Building a successful in-house legal department involves selecting the right people for the right positions, deciding which lawyers to assign to which tasks, instructing and training them, convincing them to work as a cohesive unit rather than a bunch of individuals, and of course addressing and resolving conflicts and crises – all while fulfilling the critical function of legal advisor to the rest of the company. It’s not easy.
A panel of experts at this year’s Balkan GC Summit – all from heavily regulated industries, in which the legal departments are often placed under unusual pressure – provided insight on how they had overcome these challenges, to successfully build and effectively manage productive and efficient in-house legal teams.
The Interview Process
The size and importance of significant in-house legal teams is clearly growing. According to Miljan Malovic, Head of Business Legal Advisory at Banca Intesa, “experience suggests that having in-house lawyers may be a more adequate solution in the long run since they get to know the very core of the company and the industry.” As a result, he said, “it is crucial for any company to plan ahead and develop each position, with a clear succession plan in place.”
And a critical element of this process – perhaps the most critical – comes in identifying and hiring the right people. “In an environment as complex as legal you must learn what main tasks and competencies should be taken into account when selecting a candidate,” said Marijana Poznan, the Regional Head of Human Resources and Regional General Counsel for Southeastern and Central Europe at Fresenius. “You pick the person as much as the person picks you. Often times the candidate does not have the chance to learn all the requirements of a position in advance, and so we give them a chance to get proper training and to integrate. We also try to detect pitfalls well in advance before investing in hiring someone.”
How to identify the best candidates is an inexact science, of course, but the specific questions asked during the interview can lead to important information. “Well, there are several key questions,” said Misa Vorotovic, the Senior Councel for Southeastern Europe at Phillip Morris International, “but I think that a good thing to always ask is, at some point, what they believe to be their biggest shortcoming, and why. Honesty can be spotted right here, with this question, and this trait is in and of itself very important, as is the self-awareness that a candidate can demonstrate as well.”
Malovic, by contrast, said that he approaches each interview differently, adapting his questions to the conversation. “I cannot really say that I have questions that I like more,” he said. “I really prefer pressure-free interviews. If you can relax in an interview with a candidate – that’s when you can feel that they are the right candidate.”
“From my experience, the most relevant question is a simple one: ask candidates to describe what they would do, or how would they handle, a conflict situation,” Poznan said, explaining that this question allows candidates to demonstrate a strong personality, as well as offering insight into how they would approach problems. Unfortunately, she admitted, “most candidates simply offer theoretical answers; rarely does anyone dive into the issue head first and really give a good answer.”
Some General Counsel like to pull the rug out from candidates to see how they react under pressure. Gligorije Brajkovic, Head of Legal and Compliance at UniCredit Bank Serbia, for instance, said he relies more on a situational change than a specific question, to try and put the candidate off. “I like to just switch to English at some point during the interview, to see how the candidate reacts and if they pick it up.” he said. This, he believes, allows candidates to demonstrate their ability to react quickly and communicate clearly.
Even with the most thorough interviewing process, not all hiring decisions are successful, of course. Brajkovic recalled a hire who, though an amazing candidate on paper, turned out to be something very different. “This person had a fantastic CV, rocked the HR process, made the whole selection sound like a fairytale – and this was for a senior position,” he said. “A few months later, this proved to be a total disaster. This person was unable to complete simple tasks, which is a huge issue when you work in legal. We realized that we overpaid, and at the end of the day what was done was not on par – not only not with a senior, but not even a very young junior.” Still, even when necessary, terminations are difficult. “It was very hard to expel this person from the team later on,” Brajkovic conceded. “It was difficult for the team, a crash for them for sure. Justifying the call to them was not easy.”
“We have not had any hiring failures yet,” Vorotovic said. “All the people we hired at PMI were really good hires, speaking directly for our main legal team.” Which is not to say that everything is always rosy. “We did have some not-as-good experience on alternative forms of employment,” he conceded, referring to “a secondee that underperformed for a year.” Ironically, he said that, in that case, it was obvious to him within the first 15 days that what happened was “a bit underwhelming,” but because the immediate superior to the secondee was “a great colleague and, in this case, a good person willing to help,” they were able to avoid the worst potential consequences.
A Smooth Integration
Once the candidate is hired, the next step is to integrate him or her into the team. “It’s very important to get people involved and introduce them to the firm, to help them learn whom they’d be communicating and working with most,” Brajkovic said. “We try and let new folks see who they will be sharing most of their time with, while also trying to plug them into team activities.” The frequency of the process can affect its smoothness, of course. “We don’t have frequent hires,” he said, “so the structure of this part of the team assembly process we wing on a little bit.”
Poznan says that, at Fresenius, “the first week can be quite intensive,” but claimed the company’s holistic approach to the hiring process and corporate functions helps make the process more-or-less painless.
Malovic explained how Banca Intesa makes sure its legal hires are performance-ready. “Once the newest addition to the team is on-boarded, we introduce them to team members as well as internal procedures and procedures to help them integrate into the organization,” he said. “After that, they work with their new mentors, their team lead, or me, and then we assign them a challenging task on purpose.” This process, he explained, “allows us to observe the new team member carefully and gain valuable insight into how they behave.”
“The most important thing is to have newcomers get to know the organizational structure and the business itself,” Vorotovic said. “Of course, there are a lot of internal rules and policies that must be processed – we give them a welcome package of sorts, on this – and we also assign a buddy to new people. The new hire follows their buddy, learns who does what, sits where, and what happens next. We have people who will work mostly with locations outside of our HQ travel to those places – say Bosnia, Macedonia, or other parts of Serbia – and get to know the team that works there. The best way to get to know the business is to talk to people from different departments, and this achieves just that.”
Having personnel based in offices abroad can be useful as well. “It may be fruitful to have somebody in a remote location,” Vorotovic said. “For the past few months we have had a colleague abroad who is working directly as a team member in another affiliate management team and it has been rather successful cooperation. That person has helped the other affiliate of PMI and will come back richer for an experience that is not available in the home affiliate.”
And then comes the sensitive and potentially highly disruptive issue of remuneration. “Boy, this can be a tough one,” Brajkovic said. “Sometimes we do bonuses based on evaluations, and people can fall through the cracks here even if they performed admirably. Remuneration ceilings are defined on a curve, so it depends on the rest of the team as well, although we do have some clear indicators, like what time someone punches in and out, how many tasks they completed, and so on.”
Bonuses can be a key part of keeping team members happy as well. “Fresenius has a bonus system in place for all employees,” Poznan said, using “whatever we can quantify via tangible metrics, but considering certain company goals and qualitative goals as well, which are not as precise but are good indicators as to how somebody operates.”
Poznan insisted, though, that success in this regard comes from being clear-eyed and objective in the evaluation. “We try to be as objective as we can,” she said of Fresenius. “We know what people have done, we know what operations they are involved in, and we know what their appropriate bonus system would be like,” she said. “We follow people closely and reward them for the job they do.”
Similarly, Vorotovic reported that PMI has a “very precise reward scheme in place,” under which employees receive awards based on projects they work on if a task is fulfilled and if their personal contribution is worth rewarding. “The most important thing is that employees are adding value to the company,” he says. “The law department awards its people on a project basis, so there are clear windows in which employees are given a chance to shine and step up.”
Running the Team
Finally comes the process of actually managing the team on a day-to-day basis.
Vorotovic says that, in his small team, “the working environment and the atmosphere are really pleasant.” According to him, “with everyone knowing their portfolio and tasks, there is a clear division of duties,” but of course people are willing to pitch in when necessary. “More experienced colleagues in certain areas of work help others when need be, and vice versa.” He added that it is important that members of his team agree that “team spirit takes a more prominent place to individual goals.”
Vorotovic describes his management syle as being “as natural as possible” while leading by example. “I am always honest with my people and give them feedback straight away when a situation occurs, rather than saving everything for the year-end review,” he said. All the same, he said, “I also learn a lot from my people, and I try not to micromanage them, but rather give them freedom in their work.” He reported that, so far, his style seems to have worked, as his team “reacts positively and responds with professionalism, team spirit, and dedication.”
Malovic reported that he strives to implement an impartial approach in managing his team. “This means that I make no decisions when I’m angry, and I make no promises when I’m happy,” he said. “I try to create an environment which is conducive for a positive feel in our team. I offer to give each member of the team a chance to express themselves, all in an effort to do a more efficient job, but also to make everyone happy.” Ultimately, he said, “team members know that they can always count on me, that I’m always there to listen to them, to help them, and to offer support.”
In Fresenius’ legal team, Poznan feels that the atmosphere is “rather friendly and supportive,” with everyone focusing on teamwork and getting all the gears in motion, working as one. She said that her leadership style is “democratic, actually – I like to be perceived as a source of support for my teammates while striving to identify development opprotunities and chances for everyone.” She proudly described her team as consisting of “exceptionally hard-working and talented people,” and noted that team members “have exposure to unlimited opportunities for personal growth each day, given the regional nature of our work.”
“To maintain a succesful team along a healthy working environment is more challenging than one would expect,” Brajkovic laughed, noting that “permanent empowerment,” most efficiently provided in the form of continual professional development, is required to truly inspire employees. “This builds confidence for people and establishes a strong relationship within the team based on mutual respect and trust.” Ongoing professional education hones not only legal expertise, Brajkovic insisted, but also softer skills, including “strong ethics awareness, good overall business skills, and interest in new technologies.” According to him, “enabling team members to access various sources of knowledge (like training courses and joining associations dealing with regulatory issues) and encouraging the development of soft skills is key to building a strong and a successful team.”
Ultimately, Brojkovic provided a colorful analogy in describing his personal management style. “I see my way of team management as a coach would on a football or a basketball team: I focus on finding the right position for the right player, after conducting a lot of analysis in an effort to define their role precisely.” Although he laughed that some coaches use strong language when dealing with their players, he insisted that a “pleasant atmosphere is key to properly motivate members on a team,” and said that there is no upside to behaving like a drill seargent. Ultimately, he said, respect, honesty, and integrity are key values to be communicated and passed on. “Transferring a spirit of responsibility onto the team, and simultaineously the client, is the main goal.”