…The only thing we have to fear is fear itself

Franklin Delano Roosevelt

Good leaders are able to embrace uncertainty and see the opportunities.

For General Counsel, uncertain times for the business create many challenges: there may be pressure to cut costs; recruitment may be frozen; the timeframe of planned transactions may fluctuate or transactions may not go ahead; the changing priorities of the business may lead to an increased workload; additional legal expertise and experience may be needed; etc.

Uncertain times also provide GCs with an opportunity to lead and empower their teams and to build resilience.

So how exactly can GCs lead through periods of uncertainty? There are four things a good leader can do.

1. The first is to accept and acknowledge to your team that there is uncertainty and that most people find uncertainty challenging. Lawyers, by their nature, find it particularly scary. When faced with the fear of the unknown, a neuroscientist will tell you that the instinctive part of our brains, the amygdala, which governs our fight, flight or freeze response, kicks in. While such responses are essential when we are faced with real physical threats, they are less useful when dealing with business situations. They can result in irrational responses (ask anyone who has sent an angry email which they regret almost immediately) and/or paralysis. So the first message to the team must be along the lines of "don't panic"!

2. Provide reassurance by assessing and communicating to the team what is known or reasonably certain. Take Brexit as an example. The full effects of the result of the UK referendum are unlikely to be clear for some time. However, what is known is that, currently, the UK is still a member of the EU and subject to EU laws. This position will remain until some time, possibly up to two years, after the UK Government invokes Article 50. 

This may allow some certainty around the business and the legal function. Certain planned transactions may still go ahead. A planned office move may happen. The in-house legal budget may be safe for the next year. This will communicate to your team that there are solid foundations on which the team's strategy can be built.

3. Involve the team in identifying the areas of uncertainty. It is usually possible to envisage and map possible future scenarios and their likely consequences. These scenarios can be analysed and a view taken as to their probability and the risks posed to the business. This will allow for some contingency planning. Workshops involving the in-house legal team and stakeholders from other key parts of the business are a good way of exploring and discussing this. People should be encouraged to think of worst- case as well as best-case scenarios. Hope for the best but prepare for the worst.

4. Let team members be part of shaping and developing strategy. Leaders face a dilemma: how to create a strategy for alternative scenarios in an environment of uncertainty? Stephen Bungay in The Art of Action, outlines the dilemma thus: when faced with uncertainties caused by limited information, unpredictable events and individuals misunderstanding or not doing what they are told, the instinctive reaction is to demand more data, issue more detailed instructions and exercise more detailed control. However, this approach is likely to fail. It is also likely to demotivate team members.

Instead, Bungay suggests, drawing a parallel with some of history's great military strategists, strategy should set broad objectives. Individuals at each level of the chain of command should be given only as much direction as necessary and be allowed to use their initiative to decide upon the best way to achieve their objectives through changing circumstances. As circumstances change, this can be communicated up the chain of command so that the overall strategy can be reviewed and amended where appropriate.
Acknowledging the uncertainty, providing reassurance and involving team members in the preparation and execution of strategy will. In doing this, team members will motivated and realise that they are an integral part of the legal function's and the business' response. They will no longer regard themselves as at the mercy of the slings and arrows of outrageous fortune, but be in a position to respond to and deal with unpredictable events.

Again, if we take Brexit as an example, it may not be clear exactly what the effect will be on the business or the legal function. However, one scenario is that the legal function may face cuts in its budget. Rather than waiting for this to be imposed, a good GC will plan for this. A typical response might be to issue detailed instructions to all lawyers in the team to reduce external spend, negotiate fee reductions with panel firms and impose a pay and recruitment freeze However, that strategy falters as soon as the first unanticipated transaction of piece or litigation arises; key team members leave; or one of the external firms won't play ball.

Instead, team members could be given the desired overall outcome, a reduction in legal spend, and given the latitude to suggest or decide how best to achieve it in their particular context. In that way, rather than a "one size fits all approach", the GC may end up with a number of creative solutions best suited to the various matters and changing circumstances. For example, process mapping or spend analytics might highlight efficiencies which can be made in certain types of work; secondments and the use of contract lawyers could broaden and flex in-house capability; certain categories of work might more efficiently be outsourced, leaving the in-house function more capacity to deal with more complex matters; instructing off-panel might access additional expertise at lower cost. The point is that the best means of achieving the overall goal may be different in each circumstance and the team members on the ground can provide valuable insight into that. They can also provide an early warning of unforeseen events which can be passed up the chain of command to the GC who can then decide if the overall strategy needs to be altered.

By assessing and communicating what is known, accepting that there are uncertainties and setting out the overall aims for the legal function, a good GC can motivate the legal team to embrace uncertainty.

What a good GC will also do in uncertain times is ensure that the legal function's delivery of value to the business is maximised and clearly articulated, a topic I covered in last month's blog, Delivering Value.

The Client Development Centre has over ten years' experience of providing training, guidance and strategic consultancy to in-house legal teams. We focus on helping in house teams maximise efficiency and the value they deliver to their business. We can assist in a number of areas including: formulation and implementation of strategy; change management; flexible legal resource; managed legal services; spend analytics and process mapping.