It’s well-known that in-house counsel are under growing pressure to deliver greater value to their organisations with less resources.
In a special roundtable with InfoTrack, Lawyers Weekly hears from two leading corporate counsel on how they are combatting this challenge.
We’ve also discovered how the pair are innovating to provide a strong foundation for business growth, including the crucial role of time-saving technologies.
PT: Phillip Tarrant, managing editor, Lawyers Weekly
JA: John Ahern, CEO, InfoTrack
KJ: Katrina Johnson, associate general counsel and head of legal, Asia-Pacific - Uber
AB: Alex Butterworth, senior legal counsel, McDonald’s
PT: For this roundtable, we’re going to be discussing a perpetual issue within the law, and that is the value of in-house teams. We’ll look at how in-house teams are changing the way they work within their firms to, rather than being the traditional inhibitor of business, actually [empower] the business.
Kicking things off, Alex - can I get you to give me an overview of your work at McDonald’s?
AB: At its core, McDonald’s at the corporate level is a property business. We have a lot of land holdings and so our legal team has a lot of property lawyers.
I sit on the commercial side of the team, and I work with marketing, digital and IT, and have two people that ably assist me with that. And then of course we have our franchising legal team, our supply chain, employment and so on.
So, a great deal of issues come across the whole business, from buying land, building buildings on it, to approving the marketing materials, making sure we’re complying with ACCC guidelines, voluntary codes of conduct, and getting our IT systems in place.
Many people would’ve seen our touchscreens - the self-ordering kiosks that we have - which are a great customer experience. [We’re involved in] buying the hardware for that, implementing the software, ensuring that the menus comply with the [proper] labelling, ensuring that our employees are all being paid correctly, and ensuring that all of our franchisees have the right agreements in place.
There’s a lot that goes on behind the scenes, and we have, I think, quite a small legal team for that, but with innovation and technology, we’re able to punch well above our weight and get a lot of work done with quite a small team.
PT: Katrina, what is the role of your team at Uber?
KJ: I think if we [have] to sum it up in one sentence: we like to say we let builders build on solid foundation. So, our role is really, like Alex described, it’s setting those guardrails, helping set up solid foundations for the business so that it can flourish and grow in a sustainable way, and a compliant way, and in a way that ensures it’s going to have long-lasting success in the market.
The types of work that we handle in-house are incredibly broad. We cover everything from the commercial work, [such] as the McDonald’s partnership, various deals. We handle regulatory work, working with our regulators around in Australia and in other markets. We help our policy team in actually pushing for legislative change in various places and work with governments in terms of framing out what appropriate laws might look like that have an appropriate focus on consumer protection, but that do enable businesses to grow, and so we don’t have regulation just for regulation’s sake.
So we’re very focused on that and then also all the way through to helping our customer support teams with escalations from issues, and there’s also a lot of business development work that we help support on, so it’s a very broad range of work.
We, like Alex, have a reasonably lean team, and we do nearly all of it in-house, and so we have had to be very creative as well, like the McDonald’s team, in finding ways that we can work smarter and faster, and run as fast as the business does while creating those appropriate boundaries and guardrails for them.
PT: John, what transitions have you seen over the years in terms of in-house teams embracing technology to focus on the important stuff and the people stuff, rather than getting bogged down in all of the mechanical stuff?
JA: We do see a mix through the industry of people who look at in-house counsellors as just a nice way of saving money, or spending money without external counsel. But there’s so much pressure on them now to really lead the business as an enabler, and these are two great examples.
So it’s about enabling their business, and the only way that they can do that is to work really smart and if you have the right tools to do that, then you have enough time to take care of the business and lead it in the right direction.
If you go to an in-house counsel with a great innovative idea, and they tell you 20 different ways ‘no’, that idea is likely to die. But it sounds like here, if you go in Uber or McDonald’s and you say, ‘Look, I've got an idea’, what you’re going to get back is 20 different ways that you can do it safely, in a way that protects the business, and create something that will enable it to flourish in the future.
PT: Would you say that the mindset of McDonald's and Uber is representative of the lion share of in-house counsel in Australia? Would you say that these guys are the pointy end of it?
JA: They’re at the pointy end. When I speak to in-house counsels, they generally say, ‘Look, I struggle because I don't have access to the same tools I used to when I worked in this law firm. I'm having to compete with other different business units for IT spend’. Other firms say, ‘I've got access to the right tools, we're just starting to use them. They're really saving us time, and I'm looking for more’.
Corporate counsel are well-placed to be the innovators in the industry, to get access to the latest tools.
Because their roles are so broad, and the good ones really have positioned themselves front and centre in the business, they’re part of every innovative decision, they’re right in the middle of it.
So they’re well-placed to have access to the right tools, utilise them, and reap the benefits for the business.
PT: Alex, can you just run me through bit of an inside view of how McDonald's focuses on resourcing and cost efficiency. How are you guys embracing technology to be more efficient at what you do, and potentially reduce staffing cost, which is always a focus for most businesses?
AB: At a broader business level we have a committee that basically decides what projects the business is going to work on, what priorities they will have, and what resources will be allocated towards those projects.
That committee, which meets very regularly, I think twice a week, has got a CEO, a chief marketing officer, it’s got the leaders of the business on it, making those decisions. And so whether you’re in legal or marketing, or the property team or any part of the business, if you’ve got an idea, you submit it, they decide where it’s in the priority queue and what resources to allocate to it.
And you’ve got to make a compelling business case. It’s not just about going, ‘I've got this great idea for a new piece of software. It's going to cost a million dollars a year, and it's going to save us 10 minutes every Friday’. They’re going to go, ‘Okay, there's a lot of stuff we could do that's a lot better than that’. So it’s not implementing technology for the sake of it, it’s you’ve got to have a real business problem that you’re trying to solve, and you have to make a business case for it.
PT: Katrina, where would you grade Uber in this spectrum of technical sophistication, as in embracing workflow management tools to reduce the time associated with mechanical tasks, and investing that upwards into the more human dollar productive stuff?
KJ: I’d say we sit reasonably high and I know that sounds a bit boastful, but it has been a very deliberate objective of ours, and I think it’s because of that focus and [commitment] to it.
One of our five goals for legal is operational efficiency and so just by committing to it and making sure it gets tracked and we’re accountable for that, I think, has helped us really get ahead of the curve here.
We have done a number of different things organically just from the legal team within ANZ, for example, ranging from things like holding legal clinics twice a week so that people could get fast advice, so we don’t have 1,000 emails back and forth, through to document automation.
One of our lawyers has a technical background as well and so he’s helping to create a chat board right now to deal with the most common queries that we face in the business. He’s also experimenting on a document management system that actually flags keywords or trigger words for reviewing marketing copy and other communications with some advice built into it.
PT: John, you navigate all areas of law with InfoTrack. What do you need to say to an in-house team to get them to start doing some of these things? Is it sometimes like beating your head against a brick wall?
JA: Well, I think the first thing is [to explain that] the role of the in-house legal counsel is not just to save money on external legal counsel. The role is to navigate the business in a really efficient, effective way and they need tools to do that.
Clearly, Alex and Katrina have just mentioned the tools; they’ve got access to the tools to do that. That really drives some of those cost savings so that they can focus on enabling the business.
PT: An observation I want to make with the guys here from McDonald's and Uber is that unlike many other industries that I work within, when I look at in-house counsel, it's like a badge of honour to say, ‘I have limited resources’. They often say: ‘This is what we've got. Let's use if as effective as we can’. How would you respond to that?
AB: Yeah, I would agree, absolutely, it’s a badge of honour, because the sign of a good in-house lawyer to a CEO or COO, or CFO (CFO, in particular) is, ‘Look how much I can do with only this amount of resources’.
Frankly, if businesses didn’t need to pay for lawyers, they wouldn’t. If they could just do whatever they wanted without any legal consequences, they would. But that’s not the world we live in, so it’s one of those costs that they have to bear, even though they wish they didn’t. And so if you’re able to say, ‘Look how much we can get done. Look what we can do for your business, but with this amount of resources’, the more you can show how much you can do with less and less resources, and consequently more impressive that is to your business leaders.
At the same time we need to have appropriate resources to be able to appropriately balance those risks. But I think one of the big mental shifts that people make when they move from a law firm to an in-house role is in a law firm, you’re almost trained from law school through your graduate program to eliminate all risk. You wouldn’t have a business if you eliminated all risks. Uber wouldn’t exist if they didn’t come into the market. They knew that there wasn’t ride sharing regulation, but it was [dealing with] that or not having a business.
So, it’s understanding the appropriate level of risk, what the business is willing to accept and making sure that people understand that. But yeah, as you say, you wear it as a badge of honour when you’re able to reduce that risk a huge amount without spending hundreds of hundreds of thousands of dollars than say you might on external law firms.
PT: On that note of Uber coming into the marketplace without the legislation around ride-sharing, Katrina, to say, ‘We're going to go in there, we're so confident that we can achieve this with good sound legal advice matched with good business strategy’ is pretty ballsy. But is there a point in time with Uber where you go, ‘We've covered off the tough stuff now, we can reduce the emphasis that we place on in-house law of legal compartments of the business and concentrate more on marketing, sales and stuff’. How do you guys work in the future of Uber?
KJ: I think at its most basic, we’ve probably shifted from being more a reactive function in legal to now more proactive.
Perhaps the earlier days of the business, when we were working with governments to try to get appropriate regulations in place and deal with some of these issues, we played more in that reactive space. Now I think where we are at, we have a lot more opportunity as lawyers to really be proactive and do some of these initiatives to create efficiencies in the business, to work more strategically on bigger, bolder bets that the business might like to make in markets.
We’re always going to have legal and compliance issues in every business, they’re just of a different nature. And so, the ones that we deal with now are perhaps different from what we initially had in the early days of Uber in Australia, but we are always mindful of our compliance obligations and making sure we are setting up the business appropriately.
We continue to grow, and so we have new people coming on board all the time that we need to work with, and help them understand the right guardrails around how we grow the business appropriately.
PT: John, we conducted the InfoTrack in-house efficiency survey in collaboration with you guys. We talked about software technology tools available, eco technology, discovery and intelligence contracts, police checks, e-contracts, all this sort of stuff. We then asked our respondents, if they were provided these tools which of the following statements do you think would be true: ‘I'd send less work to external law firms’ was one, ‘I could do the work I have faster’, was another.
Another one was, ‘It would open up time to allow me to drive efficiencies and growth in the business’, and the other one was, ‘I'd spend less time doing processing work’.
Out of all those four different respondents, the last one, ‘I'd spend less time doing processing work’, was the top response for 67 per cent, followed up pretty closely with ‘It would open up time to allow me to drive efficiencies and growth in the business’. So, it's just common sense, right? To start using what's available to us today to do this type of work and focus on the other stuff?
JA: Absolutely. If you think about it, it’s crazy. Lawyers are intelligent people, and they’re not cheap , but [some have] got them in the business doing processing work, it’s crazy.
If you take that work away, or give them tools where they can get that work done very quickly, you can put them in the seat where they can help navigate the business in the right direction – where they can be innovators.
Dealing with regulation is one thing, spotting regulation in advance and seeing a market opportunity is just another.
Take them out of the processing role, put them in a role where they can steer the business, because clearly, they’re smart people and they can add value.
To listen to the roundtable discussion, click here.
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