With the goalposts of global business rapidly shifting, today’s corporate legal departments are not just about reviewing contracts or fire-fighting the blunders made by other departments. But how is this new role defined within an enterprise? And what new elements are being adopted to provide better legal protection for corporate activities? We interviewed several senior executives engaged in corporate legal affairs who shared their opinions about the qualities required for today’s highly qualified in-house legal specialist.
I am co-working with an eight-member team, among whom five are legal counsel in charge of different strategic business units, and in different functions. On top of that, we have two IP counsel as we have very proactive IP activities in China.
My team mainly focuses on two aspects. The first is about M&A divestiture and restructuring, which is a very prominent part of our daily job. The second is about our daily housekeeping work, which includes contract management and daily legal consulting, as well as compliance and legal training.
Regarding what core qualities an in-house counsel should have, I would list the following:
- Solid legal education and practice profiles;
- Strong interest in business and sharp business acumen;
- Sound perspective and judgment; open-minded; and
- Mentally and physically strong.
Chief Legal Counsel of Henkel
Greater China and Korea
Xiaomi’s legal team has a very clear vision, that is, to become the best partner of our business teams. First of all, we emphasize the importance of understanding the business, we believe that every good lawyer has solid legal skills, but what really differentiates an outstanding lawyer from others is how deeply he understands the business and the industry.
One of the important issues to building a very successful high-performance legal department is to only hire people who are curiosity-driven, with a very open mind. Because the legal field and the industry are both rapidly changing, only those people can enjoy the lifelong learning experience and tackle the challenges that we are facing every day.
Another point is to identify real leaders from the team – who really has the courage, resilience and wisdom to challenge the status quo and push the organization towards a more optimized and advanced stage. With that I think the head of the legal department also needs to build a work mechanism to facilitate sufficient communications between the specialized teams. Because it’s a very complicated job and we need a multiple-specialized team sometimes even in tackling one project. You can also consider an effective rotation programme to provide continual opportunities for the attorneys.
Our daily work now is to supervise the firm’s compliance work of all our China legal entities including our wholly owned commercial bank, our China securities joint venture, our mutual fund joint venture, our private equity fund, and our qualified domestic limited partner (QDLP) fund in China.
In Morgan Stanley, people in the legal and compliance department are the trusted advisers to business and management. We aim to work right beside the business units. Nonetheless, the legal and compliance department, as the control function, will also make sure that the firm is doing the right thing, and our first client is ultimately Morgan Stanley, not the particular business unit or desk.
Chief Compliance Officer for China
I have worked as head of the legal department for a dozen years. My team-building experience is summarized as follows: First, make a strategy; second, build an organization; third, establish a system; and finally, implement the system.
First, in terms of making a strategy, I believe that any department has its own strategy, value and contribution. What can a legal department do for an enterprise? How do we reflect the value of legal departments? This is an important task for the head of a legal department. The strategy of a legal department should be aligned with the corporate development strategy and adjusted with the business development of the enterprise.
Second, a team needs to be established after the strategy is made. This requires consideration of the corporate management structure and the actual conditions of the industry. For Fox Financial, as an internet finance group, legal work is set according to the following three modules: (1) group legal affairs, including policy research, corporate affairs of group company, corporate compliance and information disclosure, and intellectual property rights; (2) operational legal affairs, which are set according to vehicle finance, housing finance, consumer finance and other business categories; and (3) legal affairs for platforms, including online and offline user-related registration agreements, authorization, ICP licences and other businesses on websites, and APPs.
In addition to building an in-house legal team, team building includes the integration of external and internal resources to establish a mutually complementary team.
Third, establishing a system, namely, how the mechanism works. In addition to basic businesses such as contract and litigation management, this includes the establishment of corresponding policies, processes, systems, cross-department interaction mechanisms, regular exchange and communication. It is necessary to deeply participate in corporate businesses to provide assistance and advice to business departments from a legal perspective, and establish a cross-department system.
Finally, implementing the system. After being established, the system should be continuously monitored, implemented, updated and iterated. The entire system needs to be optimized, using internal and external tools such as intelligent audit systems and databases.
VP & General Counsel
Fox Financial Technology (Hong Kong) Group
At Golden Concord Holdings (GCL), we have 75 attorney in-house counsel, and about 10 attorneys at the parent company level. Almost 90% of our counsel are in mainland China, with others in Hong Kong, the US and Africa. They are engaged in different practice areas including litigation, IP and investment law. We use their expertise to support our business team.
Our legal team has monthly meetings, and for overseas in-house counsel we have teleconferences. During the meetings, we have discussions on the hot topics, recent regulation changes and big projects.
I always tell our in-house counsel that we have a pyramid in our legal team culture. If you can only review contracts or provide support for big projects, you will be at the bottom of the pyramid. So then, how can you become a top tier in-house counsel at GCL? You need to have the ability to influence the board members, or you can introduce business opportunities to our company. If you don’t have the power to influence the leaders from the business side, then how can you manage risks in the company?
Group Legal Department
Golden Concord Holdings
I joined this company three years ago. At that time, we only had two or three in-house counsel working at the group level, and four or five people working in Pakistan. When I joined UEG, I found that we needed a better in-house team to serve the business services group better. So, I changed the whole structure of the group’s legal team.
I hired more in-house counsel from law firms as well as other companies, tripling the size of our legal team. Currently we have 20 in-house counsel working globally, which is a reasonable size and very good for the growth of the business.
First, I tend to hire more in-house counsel with some industry background, because the oil and gas industry is quite unique in terms of required legal skills and terminology. Second, I changed the way the legal team worked. Previously, the legal team worked on an on-demand basis. I made some rules for the in-house team, saying that they have to work with the commercial businesspeople from the beginning of any project, which means the legal team must participate in projects more actively than before.
Finally, we should control the legal risks from the headquarters level, instead of simply assigning in-house guys to work with businesspeople on-site in the project. So, when I joined this company, I immediately came up with specific management rules in order to have better management of the
Deputy General Manager and General Counsel
United Energy Group
Tsinghua Tongfang, as an important participant in implementing the strategy of law-based governance of the country, has always attached great importance to the corporate compliance development. It has always followed the concept of compliance in daily operation and management.
It has urged legal personnel to actively participate in all major business activities of the company, so as to realize the transformation from ex-post remedies to proactive risk prevention and control. It has encouraged legal personnel to use innovative thinking to give suggestions for the business development of the group, and issue legal opinions to support the business growth of the group.
Tsinghua Tongfang’s legal teams are generally divided into three levels, namely: the group headquarters; 10 industrial groups affiliated to the headquarters; and numerous corporate entities affiliated to the industrial groups. We have been committed to the integrated construction of legal teams and the development of team cohesiveness.
As legal work is smooth in some industries but challenging in others, we hope to combine the legal strengths of the entire group to help our teams with legal needs, thus enhancing their ability to solve problems, and to work with external law firms.
From the perspective of added value of legal affairs, our teams have also conducted considerable internal exploration. First, we have opened the WeChat official account of “Tsinghua Tongfang Legal Insight” as a platform for internal and external exchange and co-operation.
Secondly, we have established Tsinghua Tongfang “Law + Forum” in the hope of sharing cases and summing up experiences with legal personnel through internal training. In addition, we will invite external experts including university teachers and lawyers with practical experience from well-known law firms to interpret matters from different perspectives, so as to deepen legal teams’ understanding of laws and policies.
Finally, in the past two years, we have been directly in charge of many corporate external exchange activities, such as the capacity co-operation conference between China and Central Asian countries, in which we acted as the lead organizer, the visit to Tsinghua Tongfang from the Ministry of Commerce of Algeria led by the International Department, Central Committee of CPC, the construction of the “Intelligent Public Security” system by us as engaged by the Ministry of Public Security, and other commercial activities which provide the company with business opportunities and help improve the status of legal departments in the company.
The opinions expressed by the interviewees are their own and not those of their companies. To watch the interview videos, please visit https://www.vantageasia.com/tv/