Innovation can be the difference between success and failure for in-house lawyers

While cutting-edge technology can help companies make profits more quickly, an ‘innovative mindset’ can help in-house legal departments attract the best talent, says Francisco Javier Castillo Palacios

The business world is constantly evolving and markets are also evolving very quickly, so in-house legal departments have to become more innovative in the way they operate. Innovation, in this context, is the ability to do business quickly at any time regardless of where you are in the world or what time of day it is.

Using the best technology is a key part of being innovative. Most multinationals, including Dow Chemical, are innovative in that they are always looking for the best information technology from all over the world, as ultimately, this will save on costs and increase the quality of legal services. Companies are primarily looking for profits in a shorter timeframe, while preserving a good professional environment. Technology helps with that. And this is as true for the legal department as it is for any other parts of a business. We don´t look for detailed legal memorandums; in the legal department we look for a very focused opinion and in that respect innovation is key as technology helps with this way of working.

However, there can be obstacles to innovating and making better use of technology. Local laws and the local languages have an impact. Sometimes, with technology in the context of global companies, you forget that there are certain things that will continue to be done in the ‘local’ way – such as taxes, invoicing, or requirements for payment terms, amongst a long list of matters. When you try to centralise or use innovation to try to become global, it can create conflict with local practice and real life. Countries’ practices and processes may not fit into the global structure. Innovation is very connected to globalisation. Innovation is about speed and efficiency and its purpose is to increase earnings in the fastest way possible. Sometimes, when designing a global product, you might run into problems in individual countries due to their rules or daily practices.

Being more innovative and making better use of technology helps to attract the best talent. Young people want to work in a modern environment and having an innovative mindset in the legal department is crucial. Young people do not want to work in an environment with a constrained authoritative structure. Micromanagement is outdated and young people want a more open and transparent dialogue. They want to be heard and they want to have open communication. If a company doesn’t understand this they will not attract the best talent and will not be competitive in the market. Companies’ culture and environment are very important.

In-house legal departments that want to innovate must think in the medium to long-term. In the short-term, working in a more conservative style may seem like it is more efficient in terms of cost but this is not the case in the medium to long-term. In the medium to longer-term, it is better to have the innovative mindset. If you continue as you are, in the short-term you have preserved your old way of doing things but in the medium to long-term, you will lose talent, you will lose people. The innovative mindset is quicker and more fluid. You must be open to this, if you want to retain talent and increase loyalty to the company. Don´t think of short-term costs – it will involve investment in technology and training – but think of the medium and long-term benefit it will bring the company.

In-house legal teams can learn from other sectors when it comes to innovation because general counsel tend to work in silos. We only interact with people in our marketplace and therefore don’t get fresh perspectives. It is important to be in contact with other sectors, other companies. You can be at an event, for example, and hear something, even in an informal conversation, and learn other ways of doing things, or other ways of treating people.

Those companies who innovate are very quick and autonomous, those who don’t, aren’t. You may survive, but how well? Such companies might exist in the market but it doesn’t help them when they interact with companies that are more innovative. You could lose a big deal because you do not respond on time, or a tender, a bid, or an offer. There are always competitors looking for an opportunity. If there are other in-house lawyers or law firms that are quicker to react, this can mean the difference between success and defeat.

Francisco Javier Castillo Palacios is lead counsel EMEA at Dow Ibérica.

Laura Escarpa