Why Your Innovation Team Needs a Lawyer25 July, 2016 / Articles
It’s probably happened to you. A team initiates a new big idea. Perhaps it’s to make communication easier for everyone in your global organization. Or maybe it’s to take your corporate profile into the stratosphere. Whatever the goal, by the time the idea is ready to launch, the team is exhausted but thrilled to finally reap the rewards of all their hard work.
Then the lawyers step in, ask questions, and kill the project — or reduce it to a shadow of its potential.
I hear these stories all the time. A leading professional services firm signed up 1,000 people to Slack groups before confidentiality lawyers closed down the project because it was cloud-based. A regional bank wouldn’t allow sales teams to share a new marketing campaign on their personal Twitter and Facebook pages because they couldn’t officially represent the company. A new client lost business because its processes and procedures were outdated and better options were not available in-house. Time was wasted, energy was depleted, and the mood shifted from possibility to pessimism.
The employees of all these companies identified their chosen culprit: legal. More specifically, they perceived the legal department as the killer of new ideas and approaches. But the real problem was that not a single legal representative had been involved in these new business initiatives from the beginning.
This is where the opportunity lies — in collaboration that includes the final approvers, embedding legal teams in the design and innovation process. Here’s how.
Involve legal from the beginning. Ironically, not including lawyers in the collaborative process perpetuates the idea that they smother innovation. It’s not unusual for legal to be asked for counsel only after a plan is solidified — and at that point any objection is automatically deemed an idea killer, with disappointed team members throwing their hands in the air in defeat.
But the business’s innovators typically don’t consider the challenges that legal and other approvers face by being brought in at the end. Lisa Shalett, who was COO of legal, compliance, and audit at Goldman Sachs before becoming its head of brand marketing and digital strategy, has a unique understanding of these challenges. “Nobody appreciates being surprised or not having enough time to think through a new thing,” Shalett told audiences at LinkedIn’s FinanceConnect conference in 2013. At the beginning of any project, she advises asking yourself, “Who’s going to need to know all the things we’re thinking about doing? Where are the risks? Where are people going to really need to understand the processes, the requirements, the regulations?”
At Goldman she set up a collaborative task force that included all the control functions: “Legal, compliance, employment law, employee relations, technology, tech risk, record retention.” Why so many experts in the mix? “So we can get to yes faster,” she said. “Or, if we have to get to no, at least we all are comfortable with why we ended up at no.”
Clearly define your company’s risk tolerance. Is a lawyer’s role best described as a steward of the company or a partner in the business? As a steward, the lawyer is responsible for protecting the business. It’s the historic approach to corporate law — the raison d’etre is to keep the company out of trouble; the lawyer may focus on risk and be disinclined to make changes. But when the lawyer is a partner, their focus is more flexible and likely more creative. Such decisions, however, are up to company leaders. Do they want to move carefully? Or to go for it and figure things out later? The latter is a modern approach that has been linked to missteps as well as to the phenomenal success of companies such as Google and Facebook. The role a company chooses to assign its legal team — steward or business partner — often is linked to its understanding and tiering of risks.
Google calls its approach “horseback law.” As Eric Schmidt and Jonathan Rosenberg explain in How Google Works, their book on the company, “In certain situations, it’s often enough to ride up on a horse…make a quick assessment, then mosey on.” Google is ready to take some risks. It openly accepts that not every situation will require a 50-page legal brief, and that sometimes it’s enough for a lawyer to “provide educated quick guidance to the business leaders making the decisions.” But the authors note that “horseback law works only if the lawyer is considered an integral part of the business and legal team, rather than just [being] summoned occasionally.” Companies like Google and Facebook have decided that their legal teams will function as integral business partners. In pursuit of this vision, they hire more generalists than specialists and ask them to support the business on new initiatives while at the same time keeping management informed of risks such as privacy and confidentiality issues.
Remind your company that there are risks to not innovating. Shalett has said the biggest lesson she learned in evaluating risks was that it wasn’t just doing something new that creates risk: Not doing something — not innovating — is a risk too. This makes it all the more important to set up your innovation efforts to succeed from the start.
Now that you’re ready to involve legal from the beginning, ask all the departments involved to break proposals and issues into layman’s terms. For example, engineering, management, and legal all speak different languages; in order for these disparate voices to understand each other, special care needs to be taken that each group doesn’t rely on jargon to express their ideas. Taking the layman’s approach will make it easy for everyone, including lawyers, to contribute to the innovation process.
I’ll end with a story that exemplifies how communication and collaboration can help identify risks and offer quick mitigation plans. (You might want to share this one with your legal team!) Employees of the retailer Lowe’s noticed that a particular dog treat was being returned because it was making dogs sick. They discussed this on the company’s social networking site, company lawyers noticed the extended thread, and the company pulled the product from shelves. Later, two other retailers were faced with class-action lawsuits regarding the dog treat. Had it not been for the communication among Lowe’s employees, the company’s lawyers could have been working overtime.
Remember that including legal is not synonymous with defeat. Try inviting lawyers in at the beginning of a collaborative process, clarifying their role, and avoiding jargon-laden communications. Chances are, you’ll find that they are neither superheroes nor arch-villains, but rather a valuable part of your team.