REUTERS | Phil Noble

Ethics and the in-house lawyer

At the start of the month, The Centre for Legal Leadership hosted the first of a series of webinars in conjunction with Practical Law on ethics and the in-house lawyer. Here is a summary of the key themes that were discussed at the event.

What are legal ethics?

In the “standard conception of legal ethics”, lawyers are:

  • Neutral to their clients’ behaviour and merely take instructions.
  • Partisan and think about what is best for their client.
  • Unaccountable for their clients’ actions.

Working in-house changes this dynamic somewhat as lawyers are closer to the culture and values of their organisation than external counsel.

Influencing skills are vital

In-house lawyers are well-placed to keep their businesses “honest”, but if they are new to the organisation or work as part of a small team, it can be difficult to get their voice heard at board level. Fortunately, lawyers are good communicators who can build relationships with natural allies within a business, such as:

  • HR.
  • Communications.
  • Finance.

Understand and persuade are an in-house lawyer’s watchwords. Within an organisation, lawyers are typically regarded as relatively neutral, but are expected to have a different agenda to their colleagues. A strong moral compass is a prerequisite, together with an ability to provide swift and decisive advice. In-house lawyers need to avoid being submissive, learn to pick their battles and avoid sitting on the fence.

Building credibility within an organisation takes time and the best way to earn the board’s trust and respect is by speaking their language. A direct reporting line to the CEO, rather than reporting to a subordinate, will reinforce a GC’s independence. Having a dotted line to a non-executive director with legal experience who can provide an external challenge to decision-making is useful too.

In-house lawyers can avoid being regarded as a business blocker by seeking to understand their colleagues’ perspectives. For example, by looking at a contract from the point of view of a salesperson whose salary is commission-based. However, if an in-house lawyer becomes aware of any unlawful activities, they must take it right to the top of their organisation and present the information to the directors, as they will have fiduciary responsibilities.

Building a compliance culture

The tone from the top of an organisation is important and the legal team can play a pivotal role in selling the merits of compliance to the business. Explain what Legal is responsible for and set out a clear set of rules for when Legal should be engaged. For example, a contract cannot be agreed without being reviewed by the legal department first. Avoid preaching and instead act as a business partner by making the legal department accessible. For example, by providing legal clinics to sales teams.

Legal can also be instrumental in articulating what an organisation stands for. It can explain that having a strong set of values distinguishes it in the market and can be a USP. For example, by providing services in a moral, ethical and socially responsible way that does not solely focus on price.

Business integrity is vital too. One method of measuring this within an organisation is by undertaking an anonymised Integrity Survey facilitated by a third party. Respondents are asked a series of questions about their perception of integrity within the business. For example, did they think that their line manager would force them to take any actions that would contradict the company’s values to make a sale?

Impact of the COVID-19 pandemic

COVID-19 has highlighted the importance for lawyers of having a strong voice at board level. It has also demonstrated lawyers’ value to their organisations. The law surrounding COVID-19 has changed regularly in the past 12 months and there was frequent confusion about what was law and what were merely guidelines.

One area of uncertainty was around working from home. In-house lawyers were able to provide clear advice to managers to enable them to apply working from home policies consistently. Another was the furlough scheme, which was initially only sketchily drawn and did not include certain categories of workers.

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