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Episode 69
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Ethics and Professional Responsibility Professional Skills
Pushing Reset: Navigating Strategic Complexities as Risk Averse In-House Lawyers
Law as stated: 16 December 2022
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This episode was published and is accurate as at this date.
Danielle Keyes, GGC of Nova Entertainment, joins Hearsay to wargame the brave new world of strategic in-house counsel - touching on building internal networks, communicating effectively at all levels, and what to do about tricky ethical questions
Ethics and Professional Responsibility
Professional Skills| What area(s) of law does this episode consider? | Working strategically and commercially as in-house counsel. |
| Why is this topic relevant? | Traditionally, in-house counsel have operated as the final gatekeepers of new products or services, brought in at the end of a development cycle to give the stamp of approval – this approach has sometimes led to the perception of legal as the “Department of No”. Increasingly however, legal departments are working hand-in-glove with the rest of the business, from an early stage of the cycle of product development. Strategising, planning, and enabling new products or services. This new way of working presents new challenges and different issues for practitioners, especially maintaining the balance in their responsibility to the court and the administration of justice as a whole and their responsibility to their clients. |
| What are the main points? |
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| What are the practical takeaways? |
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| How to: | How to provide effective written advice when working as an in-house counsel:
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| David Turner:
1:00
2:00 | Hello and welcome to Hearsay the Legal Podcast, a CPD podcast that allows Australian lawyers to earn their CPD points on the go and at a time that suits them. I’m your host David Turner. Hearsay the Legal Podcast is proudly supported by Lext Australia. Lext’s mission is to improve user experiences in the law and legal services and Hearsay the Legal Podcast is how we’re improving the experience of CPD. Today on Hearsay the Legal Podcast we’re talking about working in-house, and according to one survey out of the United States, approximately 70% of chief executive officers want more strategically involved in-house counsel in their firms. In-house legal teams are being challenged to work as strategic business partners of the firms they work for, not just managing risk today, but enabling and empowering an organisation to move into the future, as well. What does “strategic” involvement mean and what are the implications for in-house legal practitioners? Now, traditionally in-house counsel operated as sort of gatekeepers for new products and services, or communications and messages, brought in at the end of a development cycle to give a stamp of approval, and this approach has sometimes led to the perception of legal counsel being the ‘department of no’. Increasingly, however, legal departments are working hand-in-glove with the rest of the business from an early stage of the cycle of product development. Now, this way of working presents new challenges and new issues for in-house practitioners, especially maintaining the balance in their responsibility to the court, the overriding responsibility of all lawyers, and the administration of justice as a whole, and their responsibility to their in-house clients. Now, with me today to discuss working strategically in an in-house context and striking that balance appropriately is Danielle Keyes, General Counsel at Nova Entertainment. Danielle, welcome to Hearsay the Legal Podcast. |
| Danielle Keyes: | Thank you, David. Hello, thanks for having me. |
| DT: | It’s a pleasure. Now, Danielle, before we get started, tell me a little bit about yourself and your background in the law. You were in private practice before you went in-house. |
| DK:
3:00 | I was, yes. David, I actually grew up in Cairns, in far north Queensland and I’m a very proud James Cook University alumni. I did my articles of clerkship in Cairns at Gaden’s Lawyers as it then was, and I moved to the big smoke early in my career and spent most of my career as an insolvency and financial services litigation lawyer with Norton Rose Fulbright and DLA Piper. I actually quite enjoyed that, obviously, and got some incredible experience, worked on incredible matters and met some wonderful people. But I reached a point about five years ago when I was sort of deep in the belly of the beast of big law, running the Queensland insolvency practice at DLA Piper and answerable to a million masters and a million things. And I almost felt like I’d kind of lost my way. I didn’t feel like what I was doing had purpose really anymore and was making a difference. And I was just punching out a timesheet and hustling for clients. And that’s when I realised that it was time to go in-house. I wanted to be at the coal face of a business, not be an armchair general giving direction from the comfort of the four walls of a sophisticated big law firm. I wanted to be plugged into the business. I wanted to be at the table where the decisions are made, not be the decision. |
| DT: | Well put. |
| DK:
4:00 | Now, I didn’t necessarily think I’d end up then working for a fast-food company and a radio station, but here we are. But in all seriousness, I obviously took the leap into GYG and when I reflect on that journey, when I started at GYG, I didn’t have a legal function. I created it, which was a great experience. When I started there was 50 restaurants in the business. When I left a couple of months ago, there was 170 restaurants globally. There was nothing I really didn’t see as in-house lawyer at GYG. And that included taking the company public and three private equity capital raises. So, that was, you know, extraordinary experience. And I’m very proud of what I did at GYG and I’m very proud of the legal team that I built there and their part to play in all of that. And obviously that was a great springboard for me into Nova. It’s still early days in Nova, it’s a very different business and I’m obviously really excited to see how the role develops and grows as I embed myself more into the business. |
| DT: | And that description you gave of building the legal function at the same time as the business is going through such extraordinary growth is a great example of that strategic involvement in the business that we’re going to talk about today. Now, there are so many differences between working in private practice and working in-house, but when you first made that move to GYG, what was the most striking difference for you? |
| DK: 5:00 | Oh my God. It was nothing like I expected. I felt like it was like a voiceover in a movie where I said to myself, “Oh, I’m ready for this. How hard can this be?” And the voiceover is, like “she absolutely was not ready for this“ |
| DT: | Like Ron Howard in Arrested Development. |
| DK: | Absolutely, having spent 12 years in private practice at this point I walked into what was effectively, or at least being run like, a start-up. They’re an incredible company, had this incredible growth plan, but their mindset was “what could possibly go wrong?“. And as lawyers, we think everything could go wrong, you know? So, that was interesting. I think probably the biggest change was those initial stages of breaking that private practice mold. It’s not tangible, it’s the way that as a private practice lawyer we think, we exist, we speak, we act. It’s almost like doing a factory reset. |
| DT: | Yeah. Right. |
| DK:
6:00
7:00 | You’re rebooting yourself to think differently, and it’s funny. And to give you an example of that, when I was leaving GYG I was cleaning out my inbox, which I had completely lost control of by this stage, and I stumbled across the first advice that I wrote to the business not long after I started. And I mean, it was a cracker of an advice, it was a real belter, and you expect it to be, I was a big law firm lawyer, well trained, sophisticated, all of that stuff. So, the advice was great. But sitting there on the other end of it, like a bookend as a general counsel, I looked at my advice and went “What?“. I was sitting there, it was a facepalm kind of eye roll emoji moment where I’m like, “I have no idea what you are saying“. So, if I don’t know what you’re saying, I’ve got no idea what the business thought. So that’s a really good example, I thought, of how different it is in terms of the communication style in-house. And again, it’s that strategic piece, right? As lawyers we need to communicate a certain way, but the business speaks a different language, and it needs to be communicated to differently. And I think that was probably the biggest change. And it’s really funny, I think, because it’s a real dichotomy in that as a general counsel, I tap into that big law firm training, the experience, the sophistication, and I apply that when I’m thinking and synthesising and processing. But how I deliver it is very, very different. I think that the biggest change is more in the delivery than the content. |
| DT: | Absolutely. Well said, and thank you for that example, and for admitting to that. I think we probably have all done that, certainly in private practice. Experts in all fields, law included, I think really struggle to communicate with people outside of their field. But the ability to do that is such a great example of what we’re talking about today, being strategically involved, because leadership teams or the best leadership teams are interdisciplinary, aren’t they? |
| DK: | They are. That’s right. |
| DT: | They’re made up of experts from all different fields who’ve learnt to speak to one another. |
| DK: | Yes. |
| DT: | And of course, you can’t really play a role in that team, or you can’t play the role to the fullest extent, until you’re able to communicate with those other experts and able to communicate across disciplines. And clearly you were able to master that at Guzman YGomez. |
| DK: | Perhaps better than I did when I started, let’s say that. |
| DT: | Now, we’re talking about strategic thinking. What does that mean to you? Can you describe the concept for our listeners? |
| DK: 8:00
9:00 | Sure. Fundamentally, I think a part of strategic thinking is the ability to horizon spot, right? The ability to go, “okay, where are we going? Where is the business headed? How can I contribute to this? What can I do?” I think that’s a key thing for any lawyer, whether you are in-house or external. It’s both a kind of a simple strategic thinking, and it’s also quite nuanced. And I think it’s simple because you can identify a gap, a process, a problem, and then really be able to contribute by plugging it, you know, plugging the gap, dealing with the problem, fixing the process. But it’s also really nuanced because strategic thinking is also as much about understanding why we aren’t going to, or the business shouldn’t or doesn’t want to, plug a process, or a gap, or a problem. And I think that’s really the strategic piece and that’s really difficult, that just comes with time in the chair. That just comes with actually listening to the business, actually understanding what the business wants to achieve. And I think, if you can master it, it certainly makes you much more outcome driven than process driven. And obviously that then makes you more a trusted advisor to the business because you’re not presenting a problem, you’re presenting, potentially, a solution. But I think that it’s also very difficult to get to that point. Certainly for me it was, and I certainly can put my hand up and say it took me a long time through GYG to realise when I had to drop that private practice mindset and really start getting into the weeds of the business and sitting side by side with the operational part of it, and contributing from a legal perspective. |
| DT: | That’s interesting. Are you saying that traditionally we identify the risk, find a way to eliminate the risk, sometimes in-house you’ve got to accept the risk. |
| DK: | Absolutely, yeah. |
| DT: 10:00 | Now, traditionally, as I said in the intro to this episode, in-house counsel are sort of firefighters. A problem is dropped on your desk, you work to repair it. You might be asked to give the stamp of approval to a new communication internally or externally, or a new product. That’s the profile of work that might be sitting on your desk in the traditional conception of in-house counsel. For someone who is looking to the horizon, who is working proactively, who’s working strategically, what does the work on your desk look like? How is it different? |
| DK:
11:00 | Obviously, there’s always the day to day, but I think how it’s different is approaching how I do my job by thinking about the now with the end in mind, right? Going, “okay, well, I know this is the business drivers, this is where we’re at, this is where we want to get to. These are our limitations. How can I come to this discussion with something different to what they haven’t already thought about?” and the difference there is going, “okay, I’ve seen this sort of stuff before in a different way“. It might be a comparable between GYG and Nova – “I’ve seen it in a different industry, but it’s fundamentally the same thing. And here’s my experience that I can bring to it, because I saw it from start to finish there. We’re now at the start,” and I can bring this concept of, “well, I’ve seen it run through from start to finish. These are the learnings. Here’s an idea of how we can do things differently, better, more appropriately for this market.” You know, that kind of stuff. |
| DT: | You’re providing the legal advice and you’re providing that traditional risk function, but you’re also sort of a guide to these processes and journeys that the rest of the business might not have been on. |
| DK:
12:00 | Yeah, that’s right. I find that more and more I really tap into my private practice experience as a litigation lawyer, and as a litigator you see everything. You become an expert very quickly in everything really you have to upskill in the particular industry that you’re in, right? And so you see what happens when a contract goes bad, you actually, you genuinely see what happens when parties litigate over a comma being in the wrong spot. I think that helps me to bring a different kind of lens to how I approach the business. And I actually provide the guidance of, “have you thought about structuring it like this?“. You know, it might be a conversation, it might be a document, it might be a strategy. I definitely have found myself more and more as I get more senior tapping into that experience that I have. |
| DT: | Now it might be a bit of a truism to say that the lawyers are usually interested in the legal details, that’s what we’re trained to do. And as you’ve said you’ve had some tremendous training in some of the largest and most prestigious law firms in the country. But sometimes that can be criticised as a focus on the minutia and missing the big picture not seeing the forest for the trees. How important is it to restrain that inner legal geek, and be able to see the forest for the trees? |
| DK: 13:00 | Yeah, so this is a really interesting one, right? As in-house lawyers, we fundamentally need to make sense, okay? And I think that the real difficulty that we face is actually in stakeholder management, and how and when you ask the questions. And there truly is a time and a place for the geek, okay? I’m not discounting the geek at all. That’s where collegiate, in-house legal teams are so critical, because you can really all jam together, and vibe together, and geek out on a range of random things, you know? And in fact, I frequently give my team pop quizzes about random bits of the law because it’s fun and educational and it keeps us all sharp. |
| DT: | Well, you can’t just throw away those skills because you are also the interface between the business and external counsel. |
| DK:
14:00
15:00
16:00 | Absolutely. That’s right. And it’s important that we are continuing to think like that because, you’re right, when we are dealing with external lawyers, they’re communicating to us in a certain way and we need to synthesise that and communicate to the business differently. So, it is important for us to always continue to stay sharp. And I think we can kind of geek out in those sorts of areas. But when you are dealing with, or, talking to the CEO or the chair of the board, for example, that’s not the time to frolic in the mental somersaults of your legal analysis. That’s the time where you need to be slicing, and dicing, and being precise. Okay? And I think that’s a really important distinction to make. I remember many, many years ago, on a podcast or something similar, I heard someone say a great phrase that I’ve actually embraced, and certainly drum into my lawyers. And it is, when we’re communicating in any forum with anyone, we need to think, “who is my audience and why do they care?” So, as a lawyer, as general counsel, I care about the “why“, the “what if“, the “no“s, the “maybe“s, the “but for“s the whatevers. But the guy in sales would just as soon sell his left kidney than care about anything to do with that. He just wants to know if he can go live with his campaign, right? And so I think being solution driven which is important, we need to be, may well be “no“, but how we communicate it, it also needs to be a “what about this?” Interestingly, a strategy that I’ve deployed certainly recently since coming into Nova is actually just to listen, right? Listen to the room, everyone, what their personal drivers are, what the business drivers are. TIP: The point which Daneille has just made is something that is valuable not just for in-house counsel. In fact, here at Hearsay, David uses an interviewing technique called reflective listening. Reflective listening is basically a specific subset of active listening. Where the core concept is centred around reflecting the ideas your conversation partner has expressed back into the conversation. It’s grounded in empathy and trying to understand the speaker rather than dominate communication. Reflective listening is a technique in-house counsel can use to build relationships in the business because it fosters trust – and really, when you’re responsible for as much as a GC can be, why wouldn’t you want people to be open with you about what’s truly going on in the business? I think all too frequently there’s this expectation on lawyers that we just need to speak. But we don’t. Just listen. And I think that also helps us do our job better. It helps us to get the information we need to satiate the geek inside of us to then turn that around into a sensible commercial kind of advice for the business. |
| DT:
17:00 | That piece about just listening to what is happening in the rest of the business and digesting that. Sometimes I think there’s a mistaken perception by some people who want to move in-house from private practice that, “oh, well, I won’t have to worry about time sheets anymore, and there won’t be any time pressure anymore. I’ll just be living the easy life“. But of course, there’s a lot of time pressure in in-house counsel’s life isn’t there? And sometimes there’s a great deal of pressure for a quick answer, especially from the sales department when they want to launch a new campaign. So, how do you balance the need to listen and to consider and be thoughtful about the advice that you’re going to deliver and be thoughtful about the way you’re going to deliver it, and that need to turn something around really quickly. |
| DK:
18:00
19:00 | Yeah, if there was an answer to that then you know, that’s, the pot of gold at the end of the rainbow. That will always be the plight of in-house lawyers, unfortunately. And I think you’re asking me, how do we do it? Firstly, it comes with building really good relationships with the business, and you build those good relationships by delivering on good commercial, sound, strategic advice which of itself is a long process. One way to do it is to be process driven to a point where you prepare a suite of precedents and documents, which helps them get what they need. And then really for you, it’s just coming through to have one final look or review or bounce a few questions. So, that in itself helps to prevent the bottleneck. Also, it is knowing what sorts of questions you need to ask them. It’s also knowing the business. But sometimes you just can’t. And that’s a fact and it’s not because you don’t want to, it’s because you’ve got capacity constraints or you’ve got technical constraints, or whatever it might be. Or you just need a moment to think about it. A frequent example would be, the business wants to go live with a podcast, and they send it to legal for approval, and it’s high risk for whatever reason, and we need time to think about it, to process it, to edit it. But we also need time to understand the message and be able to help the presenters deliver it within the confines of the business, understanding the risk, and what their appetite might be around that. And that just takes time, unfortunately, because there is a lot of stuff where we can turn it around quickly. And often I’m frequently agreeing to, or conceding on, clauses in contracts because I just know in my experience, it’s not going to be an issue, it’s not going to be a problem. Either the likelihood of it ever becoming a problem is really low, or if it does become a problem, it becomes a commercial discussion, not a legal one. And that just comes with experience. So, there’s always that as well. But what you’ve identified David, is a constant, constant battle, every single day, of delivering on what the business needs. But sometimes we can’t do it within the timeframe that they want. |
| DT: | And I suppose that stakeholder management piece you’re describing earlier of having those good relationships so that when you need to ask for the favour of, “well, can you delay that for a little while, so I can properly think about it?“ |
| DK: | Yeah. |
| DT: | You’ve got that capital in the bank to ask for that. |
| DK:
20:00 | Yeah, that’s exactly right. And I suppose the way that makes the business more amenable to that is when you deliver it, it’s sensible, it’s clear, it helps them. If it is that whole piece and like you said before, you know the “department of no”, that if it’s red tapey, they’ll just go around you. They won’t respect your time because they don’t see a value in it. As in-house lawyers, it’s sort of like a funnel. We need to know all of the stuff, and what we spit out is probably two or three bullet points. Right? But we can’t get to two or three bullet points without all of the stuff. |
| DT: | Yeah. |
| DK: | So, if you deliver to the business, all of the stuff, they won’t read it, it’ll be literally TLDR and they’ll go and do it anyway. And then it becomes our problem again, it’s like a boomerang. So, I think, there is a constant battle there. I don’t think anyone will ever win that. I think that is just a purely social capital piece. It’s purely a everyday listening to the business, learning the business, plugging into the business, understanding what they want to achieve, and then backfilling it from there. |
| DT:
21:00 | That point about too long didn’t read is a great lead in to what I was about to ask you, which is, one of my favourite aphorisms is Albert Einstein- “make things as simple as possible, but no simpler than that”. And there’s another side to that need to communicate in the language that the business understands, which is that it needs to be accurate and competently given advice although delivered in a way that’s understandable. And I think sometimes experts really struggle with removing some of the detail. It might be that you say, “well, when a director knows that the company is insolvent“, like, “oh, it’s not, knows, it’s, has reasonable grounds to suspect that“. How do you manage that? How do you know what to just leave out? You described that, that metaphor of the funnel, you’ve got all this stuff at the top and you spit out the bullet points. How do you develop that skill of making the advice as simple as possible, but no simpler? How do you decide what detail to leave in? |
| DK:
22:00 | Yeah, that’s a really good question. I think that’s really a process of in one sense, you can almost say what you need to say in how you deliver it. If you can say it in 10 words, say it in five for a start, and that just makes you a better communicator. Be quite direct, cut through, say exactly what needs to be said in very simple terms. Sometimes you can’t not say all the things for whatever reason. But I can probably count on one hand, the amount of times in my in-house journey that I’ve given a long email advice to the business. And if I have, the summary of the advice is at the top, “yes, you can“, or “no, you can’t”. The risk is high or it’s low. These are the reasons why you should or shouldn’t go ahead with it. That’s really all they care about. |
| DT: | Yeah. |
| DK:
23:00
24:00 | But, when you’re communicating with C-Suite or the board, they’re much more sophisticated in their mindset of risk and governance, and so they do want to know those things to a point, if they’ve got to make a call on stuff. When we’re dealing with the day-to-day business you may want to say all of those things, but you can’t. TIP: Asking the question “who am I writing for?” is as valuable to fiction as it is to legal advice – and it’s something that is so often forgotten in pursuit of the perfect piece of advice. If you ask someone who regularly briefs outside counsel – from government or corporate sectors – something that is often said is that outside firms miss the forest for the trees. Meaning that the perfectly crafted and undoubtedly legally correct advice took 10 pages to give an answer that could have been three sentences. That same concept could be said to describe some forms of communication from an in-house counsel to the rest of the business. Now, of course, there is a time and place for that complex and nuanced advice. Danielle has illustrated that point quite succinctly. Remembering who you’re talking to is a key skill, and tailoring communications to suit the audience is not a sign of weakness – it’s often a sign of emotional intelligence. It’s a message also worth remembering for outside counsel dealing with commercially focused in-house counsel. I think to answer your question, how do you know how to reduce what you would love to say into what you need to say? You’ve got to put some skin in the game. You have got to, they’re relying on you to tell them the answer. Now, the answer might be, “I don’t know. It could go either way”. But that’s not an answer that, as an in-house lawyer, they want to hear. The answer that they want to hear is, listen, it could go either way, but I think for X, Y, Z reasons, this is why we should do it this way. And the truth is, I suppose for me at least, centering myself in the moment and going, “I’m tapped into the business. I know the key players, I know how they make decisions, and this might not be the right decision in the end, but right now it’s the right decision for these reasons“. I think when you’ve built the respect of the relevant decision makers, that’s how they make decisions. There’s no reason why as lawyers, we can’t make those decisions provided that we’re guiding them through that. |
| DT: | Well, as you said when you were describing your decision to leave private practice and go in-house, you wanted to be at the table where the decisions are made, not, be the decisions. And to do that, to do what you’ve described, you really need to understand the business’s strategy, don’t you? |
| DK: | That’s right. |
| DT: 25:00 | You really need to be contributing to the strategy by thinking of the decisions and the steps that will advance that. Now, I wanted to ask you about your work with product teams, that must be a fascinating process to contribute to product development. And as we discussed earlier, some of the best teams are interdisciplinary teams or product development teams, a great example of that, working with engineers and sales, marketing, legal. How do you contribute to that process and when is the right time to do that? |
| DK:
26:00
27:00 | Yeah, I think it’s a great question. Let me give you an experience. Flip the script on the back end. Some of my very early experiences at GYG when I started were the opposite of that. It was our last thought. The business went, “oh, we’ve got a legal team. We should get them to sign off on it“. That was an educational piece, both for me and for the business because “we’re about to go live with the campaign. Can you sign here and approve it?” Obviously, it doesn’t work like that, right? So, it’s about the journey my thought and push is always “engage legal early and often”. Bring us on the ride with you because when we are in it from the beginning, when we are as much a strategic key player as any other department, then we can say, “well, we expect these issues from a legal perspective. So, let’s talk through, at the simplest form, timing, it’s not possible for you to do whatever you want to do within this timeframe for these legal reasons.” When we’re on the journey early, we can see what they want to achieve and we can help them get there. And we know what’s important to them and what isn’t. Whereas, if we are brought in at the very end, it then becomes about what’s being put at us, right? We don’t have any control over the narrative. We’ve got minimal control over the outcome. We are in crisis mode to try and bubble gum and paddle pop sticks our way through things. Whereas, if we had have been there in the beginning, we could have guided it potentially down a different path. And again, you know, that might be a product of the business moves really quickly and so there just isn’t time. But it’s also important for us to embed ourselves properly in the business. And one, be nice and decent people, right? And two, be good competent lawyers where they go, “actually, I don’t mind working with legal because they do help us deliver the outcome and I actually learn stuff from them along the way“. Which means next time they might do one or two or three steps before we even get involved and they’re already making the process simpler for us. |
| DT: | Some managers might say, “well, I don’t want to get legal involved in product development, you know, it’s a creative iterative process. They’re just going to tell us all the reasons why we can’t do things. They’ll shut us down. I’d rather just get something good in advance before I invite them into the room.” What would you say to those people? |
| DK:
28:00
29:00 | Yeah, I think there’s pros and cons. I mean, if the business is in the room thrashing out ideas about what next product they’re going to do. Sometimes there isn’t much we can contribute to that, as lawyers. But if they get to a point where they’re settled on something that they want to deliver, that’s when there is a real need for us. I’ve faced a lot of that in my time, in-house of, “oh, don’t tell legal“ or “tell legal last because they’ll just say no.” And that’s a reflection, perhaps, on me and not building those relationships properly, or soon enough. It’s also a reflection on the business and maybe not understanding the role that legal can play in helping them get to that point. But I think I would say, do I want to be deep in the belly of a room where there’s whiteboards, and markers and flags and tags and stuff, and you kind of holed up for three or four days thrashing out an idea? Not really, quite frankly. But once you come to a few ideas, I’d love to hear about them. Because maybe there’s some things that you haven’t thought about. Maybe there’s IP things that you haven’t thought about. Someone else has already done this, how can I help you get around that? Maybe there’s legislative issues around it. Maybe there’s council permits that are required to do this and let’s think about an alternative that avoids that. Rather than them running off to get this great product in the end. And then all of a sudden, it’s like, “well, actually I can’t help you now because you’ve really fixated on this and you’ve got approval and these are the reasons why we’re going to struggle to be able to deliver it“. |
| DT:
30:00 | Now we’ve been talking a bit in this interview about when to loop in legal, when to communicate with legal, how legal communicates with other departments, but there’s an assumption there isn’t there? Which is that we are dealing with a kind of functionally siloed organisation where legal is its own department, it’s sitting in its own part of the office, and we are just communicating back and forth with other functionally siloed parts of the business. Is that the ideal structure for a legal department in a business? Or is there merit in having a kind of embedded legal capability within other divisions or functions? Maybe we might start with that, what’s your view on the structure of the organisation and where legal should sit? Should legal be separate, on its own, with all of the resources co-located, or should it be dispersed throughout the business where it can embed with other parts of the business? |
| DK:
31:00 | I think if the legal function is operating properly, it is already embedded in every other function in the business, right? I don’t think that it should be separated. I think that legal needs to be a function and is a function, collectively, collegiately, together. And we service all of the business because also sometimes, or a lot of the time actually, our learnings from assisting other parts of the business on different projects then feed and inform another part of the business on another project. And perhaps they’re working together. So where we are umbrellaing across two or three or four or five different departments at one time. And I think fundamentally, at the end of the day, yes, we are employed by our employer, but as we know, our first master is the court. So, we have a very unique role within a business and it’s really important, I think that we are in our own team. And I’m not suggesting for a second, it’s a silo, it shouldn’t be. We can’t operate in a vacuum. But we work together, the reporting lines go through the general counsel. Everyone’s learning from each other and we’re information sharing and gathering across the whole business. Now, I’m a massive advocate for maybe a hybrid of what you’ve proposed, David, which is, if you have a big team, you can actually have lawyers that are the specialists in the employment, in franchising, in intellectual property, right? And certainly, the bigger organisations do have those streams of lawyers, but they sit within legal. And I think if the general counsel’s done their job properly, then legal is embedded in the business, just fundamentally as an undercurrent. |
| DT: 32:00
33:00 | Yeah, absolutely. I think it’s tempting when we’re talking about the need to really understand the business and be closely involved with the business and be involved in business decisions early to say, “all right, well, put a legally qualified person in every team and then we’ll know right? Then we’ll be involved early“. But as you’ve said, if you’re going to be strategically involved, you need a holistic understanding of the business. You need that bird’s eye view of how the different parts of the business are working with one another, and that’s a pretty good reason why you might have a centrally located legal function that can discuss with one another what’s happening in the whole business at a strategic level. But you’ve also raised something that I was just about to ask you fortuitously enough, which is about reporting lines, because there’s some really interesting ethical discussion about reporting lines in in-house teams. And I might ask you to tell us a little bit about that because there’s some arguments for the in-house team, or the general counsel, to report to the board. There’s arguments for the general counsel to report to the CEO. There’s some arguments against in-house counsel reporting to lower, or middle level, business managers. Can you tell me a little bit about that? |
| DK:
34:00
35:00 | Yeah I mean, there’s no reason why the general counsel should not sit on the C-Suite. Because general counsel is a department head, like the CFO is, like the COO is, like the CPO is, any of that stuff, right? And again, like I said before, you can’t operate in a vacuum. You know, so much knowledge and business knowledge and understanding comes from sitting in a room with the department heads and listening to what they’re doing. Their projects, their drivers, their processes, their strategies. Under no circumstances should a general counsel be reporting to lower-level managers because the general counsel is responsible for the risk and governance in the business. I think on a day-to-day basis, the GCs working side by side with the CEO and the COO, and helping them deliver on what they need to deliver on, for the business. Reporting into the board, absolutely. GCs do have a function to report into the board, but that shouldn’t be their immediate reporting line. I personally believe that reporting into the board is a scenario where there is a need to, for whatever reason, sidestep the CEO and COO and notify the board of an issue. Let’s just say, if there’s an ethical problem or concern. But from a day-to-day perspective, I think the reporting into, if you like, is really the CEO, CFO type situation, because those two roles within the business work hand-in-glove with risk and governance and process and compliance, and rely upon the GC to manage all of that, to talk to them about any issues, to alert them to it. And I kind of always say, “if you don’t hear from me, I’m doing my job. I’m taking the body blows that need to be taken, I’m filtering things through within the appetite and risk profile that I think I have personally and what my role requires. And then to trust in my judgment to elevate things as they need to come up to discuss and to resolve“. That’s how I see it. |
| DT: | Well said. I think, there is that challenge that you described that unlike other employees, you have two masters, don’t you? You’re responsible to your employer, and you have the sort of duties under statute and common law that all sorts of employees have. But you have this obligation to the court and that sometimes means that your ethical duties require you to act in a way that’s not perhaps entirely in the self-interest of your employer. So, you are right, it’s absolutely important that there be a way to report to the board or a means by which the general counsel can communicate with the board. But if that’s the only way the general counsel is being supervised or reporting, then you’re right. The COO and the CEO are missing out on such a richness of information about what’s happening in the legal and risk and governance side of the business that they’re just not able to do their job right. |
| DK: 36:00 | Yeah, exactly. That’s right. They’re involved in and they’re charged with the operational function and execution of the business, and there’s legal hairs all over that. In everything there’s legal. It might be just a simple question, or it might be a large project or piece of work and they’re doing the day to day and legal’s involved in the day to day, so it just doesn’t make sense for them not to be. That’s who they’re sitting side by side with reporting into. I think the limited circumstances that a GC is required to report into, or report to the board, are very unique. They’re very bespoke and they deal probably more so with ethical things than anything else. |
| DT: | So, we’ve talked a bit about the ethical obligations that persist in your practice in-house, just as they would in private practice or in any other mode of practice. How do you balance those with that strategic role in the business that we’ve been discussing today? |
| DK: 37:00 | Yeah, I think our ethical obligations are what they are. They’re no different. In-house lawyers don’t have different ethical obligations to what private practice lawyers do. It’s all the same. We’re all officers of the court. We’re all responsible for our duties. I think the balance with in-house lawyers and ethical obligations is actually balancing our personal risk appetite and our ethical obligations. And I think sometimes it feels like they’re kind of merged, but they’re really not. I think if every business complied with the law, then two things would happen. One industry would grind to a halt, because they would just be so overwhelmed with all the legal nos that they just couldn’t operate. And two, more importantly, for all of us listening, lawyers would be out of a job. And so, the reality is that the client is going to do things that are not strictly perfect, and that’s okay. That’s a risk appetite thing. |
| DT: | When we’re saying that, we’re not talking about flagrant breaches of the law, we’re talking about operating at the edge, where the law might not have caught up, where what compliance means might be unclear. |
| DK: 38:00 | That’s right. It’s quite grey. Exactly. And it’s really trying to decipher and understand what it means. And certainly, COVID is a really good example of how business has had to continue to operate, but within what? I mean, every single day the law was changing. And they just had to keep moving forward because you had mums and dads trying to run a business, and not quite sure if they’re allowed to or not. And if they are, how are they supposed to do it? How are they supposed to employ their staff? All of that stuff. That’s a really good example of how they just had to keep going. |
| DT: | Yeah. |
| DK:
39:00 | That’s that personal risk appetite thing. And as lawyers and in-house lawyers, sometimes it’s really understanding this makes me uncomfortable because it’s my personal risk appetite. We used to be once upon a time, a conservative litigation lawyer, and that’s changed because businesses aren’t necessarily conservative. But when it comes to things like fundamental actions of mischief, that’s an ethical thing and I’m pretty ruthless with that stuff. We have a responsibility, and yeah, okay, we’re embedded in the business, we’ve got to help it move forward. But we’re lawyers first and we’re employees second, and I’m pretty ruthless with complying with our ethical obligations and having a loud voice and having tough conversations if that’s what’s needed to be had. |
| DT: | Thank you for that explanation. I think that’s a really clear demarcation of where things are unclear, where the business is trying to navigate uncertainty on the one hand and that bright line between ethical and unethical conduct on the other. |
| DK: | Yeah. |
| DT: | I think that’s really that guiding touchstone for an in-house lawyer. We’ve talked a lot about the benefits of working in-house today, haven’t we? But one benefit of working in private practice is that if you do have an ethical challenge, there’s plenty of people to ask about it, isn’t there? In a large law firm, you’ve got your own in-house counsel who can usually help you with that stuff. At the Bar you’ve got an open-door policy. You’ve got an open-door policy to talk to partners and senior associates and special counsel about your ethical concerns in law firms. If you are faced with an ethical challenge in-house, where can you go for help? |
| DK: 40:00
41:00 | Yeah, that’s a really good question, it’s a tough one. I think that’s where it’s probably really important for businesses to have an experienced general counsel. I think for junior lawyers the first port of call is always the general counsel to help you thrash things through and to guide you through. And it may well be what we said before, that this probably isn’t an ethical thing, this is just you feeling uncomfortable for whatever the reason might be. But I also think that it’s really important to have that loud voice to be able to speak up. There is a lot of pressure in-house put on lawyers to perform, to deliver, and we discussed that earlier today. But being able to say no, being able to escalate as high as you need to if things don’t feel right for you and they’re not okay. And the difficulty is, if those concerns and that uneasiness comes from dizzying heights, when it comes above you, that’s where it certainly gets trickier. But there’s resources, there’s external resources, there’s anonymous discussions with the Law Society, there’s industry, there’s mentors, there’s friends, there’s any of that kind of stuff. I think definitely there’s a need to reach out and ask for guidance. I’m very lucky that I’ve never been faced with anything like that, but certainly I know that a lot of people are and do and have been quite often. And I think that’s why it’s really important to find a mentor. Doesn’t have to be necessarily in the industry, but to find a mentor through your career, through your development. Someone that you can trust and in a really safe space, discuss things quite vulnerably with them. |
| DT:
42:00 | That’s a great point because I was going to say, Danielle, who would you go to for help? Because of course, as an experienced general counsel, there’s not another lawyer in the business to ask about an ethical challenge. But you’re right, the ethics team at the Law Society are a great resource in any state. I think sometimes in private practice, we might not think to ask there because we’ve got those lawyers around us, but of course it’s a resource available to lawyers in private practice as well. And having a mentor to speak to, and sometimes to give that perspective from outside the business, as well, is such a valuable thing. |
| DK: | Yeah, I agree. And I think there is a lot of value in obviously talking to our family, our partners, our parents, our siblings, or whatever. They give a different advice, but it is quite difficult to get real depth in that because they genuinely don’t really understand or appreciate the intricacies of being a lawyer. But it is also important for that support piece. You asked me who I would go to, I’ve fortunately never had to, but I have some very strong friendships at the Bar people I’ve worked with for many years, and they would help me bounce things off them. But I’m also pretty quick to identify where things make me uncomfortable again, on that kind of ethical v personal risk appetite thing. As loose as hustle-y and as grindy as it might be in-house even to this day after 16 years as a lawyer, I still don’t witness a document unless I’ve seen the person sign it. |
| DT: | Yeah, good. |
| DK: 43:00 | Even if I know them, right? That might seem simple, but when you’re in this busy kind of lifestyle practice in-house. You know the directors, you’ve seen them sign a million documents, you have their electronic signature on file, you know it. It’s very easy to fall into the kind of trap of, “oh, can you just witness this?” I think it’s a slippery slope. Even in my personal life people kind of go, “but you know me, why is it a problem?“ |
| DT: | I know exactly what you’re talking about. |
| DK: | You get it, right? |
| DT: | I have a relative, I won’t say who, but I have a relative who’s very frustrated by this. There’s a few lawyers in the family, none of whom will agree to witness her signature without having seen it. |
| DK: | Isn’t that funny? |
| DT: | And is never very happy to hear that. No, I understand completely. And you’re right, it is a slippery slope. |
| DK: | It’s a slippery slope, isn’t it? Yeah. |
| DT: | Even those basic things we’ve got to stay strong on. |
| DK: | Well, the basics are the most important, aren’t they? They’re the foundationals, and everything grows from there. |
| DT:
44:00 | Absolutely. Now, Danielle, you mentioned that if you’ve got an ethical challenge, that first port of call is always going to be that senior experience general counsel who might have seen this problem before if not in-house, then in private practice. And having that senior legal resource in the business is so important to dealing with these sorts of ethical challenges. I’m sure you’ve noticed, I certainly have, that increasingly start-up, scale up, growing businesses are choosing to hire lawyers who are maybe five years PQE, maybe less maybe three years PQE, to work in-house as perhaps their sole in-house lawyer. That sounds like it might be quite a stressful position to be in for that relatively inexperienced lawyer, and it might be challenging to deal with some of the ethical issues there. |
| DK:
45:00
46:00 | Yeah, I mean, I’ll be quite blunt with you, David. I actually think that’s just fraught with peril on both the company side, but more importantly on the lawyer’s side. We are, as lawyers, mostly as good as how we’ve been trained. And that speaks to a whole other discussion around the importance of training and teaching and mentorship and all of that kind of stuff. But it’s not possible for a three-year lawyer to be able to do a few things – one, identify what the company actually needs from a legal perspective and horizon spot and strategically think, and all of that kind of stuff, when they’re doing it on their own. Two, to be able to have the experience, both in time in the chair, and also in their own ability to be able to identify ethical problems and work through them and be able to have the courage to push back on them. The legal voice doesn’t have to be the one that’s liked. I don’t care if people don’t like me. I’m not in the business to make friends, but I think there’s a real misunderstanding that you need to be liked, you need to be agreeable, all of that stuff. You don’t and you shouldn’t be. Our job is to provide a different view. So, when you’ve got a junior lawyer who hasn’t had the experience of a senior either in private practice or growing up through the business with the guidance of a general counsel. I think they’re really exposed to problems. Not necessarily saying that the business is unethical. I’m just saying that I don’t personally think they will know how to guide the business in the right directions. Because the business also rely on the lawyers to help them there, and if the lawyers themselves don’t know, it’s going to make it difficult. And you’re going to start really falling into situations that as lawyers we shouldn’t really find ourselves in. |
| DT: | Absolutely. And it’s more than just the legal skills, isn’t it? You can be a university medallist and have all of the best legal knowledge available to the business there. But as you said, having the confidence to disagree. And ideally you can disagree in an agreeable way and disagree respectfully and disagree confidently, but it’s so difficult to do that if you haven’t had the experience before. |
| DK:
47:00 | Yeah, it is. And I think as you get more senior you have difficult conversations, whether it’s with clients, with colleagues, with bosses, with whatever it might be. They never get easier, but they just become part of your repertoire. And I just think, you’re okay to tap into those conversations and take the path you need to take with experience. It’s not criticising junior lawyers. I work with some right now, I have some incredible lawyers in the team, and certainly I did at GYG as well, but they needed the guidance of a senior lawyer. And so I think that would be my view on that. And I think it’s really something for junior lawyers to think about. You shouldn’t be quick to get a title, because with the title comes a great deal of responsibility and expectation, and sometimes that can be quite dangerous if you’re not ready for that. |
| DT: | Yeah, absolutely. Now, we’re nearly out of time today, but before we finish up, I wanted to ask you, you’ve been able to develop this skill at working strategically with the business, at two fantastic organisations, GYG and now Nova. If someone’s listening who’s in private practice, or maybe they’re even earlier than that, maybe they’re a law student about to start their career, how can they develop that skill of thinking strategically and working strategically maybe before they go in-house? What’s some skills that they can develop now to prepare for that? |
| DK: 48:00
49:00
50:00 | Yeah, it’s a really great question. I think a lot of the skills is about being in the business and plugging into the heartbeat and understanding the people, the players, the business itself, where it’s headed, where it’s going, where it’s been. But that’s difficult if you’re not in it, right? So, if you’re on the outside of it I think, it’s doing little things. In-house lawyers don’t need to get an email from an external lawyer with snippets of the law. I can look at that myself. I need you to help me find an answer for the business. It’s as simple as the day to day of taking a step back, taking a breath when you’re giving an advice, an opinion, or looking at things going, “okay how would this apply practically? What are some options for them to do?” And I appreciate when you’re junior, it’s very hard to know that because you’re still so green and you’re really fresh off the boat, right? And I get all of that but it’s very easy to get caught up in the kind of cogs and the chain of just churn and churn of thinking like a private practice lawyer. Here’s all the risk, here’s all the possibilities and here’s all the law and it’s very polished and it’s all of that stuff. Kind of go, “how though, is the business going to apply this?” because if I just give them an advice on the law they’re going to probably file it away and then do something different. It’s also about junior lawyers or law students where possible, doing work experience placements. Doing secondments, putting your hand up for a secondment, getting into it doesn’t matter what business it is, it actually doesn’t matter. A business is a business, right? You just overlay the law on top of it. Get into secondments, do that, even if it’s volunteering. When you’re a law student even doing volunteering at legal centres because you actually get to hear real world problems and you get to see real lawyers help those people. And I think it’s very easy for us to get caught up in, certainly in private practice, in the ivory tower of our big law firm. And we forget about the real world. The real world is community legal centres desperately need lawyers to help their members solve their real problems and it’s a great way for law students and junior lawyers to really start to develop those sorts of skills as well. |
| DT: | That’s such an interesting answer. I never would’ve made that connection between developing a skill useful for in-house at a community legal centre, but it’s a great point. In both environments, you’re much closer to the person who’s ultimately going to use your advice. You need to make it practical; you need to make it digestible and you’re dealing with the real-world applicability of what you are advising on. Great tip. Absolutely fantastic tip. |
| DK: 51:00
52:00 | One kind of final example, as I said before, I’ve spent 16 years in private practice. I have litigated, you know, very high-profile matters. I’ve obviously worked in these two incredible brands in-house, but one of the most memorable moments for me as a lawyer was actually at a community legal centre when I was working and volunteering at the Women’s Legal Service in Brisbane. And as I said before, we get so caught up in the day to day. I was at a big law firm. All of these big clients, all of these time sheets, all the billings, all of the things whatever it might be. And I was in the legal centre and the client in front of me was a lady who desperately wanted to get a divorce. Her husband was quite cruel and she just didn’t know where else to turn. And he had said to her that he will give her a divorce if she pays him a certain amount of money. And she was devastated. She had come to the legal centre, she said, “I don’t have the money. I don’t know how I’m going to do this. And I just want to leave this man“. And I said to her, “you don’t need to pay him to get a divorce. You can just fill the forms out yourself and I can help you do that“. And they didn’t have any children, so I could help fill the forms out for her, get them served on him, and the divorce would go through on the papers. And she broke down and cried in front of me. And it was a really humbling moment for me, because the benefit of my knowledge, my experience, my advice, was actually changing her life. And that’s why I use the examples of getting the work in the community legal centres because it helps you put into practice all the things you think you should know or learn, or haven’t yet, or what everyone’s telling you and seeing in front of you. I’m sitting here as a lawyer with the benefit of my knowledge and experience is actually changing someone else’s life. |
| DT: | Absolutely, yeah. And fantastic work and a fantastic mission that all of our community legal centres around the country do. And if you’ve got the time, even if you maybe don’t, volunteering a few hours in the week or month or year is a tremendous way to help that sector and help the thousands of Australians who rely on them. Great advice, Danielle. Well, thank you so much for joining me today on Hearsay. |
| DK: | I’ve had a wonderful time. Thanks for inviting me. |
| DT: | Pleasure. |
| Ross Davis: 53:00 | As always, you’ve been listening to Hearsay the Legal Podcast. I’d like to thank our guest today, Danielle Keyes from Nova Entertainment for coming on the show. If you work as an in-house counsel and you want to listen to more episodes like this one, check out Episode 39 – The Ins & Outs of the In-House Lawyer with Marcus Suliman. If you’re an Australian legal practitioner, you can claim one Continuing Professional Development point for listening to this episode. Whether an activity entitles you to claim a CPD unit is self-assessed, but we suggest this episode entitles you to claim a professional skills or ethics and professional responsibility point. More information on claiming and tracking your points on Hearsay can be found on our website. Hearsay the Legal Podcast, as always, is brought to you by Lext Australia, a legal innovation company that makes the law easier to access and easier to practice, and that includes CPD. And finally, I’d like to ask you a favour. If you like us, please leave us a Google Review. It helps other listeners find us and that means that we can keep making great content. Thanks for listening, and we’ll see you on the next episode of Hearsay. |
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