or join a coalition of similarly minded businesses/organizations. This can be as simple as working through an existing trade association your company belongs to, or as complicated as building a coalition “of the willing” from scratch. If you go the latter route, you will start with companies that operate similar businesses as they are most likely to have the same viewpoint on the issue (and petitioning the government is a proper way competitors can act together). Next, think of companies outside your competitive circle that would have a similar interest in the outcome of the issue (e.g., customers, vendors, e-commerce companies generally, etc.). Additionally, you may be able to link your coalition or trade association up with other trade associations, coalitions, or public policy organizations that support your position. The key is to spend time thinking about who might be your allies in your campaign (and it may not always be the most obvious businesses) and build your circle outward. The rub of being part of a coalition, however, is that it will require a good deal of compromise as you’ll need to accommodate the different needs and risk tolerance of each coalition member. It will not be “your way or the highway” unless you want your participation in the coalition to be short-lived.
- What’s the end goal? Before you launch your campaign you need to get agreement from the interested parties (internal or your coalition) as to the end goal. How do you measure success? Is it passing a new law or seeing a proposed law fail? Is it to get a few simple changes made to a proposed regulation or a wholesale rewrite? Is it to see a government regulator take action in some manner or keep the regulator on the sidelines? And no matter what your goal is, prepare yourself (and your business team) upfront to be frustrated. It is difficult to get the government to take an action you want, be it passing a bill or writing a new regulation. You will find things rarely happen quickly. It will be inch by inch. It may take years to reach your goal (if ever). As my wise government affairs director once told me, “It’s way easier to stop something than to pass something.” So, go into this with your eyes open and your patience level set at “high” (and be sure your executive team understands this point as well).
- How many resources do you need to expend? Depending on the importance of the issue, you must determine how much money, manpower, and time you and the company are willing to spend. It may be just a letter to your city council representative, or it may be a sophisticated effort that includes mass and social media, economic experts, public relations teams, lawyers, lobbyists, and other professionals. If it’s the latter, being part of a coalition can help spread the cost around while dramatically increasing the ability to bring resources to bear on your issue. And not all contributions to a coalition are money. Sometimes coalition members bring subject matter expertise or the willingness to draft materials or take on other tasks where the cost is manpower vs. writing a check. Regardless, you will want to stay close to your business leaders so they understand and agree with the costs and effort involved in any particular campaign (or the value/cost/trade-offs of doing nothing).
- Communications campaign. All government affairs campaigns need some type of media or communications strategy. It can range from an “OpEd” by your CEO in the local newspaper to a professionally built website dedicated to your issue with materials written by experts, FAQs, press releases, call to action, Twitter feed, Facebook page, blogs, and other sophisticated media tools and techniques. Keep in mind that many effective media materials can be prepared in-house. Your corporate communications or marketing departments can be very helpful here and usually welcome the chance to get involved. Also, you probably have noticed that the more sophisticated government affairs campaigns usually have a clever “name”, something positive and catchy like “Americans for Faster Internet Access” or “The Coalition for Fair Taxation.” If your campaign is worthy of a name, use care in selecting the name so as not to give negative images or unintended meanings (e.g., acronyms can really come back to bite you).
- Key activities. In addition to a communications campaign, there are several other activities you will want to consider undertaking as part of your effort:
- Plan on wearing out some shoe leather as part of an effective campaign. There is no substitute for meeting with officials, legislators, regulators, staff members, etc. to press your point. This will include identifying the best people to meet with and may even include meeting with people who you think might be/are opposed to your position as there is always a chance you can change their mind on the issue or keep them neutral in the process, i.e., they are not actively working against you. You will need to determine who from your company or coalition will be present at any meetings. The importance of the issue may require your CEO to attend for example. Who attends a meeting sends an important message to the folks in government you are meeting with, so be thoughtful here.
- You will typically want materials to hand out at your meetings. There are two main types of written materials. The first is a short “leave-behind” piece that highlights the issues and “the ask” (i.e., what you want the official to do). We called this a “one-pager” because the ideal length is one page (or as close to that as you can get). The second is a “white paper.” A white paper is a lengthy and detailed discussion of the issues and “the ask.” It will often contain detailed legal analysis or economic analysis usually prepared by an attorney or outside expert (e.g., an economist). The length, level of detail, and content of a white paper will depend on the issue. It will generally be costly to put together but there are times, especially when dealing with complicated regulations or regulatory action, that you will need a white paper to encourage or discourage action on the part of the government. Remember that anything you give to public officials will most likely become public or can become public.
- You may want to or be asked to draft sample legislation (i.e., the text of the law or amendment or regulation you want to see implemented or changed).
- There may be hearings held on the issue. If so, you should consider having someone testify either in person (most effective) or by drafting testimony that will be entered into the official record. If you have someone testify in person, ensure they are well-spoken, well-versed in the issues, and are comfortable speaking and presenting in public. Having the wrong person testify can undo all of the good you may have otherwise accomplished.
- Figure out who outside the government is opposed to your positions and why. You may be able to convince them otherwise, you may be able to reach common ground on acceptable compromises that enable you to join forces, or you may just have to agree to disagree. At a minimum, you will want to understand the arguments in opposition to your views and figure out how to best respond to them as they will come up as you go forward.
- Grassroots. Politicians and regulators listen to citizens. Voices count, and the more voices supporting your position the better. Consequently, getting citizens involved through meetings, testimony, phone calls, emails, letters, petitions, etc., can be tremendously helpful. This is called a “grassroots” campaign. Consider asking your employees to engage and make it easy for them to (a) understand why the issue was important to the success of the company and (b) sign a petition or send an email/write their Congressional delegation. Think about asking customers, vendors, others to get involved. For example, you can put a link on your consumer-facing websites with information about the issue and easy ways for people to get involved. You can also work to create general public interest about your issue via many mechanisms, including social media like Twitter and Facebook, through short web videos, through press releases, or other media events. Above all, keep your message simple and be sure you include a call to action so that people who want to get involved know how to make their voice heard. A good example of grassroots is the Ebay Main Street website and the emails they send out several times a year asking people to get involved on key issues.
- Use of consultants. There are times when you will need professional help with a campaign and you will need to seriously consider hiring a lobbyist, i.e., a professional with relationships and/or expertise needed for your particular issue. Lobbyists can be extremely valuable additions to your campaign and part of your planning should be dedicated to thinking about whether or not you need such help. Lobbyists will be able to help you put together the strategy (including all of the items mentioned above), will know which officials and staff members are the most important to speak with about your issue, and can help you understand the arcane twists of the governmental process, including how legislation makes it out of committee and to a vote (it’s a lot more complicated than Schoolhouse Rock led you to believe). A close second is a professional public relations firm to help develop and execute your communications strategy. Using consultants will be costly. A coalition can help reduce these costs by sharing them across members.
- Know the rules. As you develop your campaign, be sure you (and/or your coalition) understand the legal boundaries. Companies with active government affairs efforts usually have some type of Political Action Committee (PAC) to make contributions. You need to be sure that any and all donations — and the operation of the PAC — are done well within the rules of the road. There will be limits on things as simple as lunches, even token gifts. You will need to be well versed in anti-bribery laws around the globe (especially if you have employees on the ground in foreign jurisdictions who may be involved in your campaign). Finally, if you are working with competitors you will need to be cognizant of competition law issues. If you’re serious about government affairs, you will want to take some professional advice from a law firm or other entity that specializes in the nuances of campaign financing and anti-bribery issues. Take this part seriously as the damage to reputation and other harm that can come from not following the rules is huge.
A well-run government affairs group or campaign can help your company succeed in the business world. It takes hard work, patience, strategic vision, and a good deal of creativity to be successful. All skills in-house lawyers have or should have. Stay in touch with and on top of governmental issues that could affect your company and take steps to ensure that your company makes informed decisions about whether to get involved and, if so, what steps are needed to have the best chance of success.
February 17, 2015
(If you find this blog useful, please pass along to colleagues or friends and/or “Tweet” it. “Ten Things” is not legal advice or legal opinion. It is intended to provide practical tips and references to the busy in-house practitioner and other readers. You can find this blog and all past posts at http://www.TenThings.net or www.sterlingmiller2014.wordpress.com. You can follow me on Twitter: @10ThingsLegal)