If you’re making decisions that have a legal dimension, it pays to ensure you’re informed.
Nearly 75 per cent of employees would rather not seek advice from their company lawyers about a serious business decision. The desire for ease and proximity means that turning to the person next to them is far more appealing than contacting the in-house legal team. Think of this as having a “desk-side lawyer” – that nearby colleague who offers apparently authoritative business wisdom. Unfortunately, this advice is often given with a complete absence of knowledge about the legal ramifications.
These can be serious. Compliance failures from data privacy alone drive an average of £2.3m in direct costs for businesses and over £160m when indirect expenses like management time and remediation are included. Employers need to find ways to motivate their staff to seek proper in-house expertise, as well as ensuring that self-appointed desk-side lawyers are sufficiently trained to know their limits.
Executives: encourage law and order
First, make consideration of legal risk the expectation, not the exception. Middle managers (not senior leaders) make three out of four legally sensitive business decisions – things like negotiating or signing a contract, or accessing and transferring sensitive corporate information. This means that middle management is the frontline of corporate risk. It is sobering to hear that 60 per cent of them confess to not knowing the legal implications of their decisions, and that they consult the legal department only 31 per cent of the time.
This doesn’t mean that in-house lawyers need to be consulted every time a business decision is being made. Instead, use tone, policy, tools, incentives, and meetings to make legal risk awareness a key element of decision making. Ensure it’s clear that the legal team must be contacted where there is any ambiguity.
Legal teams: be more attractive
You needn’t aspire to Legally Blonde heights, but presenting guidance in a clear, brief and attractive format is crucial to engaging employees. When people see the benefits of consulting their in-house lawyers, they are nearly 50 per cent more likely to revisit the team again with a question or problem. Emails, talks and workshops should strike a chord with people at all levels of a business – or they’ll simply ignore them. Accept that four concise bullets of actionable legal guidance is what executives, managers, and employees may actually need. It may not be legally perfect, but it will drive compliance.
Desk-side lawyers: read up
Whether you are a manager or a junior employee, the chances are that a co-worker has put a problem under your nose in recent weeks. Some of these can be dealt with easily, but at major companies, strategic decisions may well have regulatory or even litigation aspects. It’s therefore important, if you do have desk-side lawyer tendencies, that you’re fully aware of the self-service tools provided by the in-house legal team. Familiarise yourself with risk assessment and mitigation processes before your peers come calling – or just don’t weigh in without the legal department’s support. Doing otherwise imperils you and the organisation.
Everyone else: know when it’s time to consult a lawyer
The in-house legal team may sit on the sixth floor while you’re on the first. They may seem intimidating, boring (appearances can be deceptive) or like they’re going to take a long time to answer your question. But this team can also prevent you from losing your reputation, your customer, or even your job.
An initial conversation with the legal department, attending workshops, and reviewing your company intranet will help you to gauge just when a decision requires a little more than nudging a co-worker. This will save you time in the long run. Some decisions can be taken without legal guidance but you wouldn’t want to make the mistake (or suffer the consequences) of not knowing what those are, would you?
Aaron Kotok is CEB’s legal practice leader.
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