In this installment of The In-House Advisor, we interview Neal Winneg, who was most recently the General Counsel of Jumptap, Inc., a mobile advertising company, until its sale to Millennial Media, Inc. After starting his legal career at Skadden Arps, Mr. Winneg has been an executive officer and general counsel of numerous public and private companies, including The Learning Company, Upromise and The Princeton Review. Mr. Winneg also teaches in the Transactional Law program at Boston University School of Law.
The In-House Advisor (IHA): The role of in-house counsel has changed a lot over the years. How do you see that role changing going forward and how can today’s in-house counsel prepare for those changes?
Neal Winneg (NW): It’s not news that advances in technology over the last 20 years have created extraordinary opportunities along with concomitant challenges for virtually everyone, both in business and our personal lives. So, too, for in-house counsel. Our businesses are becoming more agile and automated, and they are benefiting from vastly more and better data in virtually all functions. The challenge for in-house lawyers associated with this trend has been the need to handle substantially more complex and technical legal requirements and tasks on a day-to-day basis. Fifteen years ago you might have negotiated a pretty simple agreement with a storage facility to store various company records, and the hardest part about it was determining when various documents should be purged. Today that agreement will be for cloud storage of electronic data, and you have to consider data security issues, EU privacy issues, and a variety of other technical and regulatory issues. The business makes decisions every day that have legal and regulatory implications, and so it has become increasingly important that knowledgeable in-house counsel are available within the business to make quick decisions, or at least identify when specialized counsel should be consulted. Similarly, the globalization of commerce has increased the likelihood that the laws of a variety of foreign jurisdictions may be implicated, significantly exacerbating complexity.
Among the implications of this are that in-house counsel need to be prepared to learn new, technical areas of the law in addition to the areas where they are already strong. In-house managing counsel need to be prepared to hire more specialists (either in-house or outside), and to do so cost-effectively. The days of one or two law firms handling most of a business’s legal needs are over.
IHA: While in-house counsel routinely save their companies money, Legal Departments generally are viewed as cost centers that add nothing to the bottom line. How can in-house counsel get across to the business people the value that in-house lawyers add to the company?
NW: I tend to focus my clients less on absolute cost, and more on the quality of the legal services. At least in my experience, the number one factor on which clients focus in evaluating their counsel is responsiveness, and that is an area where in-house counsel have a leg up on outside counsel, in several respects. First and foremost, we’re physically available. We’re at the meeting when an idea is being kicked around and can offer input on the fly. Or a client with an emergency can bang on our door, so to speak. That’s a lot harder with outside counsel, who simply aren’t as accessible on a minute-to-minute basis. Second, we’re familiar with the business. Most often, we’re in a position to provide advice more quickly, needing less background information about how the business operates, because we already know it. In those circumstances, it also should be less expensive to use us than outside counsel. Of course, it’s critical to develop metrics relating to responsiveness for the entire legal staff, and to evaluate them on it, to ensure that you really do deliver.
One needs to be careful about client expectations regarding cost savings, though. I recall interviewing for the general counsel job at an early stage company that had not previously had a general counsel. As the company had grown, the CEO was becoming concerned about the increased fees it was paying to outside counsel. He hoped bringing in a general counsel would dramatically reduce the costs. I had to tell him (at the risk of not getting the job) that while there would likely be areas where outside fees could be reduced, it was equally likely that once in the job I would identify areas of real legal risk that the business had not previously considered, and that certain other legal costs might increase rather than decrease.
IHA: What should in-house attorneys not say or do to try to show their value?
NW: Legal compliance is important, and it’s a critical part of the job. But in most businesses, it’s not the area that’s generally going to impress the CEO. It’s very hard to demonstrate all the possible costs you helped avoid by being on top of legal compliance. In my experience, lawyers who focus clients on those aspects of the job tend to be viewed as the type of lawyers that say “no” a lot. Focus on those projects that are most aligned with the company’s goals and objectives, particularly on the revenue side of the business: numbers of contracts negotiated and signed; new products vetted and supported; results of client satisfaction surveys; specific areas where you can demonstrate true cost savings by moving from outside counsel to in-house counsel, for example.
IHA: What is the best advice you have received that has helped you succeed as an in-house attorney?
NW: “You can’t know it all, and don’t try to convince your clients that you do.” The legal landscape is becoming more technical and increasing in complexity. Despite this, there is a tendency for the business clients to expect you to know it all. It’s common for the CFO to believe that the reason you were hired was to avoid calling outside counsel, and to put pressure on you to figure it out yourself. Obviously, in-house counsel need to consistently increase the depth and breadth of their legal knowledge relevant to the business they represent. But while many judgments can and should be made by in-house counsel, we also have to know when to get advice. Doing so in the face of a disapproving CFO demonstrates strength, not weakness.