Weathering the Storm
Dan McCarthy -
As we move forward into the worst economic times since the Great Depression there is no shortage of bad news: almost every country and industry has been adversely affected; some banks have failed, others have been nationalised and all seem reluctant to lend; numerous companies have filed for bankruptcy and most are slashing costs hoping to live to fight another day; and M&A activity is in the doldrums.Fear, uncertainty and doubt seem to be the order of the day.
Dan McCarthy
While this is an enormously difficult time for all businesses, whether they be local or international, it is also a time of introspection and opportunity. Well-managed companies are determining what they need to do differently to thrive in the changed market that will eventually emerge, and smart lawyers are doing the same thing with respect to their law departments and law firms.
At the HP Legal Department we have the privilege of supporting a business that operates with 321,000 employees in 170 countries. Over the years we have learnt a few things about supporting international business operations through good times and bad. Following is a short list of the principles and practices we will rely upon to help our colleagues weather the current economic storm.
Integrity - International companies need to have an unyielding commitment to integrity in everything they do. A principal reason why international commerce has flourished over the past few decades is that companies have become increasingly comfortable that the "rule of law" will be respected and enforced in all countries where they operate. Trust, integrity and fair dealings stand at the core of a growing and sustainable system of international commerce - and lawyers have a special obligation to champion that process. While there will always be individuals or market participants intent on beating the system, there is much that lawyers can and should do to help preserve the essential pillars of our economic system. At HP, we benefit from having a strong "tone at the top" from the entire leadership team who make it crystal clear that legal or ethical transgressions will not be tolerated.
Wise and effective counsel - International business lawyers are expected to provide their business colleagues with a broad range of effective counsel. The world has become a very complicated place. By the nature of their positions, lawyers often develop broad and deep views of the markets and the legal and business challenges that their clients face. Drafting top-notch legal agreements is important, but lawyers who can help their business colleagues successfully navigate a whole host of legal, business, regulatory, tax, trade and other similar issues are worth their weight in gold.
Excellence - What the law department is always and absolutely accountable for, however, is excellent legal work. It is the price of a lawyer's admission to the business arena. In today's ultra-competitive environment clients should accept nothing but the absolute best service and support that the legal profession has to offer. The stakes are simply too high to accept anything less. Fortunately, the legal profession is blessed with a plethora of talented and dedicated professionals whose personal standards will not tolerate anything other than an outstanding quality of work product.
Teamwork - International legal work often involves many legal disciplines from different geographic areas, and success in a particular endeavour often depends on how well diverse teams of lawyers work together. At HP, we believe it is particularly important that all lawyers working on a project share a common set of objectives and principles so work can be completed in an efficient, effective and pragmatic fashion. Lawyers may have their different roles and responsibilities, but - as a team - they all need to be committed and accountable for driving a project to a successful and timely conclusion regardless of unanticipated problems or difficulties. It also helps to have "lead lawyers" who have been trained in multiple disciplines and who are capable of managing or resolving many issues on their own - and who know when to ask their teammates for support.
Efficiency - The reality of the Darwinian world in which we live is that law departments have to engage in a constant process of becoming more efficient in handling their work. Matters that can be standardised should be automated or supported by less costly administrative personnel. In-house lawyers need routinely to expand the scope and complexity of the legal matters they handle, and the work of outside counsel should be focused on matters where they can bring true value at a reasonable cost. Also, the constant drive for enhanced efficiency is everyone's responsibility. Freeing up valuable time and capital that can be redeployed for better corporate uses must be on everyone's agenda. Lawyers who are unable or unwilling to improve their productivity risk being left behind as their clients and peers embrace the future.
Learning - Companies need to initiate and maintain processes to capture and drive into "knowledge banks" key learning derived from the normal course of business, so they become part of a company's DNA. It goes without saying that companies should not pay for the same advice or learning more than once. It is also important that legal teams share best practices across country and region borders to gain maximum impact. Technology can play a significant role in helping law departments and law firms keep their lawyers on the cutting edge of legal knowledge and efficient, effective legal support. A normal challenge in this environment is funding the technology investment, but spending money to save more money is generally hard to oppose.
Training - It is not enough to simply attract or retain a top-notch group of lawyers. Law departments of international companies should constantly provide their lawyers with opportunities to enhance their knowledge and skills through special assignments, regional roles, rotational opportunities and in-house or external training. It allows lawyers to expand and diversify their skills and competencies, while increasing their contributions to the business. The most valuable asset that lawyers bring to the business process is judgement, and that is a skill best shaped by working in as many phases of the business process as possible and being accountable for providing broad and effective counsel.
Humility - Today's international business environment is filled with potential pitfalls for the inexperienced and unwary, and it is downright dangerous for those who assume they know all they need to know. Merely because something is done a certain way in a particular country does not mean that the same approach works in others. Legal and regulatory environments are constantly changing and lawyers need to continually scan the external environment for new issues or developments that could affect their clients. At HP, we have developed strong relationships with law firms across the world, and those relationships are invaluable in helping us stay abreast of various jurisdictional and market changes.
People - HP General Counsel Mike Holston is fond of saying that "a law department or a law firm is only as good as its people, and there is no substitute for having the very best." And, for an international company, that means the best from the various countries where it operates. At HP, we are very proud of the highly skilled, talented and diverse range of lawyers and other professionals who make up our department. They give us an extra added advantage as we confront tomorrow's world.
In summary, we are confident that these time-tested principles and practices will allow our department to continue to play a key role in supporting HP's future success.