Ten Things: The “Strategic” In-House Lawyer

As we come to the end of 2019, I wanted to write about an issue I hear a lot about.  In fact, in many of my conversations with in-house counsel, this is the number one topic, i.e., “how do I become a strategic in-house lawyer?”  While sometimes this is a self-generated concern, it arises mostly because someone (the CEO, the General Counsel, or whomever) told the lawyer during an annual review or another setting that they need to be more “strategic” with their thinking.  Sadly, that is typically about the extent of it, that is, “be more strategic.  Now go forth and sin no more.” From personal experience, I can tell you that receiving such a command from your boss without more is about as useful as a mud fence in a rainstorm.  But, as many in-house lawyers are learning, it is not enough to be an excellent lawyer with deep legal skills and institutional knowledge.  That just gets you to the table.  The business wants more out of its in-house legal department, especially from the general counsel and other senior members of the legal team.  They want you to be “part of the business” and they want you to be “strategic.”  Unfortunately, no one teaches you how to be strategic in law school – at least not when I was there.  For most, you just sort of figure it out as you go along.  That was my method.  I cannot tell you that I figured out the magical incantation that makes you a strategic thinker, but I have learned many relevant lessons over the years.  This edition of “Ten Things” shares my thoughts on how to become a strategic in-house lawyer:

1.  What does “strategic” mean?  Let’s start by trying to figure out what “strategic” even means in the context of in-house lawyers.  While in-house counsel need to be strategic about legal matters, the business is not really asking you for that when they ask you to be more strategic.  Rather, it means that you are thinking strategically about the company and its business goals and objectives while you work (more on this below). By doing so, you can influence the business beyond just everyday legal issues.  A simple test is whether people on the business side seek you out for advice about operating the business (not just legal issues per se), e.g., “Should we do X?” or “What do you think about Y?” More importantly, they are often following your advice.  If not, you need to figure out how you can start helping to mold the discussion and the debate around business issues by weighing in with your own thoughts versus just looking to spot legal issues and engaging on that basis only.  A strategic lawyer does both.

2.  Learn the business.  I know this seems a little obvious, but learning deeply about the business you work for is the first step to becoming a strategic lawyer.  I am often surprised by in-house lawyers who take very little interest in really learning their company’s business.  Nevertheless, it is impossible to think strategically without a thorough understanding of a) how your company makes money; b) its products and services; c) its important customers and vendors; d) its competitors; and e) its business plans and strategy.  Ask yourself right now if you feel you have mastered all of these.  Would you bet a million dollars on it?  If not, you have a ways to go on the journey to strategic lawyer-ness.  Here are some ways you can start to master these topics:

• Read company strategy documents.
• Read company business plans.
• Read all press releases and public filings (if any).  For more depth and insight, read the public filings of your company’s main competitors.
• Read board slides.
• Ask for demos of company products and services.
• Meet with the heads of different business units and staff groups and ask them about the marketplace, their competitors, strategy, etc. (most will be flattered you asked for time).  The same for meeting with senior members of the legal department who often have their finger on the pulse of the company.
• Read analyst reports about your company (if any).
• Identify industry publications, newsletters, blogs, etc. and add those to your daily reading.
• Ask someone in Finance to walk you through the most recent financial statements (P&L, cash flow, and the balance sheet) and share their thoughts about how the company has positioned itself in the marketplace and what they think it should be doing to become more profitable.
• Be well-read generally, i.e., read for fun and knowledge.  Read books and general news magazines.  Read several newspapers every day (not word-for-word, but at least to scan for stories that might be of interest to your business).  You can use this general knowledge in several ways, including spotting non-legal opportunities to raise when the time is right and building and enhancing your personal relationships with your business colleagues (just by being a well-informed conversationalist).

If you are not sure how to go about getting access to company materials, ask your manager or others in the legal department.  They should be more than willing to help you get started. If not, ask people in the business for what they can share and check with your corporate communications team, strategy group, and investor relations folks to see what they can provide.  The resources are out there, you just need to be willing to get your hands dirty and dig around for them.

3.  Sharpen your financial acumen.  I have a saying I live by, “The language of business is numbers.  Learn the language or perish.”  Apocalyptic prophecy aside, it is pretty damn important that all in-house lawyers have a basic understanding of finance.  There is virtually no way to be a strategic thinker in the business world without it.  This doesn’t mean you need to have an MBA (though that would be very helpful actually),[1] but you need to be comfortable around numbers and you need to understand your company’s numbers, i.e., its profit & loss statement, cash flow statement, and balance sheet.  I have written about basic finance for in-house lawyers in a past blog.  Click here to read it.  As noted above, finding a friend in Finance who can help you make a better sense of what your company’s numbers mean is equally important.  Treat someone to coffee or lunch and ask them to walk you through the numbers and what they mean for the business.

4.  Develop relationships.  As you may be able to tell, developing personal relationships with senior members of the management team is essential to learning to become strategic.  Not only will you obtain updates and insight into the business, but it is also much more likely that – as your relationship becomes more personal – these colleagues will view you as a sounding board and collaborator in the business vs. just a lawyer they need to deal with on legal issues.  Plus, lots of business gets done at your company outside of meetings and emails.  To the extent possible, you should develop personal relationships with every member of the C-Suite or their equivalents at your level (as eventually these people will advance up the chain just like you and building the relationships now will pay off down the road).  A helpful trick someone once taught me is to find out who the CEO, CFO, or whoever relies on the most and set out to develop a strong relationship with that person as they are generally “in the know” and an influencer within the company. Make yourself someone that person comes to and relies on. Further, while seeking out lunches, coffees, and one-on-one meetings are top of mind, don’t forget to ask if you can attend their staff meetings (regularly or on occasion).  This is where you really learn a lot about what is going on with their business unit/staff group.

5.  Move beyond the tactical – make time to think.  Remember, doing your day job is just the ticket for admission.  There is nothing particularly strategic – in this context – about day-to-day lawyer work.  For the most part, it is just tactical.  To be strategic you need to pull away from just ticking things off your to-do list and managing the operations of your team.  The first step is to carve out time each day to think – 15 to 30 minutes blocked out on your calendar to just churn on a new problem, something you have read, or whatever. In particular, you want to think about the business generally and about generating or protecting shareholder value, the latter being core to any business’s overall strategy.  This is important because, in the messy ooze that makes up the typically in-house lawyer’s day, we tend to rely on muscle memory when faced with whatever comes up, i.e., we stick to legal issues and we look to solve those legal issues in same method and manner as we always have.  This is the antithesis of being strategic. In other words, you need to start thinking differently.  When a new issue or problem arises, making time to really think about it and its impact on the company (good or bad) is a critical step to being strategic. What is involved? Who is involved?  What are all the options?  What are the risks and benefits of any particular path? (More on this checklist below).  Keep in mind that you are not confined by your job title here.  This means thinking about – and weighing in on – issues, problems, and opportunities in ways that go beyond merely “legal.”  I will set out some examples below, but the obvious one here is to speak up on non-legal concerns at meetings.  You are a smart person and you likely have views and opinions beyond whether or not something presents a legal issue or not.  Speak up! If you’re a naturally shy person or intimidated by authority, you’re going to have to figure out how to overcome that.

6.  Ask.  One of my biggest regrets as I look back on the times I was asked to be more strategic is that I did not simply ask them what they meant by this.  Instead, I would shuffle off down the hall to try to decipher just what the hell “being strategic” meant.  What I should have done is say, “I would love to do that but I am a little unsure how to go about it.  Do you have any examples you can share or opportunities for me to engage in a more strategic way?”  Doing something so simple would likely have sped up my ability to start thinking and acting more strategically.  Of course, like most people, I was somewhat embarrassed to admit aloud that I did not really know what being strategic meant.  At least as to me and my role as an in-house lawyer.  So, either in response to someone’s request or because you just want to become more strategic generally, tee up the question with your manager or senior business colleagues, i.e., “what can I be doing to be more strategic in terms of helping the business meet its strategy and business goals?”  If you are a manager, proactively look for ways to teach your team to become more strategic – a great offsite topic!

7.  Seek out strategic roles.  As you begin to work on your strategy skills, try to take yourself out of situations where you are only working on legal problems.  That means seeking out roles in strategic projects underway at your company.  Every company I have worked for had many cross-functional strategic projects going on at any one time, i.e., important projects that involved persons from many different parts of the business.  Get yourself assigned to one of those at the next opportunity, especially if you can find one that is focusing on long term planning or strategy for the company.  You will absorb a lot just being part of such a team.  You may have to ask your manager to keep their eyes open and go to bat for you (they should), or you may spot opportunities on your own just by asking around.  Regardless, if you are assigned to one (or you push your way onto one) remember to work hard to go beyond your role as just a pair of eyes from the legal department there to weigh in on legal issues.  That can – and should be – part of what you are doing there, but you are also trying to get looped into the business discussion/strategy as well.  As always, be prepared, diligent, and deliver on what you promise.  This will likely mean some extra work on your part, along with a willingness to raise your hand and volunteer.  If you do not make it known to everyone on that team that you are interested in more than just the legal role, all you will get is legal role work.  Be your own advocate here.

8.  Communicate in non-legalese.  Another important part of being a strategic lawyer is to talk like a business-person rather than a lawyer.  This means ditching the complicated and flowery language many lawyers love to use (both when talking and when writing).  If you want your colleagues to think of you as more than a lawyer, then figure out how best to communicate with them.  I have written before about how writing in-house is different from writing at a law firm and on presenting legal issues to business executives.  Start there.  But, in a nutshell, you need to learn to keep things simple, to get to the point quickly, use visuals and graphs, and to back up your thinking with numbers.  Most importantly, always be practical.  Live in the world of what is doable and what is most likely to happen.  The sky is rarely falling, Henny Penny and resources are not unlimited.  You must also learn to communicate with their preferred tools – become a master of PowerPoint and Excel spreadsheets.  You can learn how on YouTube for free.

9.  Have a checklist.  Now for the real secret of becoming a strategic thinker – create a checklist!  Sound dumb?  It’s not.  Trust me.  I had one for years and kept it inside the cover of the notebook I toted around every day.  Of course, over time, I had it pretty much memorized though I did revise it from time to time to keep it fresh.  Basically, any time someone raised a significant issue at a meeting or in an email or when I was just mulling over things during my “thinking time,” reading a newspaper, or watching TV, I went through this list.  While many times it helped me come up with better legal strategies, it also spawned a number of other ideas that would fall under “be more strategic” and I would share those as appropriate with the business.  Because it is close to Christmas, here is my checklist.  You are welcome to copy it, add or subtract to it, laugh at it, or do whatever you wish.  But, I guarantee you that if you start to filter issues and ideas through a checklist like this you will not only become a better lawyer, you will start to become a strategic lawyer:

Sterling Miller’s Strategy Checklist

• Who does this impact/who is involved?
• What is the business trying to accomplish here? How can Legal help?
• Does this maximize value creation/minimize value destruction?
• How does this fit into the company’s strategy?
• What’s the game theory here?  If we do this:
  • What happens in the short term?
  • What happens in the long term?
• Is there a pattern behind this problem/issue?  Can we fix/change it?
• What are the benefits/risks of doing this?  How much will it cost?
• Is this something that will make customers or vendors upset/bring on litigation?
• Is this something that if it becomes public or goes “badly” could damage the reputation/stock price of the company?
  • Even if we can do this legally, should we?
• Is this covered by any specific law or regulation?
  • Will any regulator care if we/they do this?  How would we respond if they do?
• Can we use legal tactics/government affairs to legally advance our interests/stop this?  Should we?
• Have our competitors/anyone done this or faced this before – what did they do?  What happened?
• What is the craziest “what if” I can come up with here? Why would/wouldn’t that work?
• Who in the company needs to know about this?
• Is this something that could injure someone?

Don’t be intimidated by the list.  I swear it all becomes second nature at some point.  You should also be familiar with the basics of game theory as part of becoming more strategic, and consider reading these two books: The Art of War by Sun Tzu and How to Think Strategically: Sharpen Your Mind. Develop Your Competency. Contribute to Success by Greg Githens.

10.  Real-life examples.  I realize that all of the above may seem a bit opaque, especially if you have never tried – or no one ever taught you how – to think strategically.  I think the best way to end is to provide several real examples that I have been part of that show how in-house lawyers can think “strategically:”

• At a prior company, we had a number of patents and we consistently applied for and obtained new ones.  However, there was no strategy behind the process, i.e., why were we getting them and what were we going to do with them?  As a result, the legal team came up with a patent licensing program where we proactively sought to generate licensing fees from our patents.  Likewise, we ensured that we had patents that would serve as a deterrent to anyone seeking licensing fees from us.  And we worked with the tax team to help use the patent program to maximize tax benefits for R&D.
• At one time, I worked for a company that was heavily regulated.  There is some benefit to regulation in that the business is stable and predictable.  But, the legal team understood from talking with the business that the landscape was changing and if we ever became a de-regulated industry, the competition would be fierce and many long-standing companies fail in a deregulated market.  So, legal worked with the business to devise a long-term business and legal strategy to prepare for a deregulated world and to advocate for deregulation with our regulator.  Not only did we accomplish our goal of deregulation, we were ready from the start to compete in the new environment.  A number of competitors were not.  And many other parties were completely blindsided by our strategy of deregulation and equally unprepared for the new dynamics which played to our benefit.
• At multiple stops, I have asked the business and the legal team this question: what is stopping us from signing more contracts?  In one instance, the response from the business was that our standard contract was “too long.”  Rather than state all the reasons why each provision in the agreement was needed for legal protection or whatever, I challenged my team to cut the length of the contract in half.  There was some reluctance at first, but eventually, everyone got into the spirit of the exercise.  We were not able to cut the contract in half, but we were able to make it more customer-friendly and about 40% shorter.  The business was thrilled and contracting became easier for the lawyers and the business.  Basically, what is the business trying to accomplish and how can we help?
• I dislike litigation because I think it is wasteful and expensive.  That said, it is something all in-house must deal with.  A few years back, my company faced numerous lawsuits.  The “legal” thing to do was to defend/resolve each suit as quickly and cheaply as possible.  The “strategic” thing to do was to try to figure out what was driving all the lawsuits (i.e., find the pattern behind the data) and whether there was a way to make changes in the business that would reduce or eliminate the lawsuits.  It turned out that there were several things we could – and did – do that dramatically reduced the number of lawsuits we faced every year (as well as a “write smart” program to reduce the risk presented by e-discovery).  This is a good example of going beyond the tactical to the strategic.  On a side note, I have also seen in-house lawyers use litigation as a strategic weapon (vs. something to be won or lost simply on the merits of the litigation).  For the plaintiff, there is little often downside under the U.S. system other than the cost of bringing the lawsuit.  Meaning, a lawsuit can be an effective hammer to leverage in a negotiation.
• Several years ago I was reading the Wall Street Journal and saw a short article on an interesting, but small, tech company.  What they did seemed to fit nicely into some long term strategic plans of the company I was working for.  I sent a copy of the article to the head of business development and mentioned that the company might be a smart acquisition target.  They had not heard of the company before but agreed that it was one that the company should look into more closely – and eventually, we did try to acquire it. This came about because I actually knew the company’s strategy and could fit non-legal pieces into that strategy.

*****

I know that there is a lot to chew on here (and others may think about it differently).  Depending on where you are in your career, not everything above is practical or easy to accomplish.  But, you need to start somewhere.  If you at least have a framework to work against, over time, you will be able to pull in more of the concepts and concrete steps set out above.  And, if you take one thing away from this post, start to look at how to solve legal problems within the context of the company’s overall business strategy rather than just looking at the legal issue in a legal silo.  The best thing legally (e.g., a lawsuit) may not be the best thing strategically for the business (e.g., suing your best customer).  When you begin to think like this, you are on your way to becoming a strategic lawyer and a real asset to the company.

Sterling Miller

December 12, 2019

Big news! I am very pleased to announce that SimpleLegal has named the “Ten Things” blog to its list of 30 blogs in-house lawyers should be following.  For more, click here.

More Big news!  Ten (More) Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies Volume 2 came out last month!  It’s my second book based on this blog series.  As the ABA says, “All in-house lawyers need to own this book!”  Click here to buy it.

I have three published three other books: Ten Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies, The Evolution of Professional Football, and The Slow-Cooker Savant.  I am also available for speaking engagements, coaching, and consulting.

Follow me/connect with me on Twitter @10ThingsLegal and LinkedIn where I post articles and stories of interest to in-house counsel frequently.  

“Ten Things” is not legal advice nor legal opinion and represents my views only.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers.  If you have questions or comments, please contact me at sterling.miller@sbcglobal.net.

[1] Consider a “mini-MBA” such as that sponsored through the ACC at Boston University.