Lawyers working with entrepreneurs – particularly those in ‘disruptive’ businesses – need to be able to understand their bosses’ motivations, understand what it means to be entrepreneurial and balance commercial risk with fast business progress.
That was the key message from a roundtable of General Counsels with some of the UK’s most high-profile ‘challenger’ technology and tech-related service companies, hosted by global legal recruitment specialists Taylor Root, at London’s Ham Yard Hotel.
The event – ‘Disruptive technologies’ (within legal and society) – a new breed of General Counsel? was facilitated by Jeffrey Eneberi, pioneering General Counsel and Commercial Projects Director of FTSE250 firm Just Eat Plc and alumnus of The Lawyer magazine’s ‘Hot 100’ annual survey of the profession’s best and brightest.
Eneberi, a former geneticist, MBA graduate and mentor to start-up technology businesses, challenged the roundtable – operating under ‘Chatham House’ confidentiality rules – to define the role of the General Counsel in disruptive businesses.
“Does the standard way of being a General Counsel enable us to succeed?” he asked. “Our basic role might not have changed, but we all need to be able to put ourselves in the mind of the entrepreneur and think about how our businesses might be disrupted.” “Disruption is the arbitrage between normal state and new state,” he added. “We might all think our businesses have a moat around them, but they don’t. Staying still will not keep us successful.”
The panel responded vigorously to the challenge, engaging in a couple of breakout exercises to shape the discussion. Entrepreneurs are visionary developers of businesses, the panel felt; creative, courageous and willing to take risks –and with the ability to fail – not just in the pursuit of profit but to try to change established thinking, to disrupt markets. Eneberi encouraged General Counsels to read their company’s balance sheets so that they can “speak the language of their commercial colleagues and understand strategic directions”.
Disruption is something that is going to be uncomfortable for some businesses, including disruptors themselves who are far from immune, but it is important that they are able to operate “free from the past and free from convention,” as one General Counsel memorably put it.
General Counsels needed to get under the skin of that thinking, but it is important not to get too close, according to one General Counsel. “You can take understanding entrepreneurs too far,” he said. “If I gave my boss entrepreneurial advice, it would be the worst thing. The entrepreneur ‘gene’ is rare and exceptional. Some of us lawyers may have it too, but it needs balancing with a wise head.”
General Counsel were too often seen by the C-suite as a block to innovation, the panel felt. But the new breed of General Counsel need not only to lead the legal function and act as a trusted adviser but provide truly commercial counsel – “general counsel in every sense of the word” – as well as creative direction and energy to help the company achieve its business goals.
While many businesses – and consequently General Counsels– see the in-house lawyer’s role as primarily one of cost-control, the panel felt that disruptive businesses, where innovative work practices are hard-wired into the corporate DNA, provided more opportunity for the new breed of General Counsel.
“No one in my business has asked me to reduce costs,” said one General Counsel at a disruptive company. “I’ve been asked instead to maximise the profit potential of the risks my organisation is facing. There will always – always – be cost in business, but we shouldn’t be afraid of that cost, just know that we can handle it in the right way.”
“I need to increase my team’s ability to evaluate and manage risk,” said the General Counsel at a major tech provider, “but it’s very important for us to retain the legal perspective and our ability to challenge, and yes, to ‘speak truth to power.”
“People in the business want to make money,” said another. “So let’s help them get to where they want to get to within the framework of law and regulation but not just be policemen. We might have shares too!” General Counsel were also in a different position to lawyers from private practice. “Most of us have come from private practice, and that stays with us, and I’d always rather have someone on my team who has trained and qualified in private practice,” said one attendee.
“But most private practice lawyers don’t challenge. Their mantra is ‘don’t get sued’. They don’t innovate. The focus is on bums-on-seats, chargeable hours, big deals, big cases, whereas the really good General Counsels, the leftfield ones, can generate debate within the C-suite, and that debate is what generates disruption.”
Recruitment of the right kind of lawyer is a key part of the equation for disruptive and challenger businesses, according to Eneberi.
“If they spend a few evenings mentoring aspiring business people, hire them! If they spend all their time watching tv series boxsets, you might want to ask if they’ve quite the right mindset for a disruptor (unless of course, they are researching a venture tipped be the new Netflix),” he said.