The human factor with in-house lawyers

People management has substantially changed in the last years. Does this apply to lawyers as well or can lawyers be considered a „different animal“ which needs to be handled differently than the rest of the staff?
The lawyers‘ view of the world is tainted by the law firm model which is binary; you are an associate or a partner. Further, in law firms you are focused on the development of substantive expertise which all lawyers need as their basic skill set. As a lawyer you need to be technically very competent. And lawyers think in cash. When you come as a lawyer into a company environment it will become somehow different in many ways. It is not binary anymore, i.e. there are different options lawyers can take, e.g. they can work for a holding company, they can work as a General Counsel of a subsidiary, they can go into the business, develop themselves in many other ways and they can grow a personal vision. It is a different horizon and this will become a jump for lawyers.

Can you elaborate a bit more on what you need when working in-house?
What I usually explain is that there are four different skill sets you require to do a job and to manage a team: (1) you need to be a technician, i.e. this is the base skill everybody needs to do a job, (2) you need to be a business person, i.e. you need to learn the business deeply and to learn where the risks are and how it works, which is critical (3) you then need to be a kind of a psycho-analyst, because you need to be able to read the people in the room, the temperature and the drivers, and (4) you need to be a diplomat, because you need to know when to put your points across and when to pull back. Lawyers tend to focus on the base level only, i.e. the technical skills. The good news is that to be a technician does not mean you cannot do other things as well. However, the other skill sets need to be developed accordingly – and they are not like technical skills. Many lawyers master the first and second level, however, what they struggle with are the last two, because those are really the ones we call soft skills and there is no technical book to learn them – i.e., they do not come with instructions. Therefore, developing them in this regard is the real challenge for many lawyers. What I would say is that the further you go in your career and the higher you get in any organization, the more important those last two levels become.

We have learnt that outside and in-house counsel seem to have a different mind-set when it comes to providing best possible service to their very customers. Should an external counsel want to move in-house, what are your recommendations with regard to such a career move and to make a „transfer“ a success?
The biggest job we find when lawyers come across is that lawyers working in a law firm have been formatted and trained on the technical skills only. What they have to learn now is not to provide technical legal advice only, but to operationalize it. Business people will look at the in-house lawyers after the presentation from outside counsel and ask „What can we do?“. It requires a translating of the technical information into operational guidance which means defining the red lines and the company’s risk appetite when dealing with complex risks that always fall in the grey zone. Outside lawyers coming in-house find this task very difficult and it takes them a year or so to adjust and to make them real business lawyers.

Does this mean a lawyer loses its independence when moving in-house?
When you are in-house you have an inherent conflict in your role. One part is facilitation to help your clients getting the deal done and your company making money, the other part is control. You have always a tension between the two. When talking about independence in providing advice, you normally look at the control side. However, I always advise my lawyers to put the focus on the facilitation part and on building the relationship first. You need to explain the reasons and to bring ideas to solve a problem for your business people. The control issues are best addressed when you have a concrete situation in front of you (and hopefully after you have already had time to build the relationship). Addressing a control point when you have a specific situation in front of you permits you to bring solutions and offer ideas to resolve it. If a lawyer tries to address all the potential control issues that could arise in a transaction, it can be a very abstract discussion – and one that can give business people the impression that you are not there to help them but rather to block them. If you have the relationship built and you are pragmatic in addressing control issues, your clients will listen to you — so when you need to hit the control-button and you say ‘no‘, they will stop and listen. This is absolutely critical because being an in-house lawyer is not just about giving technical advice. It is about operationalising that advice and getting impact. At the end of the day, this is about mind-set and presentation, i.e. how you package your advice and put it across.

Since you are heading both the legal and the HR department: What are the key challenges you have been facing when leading lawyers?
There are two different things to manage in these two departments. Within HR, what you do and the skill set you need are much more diverse than on the legal side. In HR you manage a very wide spectrum of things, i.e. from transactional services (like payroll) to expert services (like compensation and benefits) and to strategic HR (like developing leadership skills and assessing executives). The nature of these things is very different and the people who do them have very different skill sets. In Legal you are getting people who have had a certain education, they have been to law school, they passed the bar exam and they are licensed professionals in most countries – so there is a bit more uniformity in how they are „formatted“ and think. However, I say to both senior managers in HR and Legal that they need to focus on the four different skill sets I described before. I believe that these apply in a similar fashion to Legal professions and HR professions who aspire to evolve in any big organization.

When we talk about strategic HR this refers in general to developing leaders. This is a very high-impact activity if you get it right. And this topic is rarely about the technical competencies of a person which are considered a given. Soft skills are much more important, and here I talk about basic communication skills, i.e. can somebody stand-up in front of 500 people and connect on a human level?, can they project a vision that people can understand and relate to?, are they authentic?, do they project the right values?, can they build a team and energize / inspire people? These things are very important when you talk about leadership. Leadership is not management. Ability to manage is one component but leadership is about much, much more and you can never have enough leaders in a big organization. Lawyers do not necessarily focus on these issues in their day to day business – but they should because there is a lot to learn and a lot to gain from doing so.

Legal departments usually have a flat hierarchy and a limited availability of career options. Further, there is a lack of vacancies when it comes to management roles in the legal department. This may look challenging for outsiders. How can you keep lawyers or so-called talents motivated who are interested in making a legal in-house career?
This is indeed a key challenge for management. There are mainly four different paths an employer may apply: (1) taking a person working in a specific substantive area and stretch her to other areas, which may qualify as a kind of job enrichment, e.g. from finance to risk to governance, (2) moving people to a senior or even a General Counsel position of a subsidiary, (3) shifting a person into business, which in Europe (compared to the U.S.) is still much more rare because lawyers are positioned and seen in a certain way, and if you think about yourself as a technician you are a technician, (and in this respect, you have to be very careful not to be a prisoner to your own education), and (4) apply international mobility where you send high potential people abroad for some years. There is no magic solution, it just takes some thinking about who a person is, what her strong skill sets are and what aspirations she has. And if you do not give it a thought you will lose good people.

What do you think about offering not only management careers but also subject-matter careers?
Not everybody needs to become a manager. There is a place for great technical experts as well and some lawyers are perfectly happy with such a role. On the HR-side we think a lot about this, in particular on how to reward such technical experts. One should not forget that in order to become a technical expert it takes many years to truly master an area of great technical depth and also investments of the company. And to keep such resources for a long term you need keep them happy and to compensate them accordingly, i.e. at the same level like managers. On the other side, the lawyers who want to become managers and leading teams need to reflect on what this really means. My advice to lawyers to become managers is to realize that the job will change. It is no longer about them or the substance of the project they are working on but about the people around them. They have to think about management as a separate thing and really focus on it. As a manager your job has changed and you have a whole set of different responsibilities which is about growing the people around you. You won’t climb to the next level by being a technical expert only. You will certainly need to keep your technical expertise to a certain level, but you have a whole new set of skills to learn and new layers of responsibilities. This is a hurdle not all the people are able and willing to jump. Lawyers, including those coming from outside law firms, sometimes tend to underestimate the challenge and the time of managing people.

Nowadays „war for talents“ has become a buzz word. Well, looking around I see a lot of resources not being developed sufficiently such as very experienced people and women. How can these resources being fostered as good as possible?
When you look at this there is no one uniform solution. And it is not a question of talent. It is rather often an issue of a particular market and its own culture. When you look at gender in certain markets like Japan it still seems a very masculine dominated discipline. We also see some difficulties in general, i.e. not for law only, in countries like Germany and Switzerland, however, not in in the U.S. or in France where it is not a surprise to find female General Counsel. When it comes to gender diversity, if you want to drive change my experience is that you need to spend time looking hard at the talent you have already in your organization and be very concrete about who the high potential talents are and what will it take for them to get to the top – what is the right career development path? how can they get the right exposure?. You need to have specific processes in place to make this happen. It does not happened by itself. The same applies when looking at very experienced lawyers. The employment level often varies depending on the specific market you are looking at. For example, at AXA we have very senior and deeply experienced Legal & Compliance professionals in a variety of markets, across Europe and in the US. These people can have 30+ years of experience. In Asia, the population tends to be much younger due to a variety of factors including demographics and turn-over.

Until 2020 it is expected that fifty percent of the employees will belong to the so called „Generation Y“. What are the key challenges when working with such lawyers?
From an HR perspective we focus on this topic quite a bit. We look at the macro trends in the world – including technological evolution – and we think about these trends may impact our business and workforce. We try to anticipate to ensure our workforce will be well prepared and adapted for the next 25+ years. Sourcing new Gen Y talent will be part of that equation but only part. The real challenge over the next years will be about managing across 4 or 5 generations in our workforce and marrying the skills of digital natives with the deep commercial knowledge that we have in our organization today. I think this will be the recipe for success and it means investing in your current workforce to ensure they have the skills necessary for tomorrow. We do see different expectations and behaviours in Gen Y talent. While this can vary from market to market and it is difficult to generalize, we see that they can be very project driven and less driven by long-term employment relationships. This does not mean the „uberization“ of employment markets across the board but I do think we will see differences in the nature of employment relationships and how companies access talent over the coming years. The same thing will happen to the lawyers‘ market. This is already the case in the U.S. and it will eventually come to other markets. It will not be the answer to everything but I expect this trend will continue and will impact legal services over the coming years the same way it will impact other professional services jobs. That is not a bad thing but it will mean that big law firms will need to rethink their model and General Counsels will need to do the same thing.

George Stansfield is Group General Counsel and Head of Group Human Resources at AXA Group (Paris, France). Prior to joining AXA’s Legal Department in 1996 he practiced law in New York City for 11 years in AXA Equitable’s Legal Department concentrating in corporate, securities and M&A matters. He graduated Phi Beta Kappa from Trinity College in History (1982) and from Georgetown Law School (1985) where he was a law review editor. Further, he is a member of the New York Bar.

02/2016