In a conversation with Lawyers Weekly, Kate Sherburn, head of legal at Who Gives A Crap; Jessica Giampiccolo, the managing director of JMLG Advisory; and Simone Vrabac, general counsel at Job Adder, offer their insights into the advantages of cultivating proactive legal environments within organisations. They also delve into the training and resources required to nurture this proactive mindset within organisations.

The benefits of proactivity

Kate Sherburn, the recipient of the General Counsel of the Year award at the 2023 Australian Law Awards, emphasised the significant advantages of implementing proactive legal environments.

She highlighted that such an approach enables organisations to “identify and mitigate potential issues before they escalate, which not only reduces the risks but also the associated costs. It’s always quicker and easier to solve a problem before it really becomes one!”

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By delivering timely guidance and early insights, Sherburn expressed, legal teams can effectively showcase their value within organisations, facilitating improved decision making and enhancing overall efficiency.

“A proactive approach fosters a culture of compliance by design. And when the legal team provides timely guidance and insights, they become a strategic partner, showing the business the value they truly can bring, contributing to better decision making and increased efficiency across the business,” Sherburn said.

“Further, when the legal team isn’t constantly fighting fires, they can look forward and contribute to innovation by identifying opportunities, which can lead to the business having a competitive advantage.”

Jessica Giampiccolo echoed this sentiment, highlighting that establishing a proactive legal environment can substantially lower litigation and legal dispute costs.

“The short answer is, ultimately, it saves a substantial amount of money, time and stress. Often when legal matters arise, both the company budget and that of the legal department can take a big hit. Particularly with litigation,” Giampiccolo said.

By incorporating legal advice during the initial stages, Giampiccolo underscored, legal teams can enhance an organisation’s ability to navigate and manage risks effectively.

“When a proactive legal environment is established, businesses are better placed to manage risk. Cross-functional risk management can be extremely effective as legal departments are able to provide advice to lower the risk of legal matters before a problem occurs,” Giampiccolo said.

Simone Vrabac emphasised the importance of a proactive legal environment, noting that proactive lawyers possess a comprehensive perspective of the organisation. This holistic view not only drives operational efficiency but also ensures that all employees are aligned towards common objectives.

“A proactive legal team is beneficial to the business because proactive lawyers often have a bird’s-eye view across the company and can often help ‘connect the dots’ between functions on key initiatives, which helps drive efficiency and ensures teams are all moving in the same direction,” Vrabac said.

“Lawyers are also smart people, and proactive lawyers can offer valuable insights on issues that may not fall squarely into a traditional ‘legal-issue’ bucket.”

Vrabac also elaborated on how a proactive legal environment strengthens organisations’ compliance culture.

“A proactive legal team also improves your culture of compliance because legal is not an afterthought but is front of mind as a key stakeholder to involve in strategy discussions, projects and initiatives,” Vrabac said.

“Quite frankly, it also makes work more interesting because you get to consider a breadth of issues which span beyond traditional legal lines.”

Training for a proactive mindset

Organisations must embed proactive practitioners into their processes at every level to cultivate a proactive mindset. This integration involves not only placing skilled legal professionals within key operational areas but also fostering collaboration between legal teams and other departments.

Sherburn emphasised that achieving a proactive legal environment requires integrating legal teams in the early stages of projects and strategic planning. This early involvement is crucial for identifying potential legal issues and ensuring compliance considerations are embedded in decision-making processes from the outset.

“To promote a proactive mindset within the legal department and across the organisation, the best thing is to embed it into the processes so it becomes automatic.

“This includes things like including legal into the early stages of projects and strategic planning and establishing risk assessment frameworks for different business functions,” Sherburn said.

Sherburn also addressed how leveraging technology to automate routine tasks empowers legal professionals to focus on more strategic and purposeful initiatives. Organisations can enhance efficiency by streamlining these operational processes, allowing legal teams to dedicate their expertise to critical areas that drive business growth and innovation.

“Leveraging technology is also important, automating and simplifying routine tasks where possible to free up time for the more value-driven work,” Sherburn said.

Giampiccolo pointed out that participating in multiple weekly project meetings is significantly more time-efficient than becoming mired in costly court actions later.

“It is more time-effective to be involved in three to four meetings per week for initial advice/guidance in relation to a project than to be involved in a court action,” Giampiccolo said.

“Really adopting the cross-functional mindset when it comes to managing risk can be highly effective. Meetings involving many different departments such as IT, sales, marketing and legal is what can assist in creating a strong framework.”

By attentively listening to the concerns of various departments and ensuring their involvement from the outset of projects, Giampiccolo highlighted, legal teams can provide continuous support throughout the project life cycle.

“Listening to the major concerns of other departments within the organisation and being involved in projects early on can mean that assistance can be provided from legal each step of the way rather than legal being inundated with legal queries or concerns at the one time,” Giampiccolo said.

Giampiccolo suggested implementing internal auditing processes to enhance a proactive environment further and identify risk areas before they escalate into legal issues.

“I find that internal auditing can work really well to be able to really highlight any potential risk areas and, as such, place a very strong emphasis on a strong proactive focus by internal auditing rather than reactive legal work.

“Communication and relationships are key to making a proactive legal approach successful,” Giampiccolo said.

Vrabac recommended resources such as The T-Shaped Lawyer to inspire legal professionals to expand their organisational roles. This reading encourages them to participate in broader business discussions that extend beyond traditional legal boundaries, fostering a more integrated approach to organisational strategy and decision making.

“The T-Shaped Lawyer by Peter Connor is a fantastic read. It explains how being more than a lawyer and doing more than just legal work is the key to a successful in-house career.

“He gives strategies on how to go about becoming ‘more than a lawyer’ within a business. I’ve read other books on this topic, but this one is the best I’ve read,” Vrabac said.

Overcoming barriers to proactivity

Despite the clear benefits, various barriers prevent organisations from adopting a proactive legal environment.

One of the primary obstacles to fostering a proactive legal environment, as highlighted by Sherburn, is the capacity constraint faced by legal teams.

“A key challenge is the capacity constraint within legal teams. When the team is overwhelmed with reactive tasks, they lack the time and resources for proactive initiatives,” Sherburn said.

She also expressed that other barriers include “cost concerns, lack of awareness among business leaders, a reactive culture, siloed departments and a fear of legal involvement”.

To address these challenges, Sherburn expressed the importance of empowering other departments to manage routine legal matters.

“These can be addressed by empowering other departments to handle routine legal matters through self-service contracts, legal playbooks, and targeted training, freeing up legal capacity and enabling a more proactive focus,” Sherburn said.

“Other things that can help include building strong relationships between legal and the rest of the business and showing the ROI of proactive legal practices.”

Giampiccolo echoed this sentiment, pointing out that time constraints often lead legal departments to implement a “triage” system, where urgent matters take precedence over long-term strategy. She warned how “this cycle can be very difficult to break”.

To tackle this challenge, she noted that training throughout the organisation on the benefits of a proactive legal approach can help shift mindsets and enhance understanding of its significance.

“I have found that training in adopting a proactive legal system can be beneficial company-wide. This helps other areas of the organisation to understand the importance and benefits of adopting such [an] approach,” Giampiccolo said.

Vrabac identified three common barriers that impeded organisations from adopting a proactive legal environment.

These include: “the perception of legal as a ‘blocker’ or ‘sign-off’, not a valued partner”, “business not being aware that something could raise a potential legal issue”, and “lawyers not having a voice on business topics that go beyond legal, e.g., the narrative of ‘that’s not a legal issue so I won’t chime in’”.

Vrabac recommended building solid relationships with senior leaders across the organisation to combat these hurdles.

“The best way to address these issues is to build solid working relationships with senior leaders of your business, ideally C-suite but also other senior leaders in key areas like GTM, product, and marketing.

“You could start with something as simple as setting up a meeting to hear about their current biggest challenges and opportunities. Show an interest in their world, even if it is not purely ‘legal’,” Vrabac said.

Additionally, Vrabac suggested that lawyers should actively demonstrate a keen interest in the broader business context.

“Finally, lawyers should deeply understand things like the health metrics of your business, the strategy of your business and key drivers of that strategy,” Vrabac said.

“If you are willing to offer insights and ideas on those topics beyond traditional ‘legal risk’, you earn a place in discussions that go beyond legal, and this, in turn, gives you the chance to get legal/risk challenges on the discussion table early, too.”