General counsel | McDonald’s Philippines (Golden Arches Development Corporation)
Rosa Margarita A. De Guzman
General counsel | McDonald’s Philippines (Golden Arches Development Corporation)
Team size: Seven
What are the most significant cases or transactions that your legal team has recently been involved in?
I was promoted to general counsel right after the Covid-19 pandemic, at a time when the McDonald’s structure, comprised of close to 700 stores, employing over 50,000 people, and with over 100 independent franchisees, was recovering. The system was challenged to not just respond to the shifts brought about by the economic and social downturns protracted by the lockdowns, but prepare for future growth. A tall order which was coupled with the changes in how we work – from the acceleration of digital transformation, adoption to hybrid work set-up, and the gaining popularity of ChatGPT, among others.
Given these changes, I knew then that running the legal team which traditionally operates as a transactional resource would no longer be enough – laws and regulations are easily accessible at a click of a button, letters and contracts can be written by artificial intelligence, and cases and claims can be outsourced to external counsels. I needed to transform and rally the in-house team to be agile, and stay relevant to an already established brand like McDonald’s. As general counsel, I revamped the vision of the legal department from mere technical experts and gatekeepers of compliance to strategic business partners and accountable leaders of the organisation. This change required us to somehow abandon our law school training, and alter our default first question for every transaction, from “is it legal?” to “is it right?” – not only for the company, but also for our business partners, for our employees, and, ultimately, for the customers that we need to serve. Providing advice on what is legal is easy, a task that any lawyer who has successfully hurdled the bar, can competently do. We look at the law, interpret it, and find its application to the transaction at hand. To find the right thing to do in every situation, however, requires more introspection, a deeper understanding of the business and the different needs of the people that we serve. We needed to infuse a more humanistic approach. It takes more from a legal practitioner to do so because the right thing to do almost always requires a higher standard beyond legal compliance.
As we redefined legal’s role within the structure, our department became a champion of one of the core values of McDonald’s Philippines, which is integrity. Beyond merely requiring compliance, the values program in McDonald’s intends to provide each member of the McDonald’s system a better understanding of its ethical standards: how to use them in its decision-making, in the conduct of day-to-day operations, and how it can drive both individual and organisational performance for the long-term. As strategic business partners and accountable leaders of our company, our legal team became more active members of various cross-functional teams that creates plans, encourages debate, drives insights, mitigates risks, and paves the way in achieving our targets sustainably and, more importantly, ethically.
Why are in-house lawyers well-placed to drive change in their organisations?
We are change enablers. In-house lawyers are valuable to companies who are serious in driving change in their respective organisations because our strengths usually complement and help address the common pitfalls to managing change and risks. At some point, any company who is undergoing a significant change is likely to encounter any of these obstacles: a) a change-resistant culture; b) lack of effective communication leading to misalignment; and c) lack of foresight to anticipate and address risks.
To counter a change-resistant culture, I believe that it is key to have the top-down commitment and engagement across all stakeholders. As in-house lawyers, we are well-poised to obtain the buy-in and promote any change considering the span of our day-to-day involvement across all departments in an organisation. Our understanding of the perspective of each business unit becomes an advantage because advocating for the change can be tailor-fitted depending on the motivations of the concerned department.
Moreover, communicating in a language that our business units understand and appreciate is our strength. I believe language compatibility is very important, integrated with the counsel’s knowledge of a company’s culture, and often lost with external counsels (even those renowned to be the best communicators). Poor choice of words, even hifalutin ones can lead to misunderstanding and misalignment, which at a time of a major change, can be costly. Thus, as in-house counsels, we are at an advantaged position to drive change not only because we are able to communicate a change comprehensively but more importantly, effectively.
Finally, our training as lawyers gives us a unique advantage of being skilled in anticipating risks. Often, business units who are tasked to drive change gets understandably excited and focus immediately on the execution and targeted results that potential risks are overshadowed. Nonetheless, as any company who has undergone change knows, it is very rare that any change, planned or realised, will translate to a perfect and flawless execution. As such, in-house lawyers whose legal training demands that we prepare for worst-case scenarios becomes a crucial balance to call out risks, offer diversity in thought, and internally push for plans to have contingencies. In 2020, at the height of the pandemic, I was given an opportunity to lead a cross-functional team to transform some of our manual document routing and signature process into a digital system. The challenge was not only to create a process that is secure and legally acceptable, but also a system that will create efficiencies across department users.
Admittedly, in its initial implementation, we encountered several obstacles as I outlined above but, in the end, I am very proud to have overcome these obstacles. My background and training as a lawyer and my experience in communications helped but, more than this, the relationships that I have built across the system and my familiarity on its many motivations is key to move the change forward.
As we live in a fast-paced world today, what skills will a corporate legal team need to succeed in the modern in-house industry?
Leadership skills and all the nuances that such skills entail encompass what I believe any legal member in an in-house environment should aspire for. As a corporate legal team, we are thrust into a position wherein our word is shield and our expertise trusted and quoted as part of long-term projects and plans. What we say forms and grounds many of our leadership’s major decisions in driving the brand forward. Considering this, I think it is essential for any member of the legal team to adopt the mindset of a leader and arm himself or herself with all skills necessary to support such mindset. Emotional intelligence or the ability to understand, manage or even influence one’s own emotion is a skill not often associated with being a lawyer but is something that I believe we should actively develop as leaders.
As lawyers, legal dramas often portray us as obnoxious jerks whose main passion and purpose is to defeat and destroy our opponents. However, this portrayal is also the bane of corporate legal who needs to work collaboratively with the business units. To be able to effectively manage risks for the organisation that we are a part of, the corporate legal team must be a part of difficult conversations, but to encourage the business proponents to include us in these important conversations, they must trust our emotional reactions to very uncomfortable situations. I find that this skillset is a basic expectation from leaders because we are wary of the effect of an emotionally unstable leader to an organisation but I also believe that any corporation will benefit from a highly emotionally intelligent in-house legal team because of their ability to remain objective and to provide sound advice, even in high-stakes and high-stress circumstances.
This brings me to another skillset that I believe any corporate legal member should develop – decision-making. Decision-making for me is the ability to take a stand or position usually under uncertain conditions. Traditionally, as lawyers, we provide our clients with options or lay down pros and cons but decision-making and the accountability that comes with it are left for the business proponents to decide. However, this blurred guidance oftentimes led to prolonged discussions amongst the defined perspectives of individual departments without any clear decisions.
As an in-house team, I believe that we are in the prime position to offer decisions because, unlike business proponents who are limited by their scope, Legal’s involvement in almost all aspects of the business gives us an advantage to advance decisions holistically for the benefit of the organizstions that we support.
Another important skill is agility. While many laws take time to draft and enact, company plans and policies can change in an instant and we need to be able to not just keep pace but outpace. This includes learning, unlearning, and re-learning biases, knowing trends, and being able to adapt quickly to new technology.
Lastly, I think coaching skills is an underrated skill but is crucial to cope with the tireless demands for support from legal departments. Oftentimes, I am asked on the level of difficulty in managing a lean legal team and working with the various business units and my answer has always been the same, “the difficulty of our job is highly dependent on the level of skills of the people we work with.”
Throughout my career, I have worked with complex legal and business issues that felt easy simply because I worked with some of the most highly skilled and productive individuals. As in-house legal work has increasingly become more complex, I think that drive to empower the people we work with has become elemental to adapt and to succeed in the modern in-house industry.
How do you suggest in-house lawyers build strong relationships with business partners?
I firmly believe that strong relationships begin and end with trust and the relationship between in-house lawyers and their business partners is no exception. We must be intentional in building trust to create a kind of relationship that fosters open communication and encourages collaboration. More than the common ways to build this trust, however, I think that our virtues as a person and our credibility as in-house lawyers should be at the forefront when dealing with our business partners.
Credibility takes time to build and can only be successfully accomplished with a track record of dependability. We must be the legal experts that we advertise ourselves to be. We must consistently show up for the commitments that we make. And, we have to unfailingly deliver on promises or otherwise extend ourselves to our limits to attempt it. There is no workaround on building credibility. It entails hard work, reliability, and time. Showing our moralities as a person is another matter entirely but is something that I believe is equally important to build authentic relationships with our business partners. It requires a certain vulnerability to expose what matters to us most.
My standard has always been to lead with kindness. Throughout my tenure in my current organisation, I have remained steadfast in choosing kindness when managing my Legal team and dealing with our partners. While it hasn’t always been easy as my resolve on this matter has been tested many times over, I find that working with the business units have become easier over time as my proponents increasingly believe the genuineness of this intention. For me, personally, I find that my worldview and the kind of support that I was willing to give also changed once I became clear on the value that I needed to espouse most. Repeatedly choosing kindness required me to assume the best intentions from my proponents. It obligated me to allocate sufficient time to understand their concerns. More importantly, leading with kindness removed many barriers to sincerely and honestly connect – to build strong relationships.
Thus, to build strong relationships requires that we be intentional in fostering trust between in-house lawyers and our stakeholders. And, for me, to do this successfully requires that we bring our most important moral standard to work and to show up and prove our credibility every day.