Architecture of Deals

Duc TrangLast year my team of lawyers had our annual offsite meeting in Athens, Greece. Besides the sightseeing and team bonding, we also got schooled … by Duc Trang. As I wrote at the time, Duc Trang a senior legal exec

now trains lawyers and other professionals in business acumen and is due to come out with a new book about the Architecture of Deals and how to design transactions. But for our Athens adventure, Duc gave us a session on how to analyze a business’ competitive position in order to make better strategic decisions. along to run a training session on how to analyze a business’ competitive position in order to make better strategic decisions.

Duc has just published Architecture of Deals: Strategies for Transactional Lawyering about helping transactional lawyers like myself and those in my team become more effective at what we love doing: helping our clients meet their business objectives. You can read more about the book here.

His European book launch is in London this week, but let’s see if we can get him to come to Madrid later in the year.

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The Spanish Chapter of the ELTA and Rethinking the Lawyer’s Value Proposition

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I am very honored to join the Spanish chapter of the European Legal Tech Association and head its section on skills and training. Yesterday, the chapter, led by María Jesús González-Espejo and Laura Fauqueur, presented the Spanish team to the Ilustre Colegio de Abogados de Madrid (ICAM). Each of the section leads in attendance — including Carlos Martín Ugalde, Paloma Aparicio, Moisés Barrio, Manuel Deo, Alberto Dorrego, Gonzalo García Valdecasas, Juan Manuel Moreno (for Javier Martín), Mariló Pardo, María Belén Pose, Pablo Rabanal, and myself — were asked to describe what we hoped to achieve within our respective areas.

To be quite honest, I hadn’t put much thought into what I was going to say. Even though I am fluent in Spanish – having lived in Spain for almost two decades – I am not as good of an improviser in Spanish as I am in English. But when the deputy of digital affairs from ICAM, Esther Montalvá, opened the event perfectly hitting the nail on the head with the challenges and opportunities facing the legal profession, I knew exactly what message I wanted to convey: Lawyers need to  focus on and reinforce our original value proposition:

  1. We are your confidants.
  2. We are your advocates, here to defend your rights and your interests. We are not mere traffic lights signaling when to stop and when to go.
  3. We are communicators.

As such, to be an effective lawyer today and tomorrow, you need to improve how you gain and keep your clients’ trust, how you defend their interests, and how you communicate with them, their customers, regulators and other third parties.

At least that was what I wanted people to hear, so I was happy to read in the Lawyerpress.com that that is more or less what I actually said (in Spanish):

Lo importante es preguntarse, en este contexto, cómo podemos los abogados seguir aportando valor”, reflexionaba Eric Napoli durante la presentación de la ELTA española. “Creo que, a pesar o gracias a la tecnología, podemos poner en valor tres de nuestras características que no debemos olvidar. Somos personas de confianza, como los médicos. No somos meros asesores: ayudamos y defendemos los derechos de las personas. Y somos, o deberíamos ser, grandes comunicadores.

My plan is to organize a discussion open to the public on this topic in July. Stay tuned!

Business Strategy for Lawyers on a Saturday Morning

534FA431-48B2-49A8-9AB8-BE0307F6E654.jpegA few Saturdays a year, I teach a course in Business Strategy to junior associates at Uría Menéndez through the FT/IE Corporate Learning Alliance at the IE Law School in Madrid. It is an awesome program that gives Uria’s young lawyers training in business skills that are essential to becoming more effective lawyers in today’s demanding and ever-evolving marketplace.

As great as that sounds, while I wait for the students to arrive, I can’t help but feel some sympathy for these guys who are about to be subjected to my monologues on lawyering and business strategy for five hours on a sunny Saturday morning.

Digital Transformation In-House: it takes Two to Tango

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This week I was very fortunate to have attended the first of a three part workshop on Digital Transformation for Chief Legal Officers held by the Instituto de Innovación Legal in Madrid. A special thanks to María Jesús González-Espejo and Laura Fauqueur for the invitation!

It was fascinating to listen to the other participants share their experiences about the pressures their teams face in the Spanish marketplace. Most were chief legal officers and general counsels from Spanish companies or offices, and while the team I manage and the business we support are global, the challenges are the same: how to deal with containing costs, regulatory uncertainty, adapting to change, evolving skills, risks to our companies’ reputations, and how to reinvent ourselves and the value that lawyers add to our in-house clients.

We also had two practical examples of the use of artificial intelligence for the automation of contract generation and claims management and discussed what legal officers should look at when selecting a contract management tool. One of the best lessons that came out of this what that automation cannot be done in a vacuum. In other words, it is not something that belongs just to the Legal Department. You need the support and buy-in of your internal clients, aka the Business.

From our experience, automation makes a lot of sense for the Business. It not only helps in terms of simplifying the customer experience and speeding up the contracting process — bringing in revenues quicker and decreasing administrative costs — but in theory should also improve post-contract account management. Standardization should significantly make the lives of your billing departments better, making it much easier for them to prepare invoices and collect fees. Account managers — especially for those with large portfolios — will also find it easier to engage with their customers over the life of a contract. Implementation and delivery teams should enjoy the benefits of standardization and simplification, being able to quickly identify customer requirements and better allocate resources over multiple projects. For these reasons, the work flows and automation should be developed in a way that has the end-user experience at the heart of the design and benefits all of your internal stakeholders. But start small. Don’t be overambitious.

At first many lawyers — obsessed with making sure that all t’s are crossed, i’s are dotted and no loophole is left un-closed – distrust automation or at least fear that it will render our work irrelevant. But with the simplification of menial tasks, we lawyers can focus on what really adds value and where the exciting work begins: helping our clients succeed. Once we reach that realization — as we have in my team — we not only welcome that task, we encourage it.

But there is a but: it takes two to tango. I can only simplify, standardize and automate what my business colleagues are willing to do themselves on their end. Simplification takes more discipline from our sales colleagues who ultimately will have the harder task of selling a one size fits all model — as opposed to something tailor-made — to the customer than it does from us. How many times have you heard: “Just give me a one-pager”? The Business demands a simple, short contract, but when it comes to negotiating the commercial terms, they want all the flexibility in the world, and that flexibility means tailor-made, non-standard contracts. So the next time someone comes to you demanding simplification, force them to begin with the commercial terms and go from there.

It takes two to tango. We’re ready to dance. Are you?

Why Technology Favors Tyranny

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You all are going to think I am the Grim Reaper of new technologies, crying that the sky is falling at every turn. Yes, I am using this blog as a forum – amongst other things — to discuss the difficult decisions that businesses, lawyers and society need to face when looking at how new technologies like Artificial Intelligence, Blockchain and Biometrics may impact our lives. (examples, here, here and here).

Working for a tech company that invests millions in innovation, I am very interested in seeing how we can use new technologies to improve society. But in order to do that, we need to be very vigilant. The consequences of not doing so could be disastrous and significantly change the course of humankind.

Am I exaggerating? In a must read article in The Atlantic, Yuval Noah Harari (author of Sapiens: A Brief History of Humankind and Homo Deux: A Brief History of Tomorrow) makes precisely that argument:

More practically, and more immediately, if we want to prevent the concentration of all wealth and power in the hands of a small elite, we must regulate the ownership of data. In ancient times, land was the most important asset, so politics was a struggle to control land. In the modern era, machines and factories became more important than land, so political struggles focused on controlling these vital means of production. In the 21st century, data will eclipse both land and machinery as the most important asset, so politics will be a struggle to control data’s flow.

Unfortunately, we don’t have much experience in regulating the ownership of data, which is inherently a far more difficult task than regulating land or machines. Data are everywhere and nowhere at the same time, they can move at the speed of light, and you can create as many copies of them as you want. Do the data collected about my DNA, my brain, and my life belong to me, or to the government, or to a corporation, or to the human collective?

. . . Currently, humans risk becoming similar to domesticated animals. We have bred docile cows that produce enormous amounts of milk but are otherwise far inferior to their wild ancestors. They are less agile, less curious, and less resourceful. We are now creating tame humans who produce enormous amounts of data and function as efficient chips in a huge data-processing mechanism, but they hardly maximize their human potential. If we are not careful, we will end up with downgraded humans misusing upgraded computers to wreak havoc on themselves and on the world.

If you find these prospects alarming—if you dislike the idea of living in a digital dictatorship or some similarly degraded form of society—then the most important contribution you can make is to find ways to prevent too much data from being concentrated in too few hands, and also find ways to keep distributed data processing more efficient than centralized data processing. These will not be easy tasks. But achieving them may be the best safeguard of democracy.

The world my children and their children will inhabit will be vastly different from ours in ways we cannot even begin to imagine.

When in Greece, Know that You Know Nothing

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I expend a great deal of hot air preaching both here in this blog and in the classes I teach to young professionals about how important it is for lawyers, especially in-house counsel, to understand their client’s business, industry and strategy.

Two months ago, my team together with my manager Jackson Pek held our annual team building event in Athens, Greece. Jackson brought along two senior GC’s (in experience not age), Duc Trang and Evangelos Apostolou. Duc now trains lawyers and other professionals in business acumen and is due to come out with a new book about the Architecture of Deals and how to design transactions. But for our Athens adventure, Duc gave us a session on how to analyze a business’ competitive position in order to make better strategic decisions.  I hate to use the term, but it was “awesome”.

When you are the one in front of the group doing all the talking, you often forget that there is a lot of value in being the one who is listening and learning. So it was very humbling to learn from Duc. His very simple approach to assessing a company’s relative competitiveness enables lawyers (and other corporate support functions) to better engage with their clients as more effective business partners.

In today’s corporate world, HR departments spend a lot of time building up their employees’ important soft skills, but at the end of the day, little effort is made to teach business acumen. I can’t stress enough how much value legal teams get from the sort of business skills training that Duc offers, and he has a unique ability to put it into the context of what we lawyers do in our every day roles. In fact, by the end of our first session, we were already analyzing our own internal client’s competitive position and brainstorming about improved strategic approaches and better ways to focus our support. Again, it was “awesome”.

Then there was the icing on the cake. My team and I got to hang out in Athens with Jackson, Duc and Evangelos, and I got to pick their more seasoned brains with lots and lots of questions about how to be a more effective business partner and a better manager for the amazing team I work with.

It reminded me of Socrates’ “the only thing I know is that I know nothing”. Efharisto, there is always something to learn and luckily someone to learn it from.

Solutions Not Problems

Dr._No_-_UK_cinema_posterI have written before about how effective lawyers focus on providing solutions, as opposed to acting like a mere traffic light that says stop or go. A few months back, I was to talk about an experience that had an impact on my career development. I told the following story about my first day at a tech start-up more than a decade ago:

On my first day at the start-up where I previously worked, the CEO and founder who had literally made hundreds of millions selling businesses he had founded, proposed a certain marketing campaign. I sent him a lengthy email with a very well-reasoned description of why his idea was misguided. He called me into his office and said, “Eric, I know you are very smart, but I didn’t hire you to tell me that my ideas are bad. Either you make them better, come up with a better idea, or don’t come back to work tomorrow.” I was very embarrassed because I knew he was right. So often we lawyers get caught up in telling the clients what they shouldn’t do, when we need to focus on providing solutions. Whenever I find myself becoming a nay-sayer, I remember that conversation and what my role is supposed to be.

Here is a good check list of things legal teams can do to avoid becoming the “Department of No”. Nevertheless, finding solutions is easier said than done.

When I had written about what it takes to be an effective in-house lawyer back in April, one of my favorite business-side colleagues sent me a message asking to put my money where my mouth was on a particular transaction we were working on. My team had reviewed a prospective customer contract and identified dozens of potentially unacceptable terms, and my internal clients were not impressed. In that instance, I had to explain that we weren’t trying to “kill” the deal, just describe the ugly commercial conditions hidden in the contract, a document that they likely had not reviewed yet. Contracts aren’t really about the law. They are mainly about the business, so often times lawyers are simply informing our clients of the inconvenient reality of what the terms of the deal are.

But point taken. Lawyers shouldn’t aspire to be mere messengers and contract readers. We need to find ways to make a deal better than the one sitting on our desks. In the last two weeks, I have had to remind myself of that story from my start-up days to make sure I was part of the solution, not the problem. Just always keep in mind that if you ignore the problems, then you are not providing a solution either.