Team size: Four
What are the projects that you are most proud of working on over the past 12 months?
There is a saying that “the past is in the past, the present is already in the past, and the future is in the making right now”. Rather than dwelling on the past, the growing challenges we face deserve more attention. I would, therefore, like to focus on some of these challenges.
For in-house legal operating in a corporate environment with significant international exposure, the greatest challenge is to keep pace with a quickly growing and frequently changing national and international regulatory environment. In addition to the highly technical requirements that need to be grasped, appropriately understood, and swiftly implemented, penalties and reputational risks are arguably more daunting. Not only are they difficult to predict and quantify, but they are a significant administrative burden. For most in-house legal, there is not enough time (in the day) to deal with the matters entrusted to corporate legal departments, and to do so at a “state-of-art” level. The technical nature of this regulatory environment, both in its meaning and in its concrete impact, requires a thorough knowledge of this new language. Investment in digitalisation and new tools can provide solutions, but not “the solution”, as they are still not entirely reliable or accurate, especially in case of intricate cross-border requirements.
The use of AI-powered tools and the non-violation of confidentiality agreements, for example, is another major challenge. While the use of some AI-powered tools can easily be qualified as a direct contractual violation of existing confidentiality or other agreements (e.g. tools which may store all or portion of exchanged information, and where the AI can be regarded as external contractual party), in other cases such a violation can be more implicit. Indeed, some AI-powered tools can process the data they receive and use it to “tune” their parameters with the remarkable ability to extract useful hints from subtle clues. This could be particularly damaging to companies involved in the research and development of technologies. How should in-house legal respond and protect the company’s interests in such circumstances, without being left behind and unnecessarily jeopardising potential business rewards? Filling the knowledge gap? Undoubtedly, AI can be very helpful, but its systematic use can mean that your brain is not being trained to move on to the next stage of learning and ultimately gaining professional experience.
Another major challenge ahead is compliance with ESG/CS3D and relevant mandatory reporting. If the EU’s approach to data protection has been more or less followed around the world, it does not seem to be the case here. In-house legal departments are expected to guide their companies through ESG/CS3D/reporting obligations, ensuring alignment with their corporate values, but also with the corporate values’ requirements of their business partners. The cascading of such requirements throughout the automotive supply chain is a good example. Some OEMs are already demanding full compliance with regulations that have either not yet been implemented in the local legislation, or the deadlines for implementation have not yet passed. The administrative and financial burden of such requirements affects the competitiveness of the companies concerned as well as their business strategies.
Finally, the loneliness of in-house legal community. It would be great to have one or more dynamic, active and friendly in-house legal organisation(s) where we can discuss, exchange experiences, and support each other, while respecting the requirements of confidentiality and competitive law. Through these organisations, in-house legals can play a key role in the development of the law based on experience gained in the field.
Based on your experiences in the past year, are there any trends in the legal or business world that you are keeping an eye on, of which you think other in-house lawyers should be mindful?
If business is a tough activity, geopolitics is a cruel business. Until recently, legal entities and their management(s) focused exclusively on the economic performance of the business. Geopolitical risks and impacts were, at best, minimised, if not ignored altogether.
Today, all companies, whether they have an international presence or not, are increasingly caught up and directly affected by international relations, international conflicts, sanctions, and economic wars. The TotalEnergies, Lafarge, Alstom, BlackRock, Voltalia, Chevron, Huawei, or AUKUS cases are a good illustration of this reality. The wide-ranging sanctions against Russia, or the entry into force of the US Cloud Act, are excellent examples of the huge impact of geopolitics on companies’ day-to-day businesses and development strategies. Such an impact is not without risks for companies’ business. The extraterritorial application of non-national/non-regional laws and the proliferation of rules as a legal and/or political answer to international issues, increase the risks of conflict of laws and non-compliance by companies, and add a new dimension to need for geopolitical assessment and mitigation.
On the other hand, in 1986, when the ICJ discovered the “savage international custom” in its case Nicaragua vs. the US, it was unorthodox to imagine that, 40 years later, companies would become direct geopolitical actors. The “Responsible Minerals Initiative”, is quite an interesting example of how throughout the entire supply chain, whether voluntarily or to avoid their de-sourcing or global supply chain disruptions, companies have recognised a broader scope of this initiative than what is legally required, covering all minerals and not just 3TG. From a contractual perspective, the growing number of mandatory statements that failure to comply with companies’ codes of conduct will be considered as a material breach of contractual obligations demonstrates that companies are at the forefront of the players who can influence major global challenges ahead. The mirror effect of being such strategic economic actors on the international stage, provides companies with a leverage to steer public policy in their own interests, in some cases proving to be, all things considered, more powerful than governments overall. Concerns have therefore been raised about the responsibilities of companies as key players on the international stage and some companies have taken advantage of the opportunities created by conflicts, as demonstrated by a recent decision of the Frech Court of Cassation.
Companies are not only economic actors, but they are also subjects of and objects of geopolitical considerations. Therefore, companies that are simplistic in their analyses of geopolitical impact are doomed to suffer or disappear. The break-up of The Standard Oil into 39 independent companies, following the US Supreme Court ruling in 1911, and the global consequences that followed are a good reminder of this.
What do you think are the most important attributes for a modern in-house counsel to possess?
Working as an in-house legal can be depicted as being Pythia in the morning, and Cassandra in the afternoon surrounded by Dante’s Inferno and operating in highly volatile, hostile, challenging, competing, and uncertain environment. It can be a rewarding career, but it is not for everyone. There is not an exhaustive list of attributes for a successful modern in-house legal. What is clear, however, is that the skills required are no longer limited to pure legal knowledge.
Today’s in-house legal must be prepared to go beyond his/her specialisation, often unexpectedly, if not brutally. In-house legal operate in a rapidly changing globalised world, where the direct impact of the dematerialisation, digitalisation, or artificial intelligence, can be overwhelming. The in-house counsel’s agility and willingness to learn, either from experience or from the legal community, are a guarantee for his/her adaptability. This encourages an unconventional way of thinking outside the box and, when necessary, rejecting or opposing the way things have traditionally been done. Not being afraid to adopt new solutions to old problems is the greatest privilege for in-house counsel. Indeed, they have a duty to defend the company’s interests and the legitimacy to say “no” when those interests are disregarded or undervalued. Good communication skills, reliability, and accountability to different levels of employees are no longer enough. It is increasingly important for any in-house counsel to master the art of eloquence, persuasiveness, astuteness and the ability to anticipate the major challenges that will have a direct or indirect impact on his/her daily activities, as well as on the development and evolution of the legal profession. The combination of “old” and “new” skills is a great source of “soft power”, which can be an important lever within the organisation and can have a direct impact on corporate strategies.
However, it would be unfair to suggest that in-house counsel are evolving in an idyllic corporate word. Driven by business considerations, in-house counsel are often outmanoeuvred, outdebated or outthought by the commercial departments or general management. In such circumstances, resilience and experience are the only efficient alternatives. Viewed as a “cost-centre” rather than an “added-value” to the business, in-house counsel are often seen as a fire-brigade that intervenes when the point of non-return has been reached. As if that were not enough, everything is “legal’s fault”. It is, therefore, understandable that demotivation, frustration or anger are frequent professional companions. But it’s a good thing. What is better than a good argument and dressing-down by legal to get everything back to truck for the sake of integrity and principles? And a good sense of humour! Let’s face it, every in-house counsel has had a good laugh reading some of his/her colleagues’ exquisite creations and has collected enough stories for the scenario of the next successful series with a reliable storyline. Finally, be the architects of your own destiny, with audacity and humility.