Inside Experts: Risk and Reward for the In-House Lawyer

Eric Esperne Any company, whether large or small, is its own world, with its own rules, its own culture, even its own social classes. Within companies, in-house lawyers are seen with a bit of awe. It's a reflection of the real world. Lawyers have been placed on a cultural pedestal on television and in books and movies (my personal favorite being George Clooney in "Michael Clayton").

Being placed on a pedestal has its pros and cons. People aren't apt to question your judgment. This is a good thing when your company wants to do something that will get it in a lot of trouble and there is no one but you to say "no." When companies are hit with scandal, one of the first questions many will ask is, "Why didn't the lawyers do something?"

Having your say in meetings with little or no questioning is not such a good thing when companies need to make hard decisions about the future. The reality of business is that without risk, there is no reward. In-house lawyers are comfortable in the role of saving companies from peril. They are not so comfortable doing things that may end with negative results, especially government fines and lawsuits. The ability to go forward, end up with nothing or worse and then try all over again is what sets successful business people apart from us. They do what they do and we do law. The same principle applies to non-profit organizations. One group's interests, at some point, are going to run counter to the interests of others.

Many years ago, a president of a company in Phoenix asked me how I take risks. I didn't have an answer for him. He said, "You need to ask yourself two questions: Can you live with the results if things go bad? And can you make them up?" That's a pretty gutsy way of looking at things.

I think a better way for in-house lawyers to think about taking risks is to ask the following (you can substitute an "association" or any other organization for "company"):

  • Does the opportunity come with risks? Risks are real life events that have a quantifiable impact on something strategically critical to the company, like revenues or public reputation. Taking risk is not the same thing as not being cautious.
  • If there are risks, what does the company need to do to mitigate or eliminate them? Is it capable of taking on the risks?
  • How certain is it that the potential risks will happen and that they will be bad for the company?
  • How do the risks stack up against the company's policies? Does management need to make policy exceptions to move forward? Do they need to throw the policies out of the window in this situation?
  • Can the company afford to walk away from the opportunity?

Back in the Dot Com Boom days, I worked for a global Internet company in Northern Virginia. Even though the legal department was in Tysons Corner, I managed, on my own, to get use of a cubicle in the offices next to company's data center in Reston. When I wasn't busy, I would hang out in the network control room, which had windows like an airport control tower and overlooked the data center floor. It was like being on the bridge of the Starship Enterprise, with huge LCD monitors and consoles. I had a specific reason for being there: I wanted to learn everything I could about how a global network carrier operated, or as much as someone with a liberal arts education could. What did they do when a network segment went down? How was data backed up and stored?

You can't help a company make good business decisions if you don't know what the company does, because unless you know what the company does you can't judge the risks it faces.

Having documented corporate legal policies in place is a matter of survival for any corporate law department. In-house lawyers don't have the time to explain over and over the rationale behind why they say "yes" to some things and "no" to others. It also takes some of the pressure off you when you are deluged with work. But are the policies grounded in what the company actually does? Benchmarking policies against other companies' policies isn't enough. Each company has its own executive leadership, its own geographic footprint, its own products and services. In-house lawyers need to put on their muck boots, roll up their sleeves and discover what makes their companies work. This requires them to come down off any pedestals and approach their colleagues with a dose of humility. People aren't going to share what they do with you or the problems they face unless you express a genuine interest.

When in-house lawyers say "no" and the "no" seems to come from on high, without any regard for the company's business objectives, eventually people stop asking. As the saying goes, "It is easier to beg forgiveness than to ask permission." It's not the number of times we say "no" that measures how effective we are in our jobs. It's the number of times we say "yes" or "no" and our colleagues come away, maybe not liking our answer, but respecting the effort we made to give the answer that best serves the company's future.

Eric Esperne, JD, CPCM, is Counsel with Dell Healthcare & Life Sciences in Canton, MA. Eric has been an in-house lawyer for more than 15 years, starting in Northern Virginia where he worked for both government contractors and Internet companies. Eric now resides in Massachusetts with his wife, son and dog. Eric can be reached at Eric_Esperne@dell.com.

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Eric Esperne

Eric Esperne is counsel for Dell Services and is located in Canton, Mass. He has more than 15 years experience as in-house counsel for government,...

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