In-House-Latest-Issue 5-ALL PAGES

NZLawyer In-House
May 2013 Issue 05
Being an‘agent
of influence’in
the procurement
of IT systems
School’s out?
Not a chance...
Keeping an eye
on the trends
Goldsponsor

Manythankstooursponsors:
Silver SponsorsGoldSponsor Bronze sponsor
2 NZLawyer In-House
in this issue
May 2013
in this issue
editorial note
14
22
8
Theever-changinglandscapeforin-housecounselinarapidly
growingcompany 4
By AmberTrebitsch, CarlaWellington, JaneWellik, and Meryn Hemmingsen
BeinganAgentofInfluenceintheProcurementofITSystems 8
By Simon Martin, Edwin Lim, and Anchali Anandanayagam
Makingmeaningfulconnections 11
Angela Jacobsen explores how making connections can lessen feelings of professional isolation
School’sout?Notachance… 12
Helen Mackay talks with Craig Sisterson about what’s ahead for in-house counsel as the local
legal profession moves towards mandatory continuing professional development
HeadsUp:Sweepingchangesinhealthandsafety:Anewchallenge
forcorporatelawyers 14
By Hanne Janes, partner, DLA Phillips Fox
Keepinganeyeonthetrends 17
Angela Jacobsen reviews the global landscape for in-house legal teams
In-Housecounselandtheartofinfluencing 20
By Emily Morrow
WhatistheNon-MonetaryValueofIn-houseCounsel? 22
Natasha Mellersh finds that showing‘value’ is key for in-house legal teams
Angela Jacobsen
angela.jacobsen@lexisnexis.co.nz
I
attended a meeting recently where we
approached the subject of being busy. It has
become an, almost, stock answer for me; be
it with friends or colleagues, when I’m asked
how I am, my answer is inevitably“busy”.
I’m sure that many of you are likely to feel
the same. And, yes, we are busy; our workloads
never get smaller, and expectation on our
delivery always gets higher. But what are we
busy with? How much of it can be avoided by
tweaking the way we work? How can we be
more effective and make a bigger impact?
The theme at this month’s CLANZ
Conference is“Agents of Influence”. As in-house
lawyers, you play a critical role in protecting
and shaping the companies and organisations
you work for, whether it’s those who work
directly with you, the board, or anyone else
who instructs you. Much of the time you’ll be
instructed when the issue or risk is already
there, so, in essence, you’re putting out fires.
As an agent of influence, you play a more
strategic role: learning about all aspects of your
company or organisation, getting to know your
clients’individual needs, foreseeing issues and
risks before they arise, and then influencing
accordingly.
Last week, I attended a lecture organised by
Auckland University Law School, at which the
United States Attorney General, Eric Holder, was
speaking. As one of the world’s most powerful
in-house lawyers, Holder spoke of the best,
and worst, parts of his job – mobilising 160,000
members of the Department of Justice and
“having the opportunity to shape the American
legal system”were among the things that
Holder relishes. But it was refreshing to hear that
Holder also has bad days – dealing with“toxic
atmospheres”inWashington when it comes
to disputes, like increased security checks for
purchasing guns (which Holder supports), that
“get in the way”of what would make sensible
policy.
Of the responsibility upon Holder’s
shoulders, combating terrorism, human
trafficking, and corruption are among his
highest priorities. And along with an over-
arching duty to“protect the most vulnerable
members of society”, he must also fight to
protect the safety and civil rights of every US
citizen. In a time of“unprecedented difficulty”,
it’s fair to say that Holder is“busy”!
So how does one of the most powerful
global legal forces deal with the pressure?“We
are not a country that has all of the answers,”he
says. Adopting a collaborative approach with his
team and global counterparts, partnering and
learning from one another, is key for Holder to
reach meaningful agreements. He also admits
to having to tell his boss, President Obama,“I’ll
get back to you”, when he needs some time to
stop and think about questions posed to him
that he doesn’t know how to answer.
We don’t have all of the answers, but we
sure can influence others with our answers. I
hope you’ll find some compelling inspiration
in this issue of NZLawyerIn-House. As always,
a big thank you to our sponsors and authors,
and if you see me at CLANZ do come and say
“hello”.

Lexis®
Visualfiles Corporate Counsel
Improving productivity for In-House Counsel
For more information on Lexis Visualfiles Corporate Counsel contact us today
at 0800 800 986 or visit www.lexisnexis.co.nz
Seamlessly move between files, incoming and outgoing correspondence, online legal research and
reporting as a result of using the powerful capabilities of Lexis Visualfiles Corporate Counsel.
Improve productivity through document automation, electronic file sharing, and delivery of tasks
associated with key dates
Manage information integrity with consistent data entry processes, with intuitive tools that help reduce
errors and omission of critical information
With Microsoft Outlook integration and the ability to integrate with other critical systems, you can
maximise the return on your technology investments
©
2013ReedInternationalBooksAustraliaPtyLtd(ABN70001002357)tradingasLexisNexis,LexisNexisandtheKnowledgeBurstlogoareregisteredtrademarksofReedElsevierPropertiesInc.,andusedunderlicence.
EH0513CW963
Our primary aim in the decision to use Lexis
Visualfiles was to improve the quality of our work
and therefore the quality of service to our clients.
Paul Davey, Crown law.
“ “

4 NZLawyer In-House May 2013
Adapting to the business
Editor/Publisher
Angela Jacobsen
Subeditor and staff writer
Natasha Mellersh
Design
Osmyn Morgan
Distribution
9,900 (publisher’s claim)
Editorial enquiries
Angela Jacobsen
(09) 368 9513
angela.jacobsen@lexisnexis.co.nz
All mail for the editorial department to
LexisNexis, Level 12
57-59 Fort Street, Auckland
nzlawyer@lexisnexis.co.nz
CONTACT
DETAILS
NZLawyer is published fortnightly and is available free of charge to members of the legal profession and CSNZ members. If you wish to be added to
the mailing list please email nzlawyer@lexisnexis.co.nz
Copyright is reserved throughout. No part of this publication may be reproduced without the express written permission of the publisher. Contributions are
invited,butcopiesofallworkshouldbekeptasNZLawyercanacceptnoresponsibilityforloss.NZLawyerispublishedbyLexisNexisNewZealand. ISSN1175-5148
NZLawyer is published fortnightly and is available free of charge to members of the legal profession and CSNZ members.
If you wish to be added to the mailing list please email nzlawyer@lexisnexis.co.nz
NZLawyer In-House
By Amber Trebitsch, Carla Wellington,
Jane Wellik, and Meryn Hemmingsen
W
hen new companies are starting
out, generally little thought is
given to adding a lawyer to the
team.The initial focus is usually
on capital raising and establishing a viable
operation, and any legal issues that do arise are
outsourced to external providers.
As these companies grow and expand -
sometimes at a very rapid rate - there often
comes a tipping point, where a decision is
made to bring an in-house lawyer on board.
These lawyers often face challenges that are
unique to working in a business undergoing
rapid growth or change.
In order to better understand these
challenges, we spoke to in-house counsel in
a number of companies undergoing rapid
growth and/or change. They gave us valuable
insights into the skill sets that are most
valued in such an environment, the unique
challenges that arise, and ways that counsel
seek to manage those issues. We also spoke
to several lawyers who regularly advise start-
up companies.
When to hire
The decision to hire an in-house lawyer
is often not made until fairly late in the
game, when the company is past the
initial establishment phase. Retention of
The ever-changing landscape for in-house
counsel in a rapidly growing company
institutional knowledge is also a significant
consideration, according to Tim Matthews,
general counsel at Two Degrees Mobile
Limited. In his experience, outsourcing
is good as it gives a deeper pool of legal
knowledge in specific areas. But there
comes a point where the benefit of retaining
institutional knowledge outweighs the
flexibility that outsourcing offers.
Sacha Judd, a partner in Buddle Findlay’s
corporate and commercial team, believes the
reasons for delaying appointing an in-house
counsel may be twofold.
Judd, who regularly advises start-up
companies, commented that start-ups can
be reluctant to deal with lawyers, including
external lawyers. This can arise because they
have either gone to the wrong type of law
firm which doesn’t understand the issues
they’re facing, or they’ve dealt with the
wrong department within a law firm, eg, a
technology start-up consulting with an IT
lawyer, when what they actually need is basic
corporate structuring advice.
The other factor, according to Judd, is
New Zealand’s DIY“Number 8 wire mentality”.
She sees start-ups as being wary of spending
money up front on legal advice, when any
legal risk seems a far off and nebulous notion.
For Xero, a company founded in 2006
that is now listed on both the NZX and ASX,
an in-house lawyer was appointed when the
scale of operations became such that they
needed someone who knew the business,
the stakeholders, and the issues, and who
could manage the myriad legal issues, while
not necessarily dealing with all of them

5NZLawyer In-HouseMay 2013
personally. According to Natasha Hubbard,
general manager of human resources,“it
was a natural point in the business life cycle
where it warranted having a dedicated head
of legal...when you are successful you want
to ensure you are growing responsibly.”
Hubbard says that the founders of Xero have
always been respectful of expert advisors and
conscious of following best practice in their
business, so it wasn’t a hard sell to bring on
their first in-house lawyer.
The growing cost of outsourcing legal
work can also trigger the decision to appoint
an in-house lawyer. According to Rebecca
Janes, general counsel for Icebreaker Limited,
this was the motivation for Icebreaker
bringing a legal capability in-house:“They
looked at the global legal budget and saw
that they could justify having an in-house
counsel. They needed someone to do the
majority of the legal work and also manage
the external lawyers – it becomes a significant
part of a finance person’s role to manage
external lawyers and it just makes sense to
have a person dedicated to that.”
This is reflected in the success of the
appointment of Shane Bidois, corporate
counsel of MetService New Zealand.
MetService now has 250 staff based in
New Zealand, Australia, Asia, and Europe.
Bidois estimates a 40 per cent decrease in
outsourcing legal matters since his role’s
inception. He attributes a significant part of
this to being able to identify legal issues at the
onset, and being able to chat with external
providers briefly by phone rather than the
time and cost involved in non-legal staff
meeting with external legal providers each
time an issue arises.
In some circumstances, the decision to get
a lawyer involved will be made earlier in the
piece. This was the case for Powershop, an
online electricity provider and wholly owned
subsidiary of Meridian Energy which brought
Monique Greene on board as legal counsel a
year before Powershop was launched. Greene
was initially brought in on a part-time basis
as the company couldn’t, at that time, justify
allocating resources for a full-time person.
Greene is both general counsel and
on the management team of Powershop,
and has responsibility for legal, regulatory,
governance, human resources, and
stakeholder relations. She was working
in Meridian’s legal team doing work for
Powershop, along with other legal work
for Meridian, when the chief executive of
Powershop decided they needed an in-house
lawyer. According to Greene, he foresaw
various legal, compliance and regulatory
risks and identified the need for a lawyer to
effectively manage these risks.
We noticed that companies in highly
regulated industries tended to bring in an
in-house counsel rather earlier on than in
companies operating in a less regulated
sector.
We need a lawyer. Now what?
Once a company has decided that it needs
to hire a lawyer, it needs to carefully consider
what the main focus of the role will be.
For example, Victoria Stewart, a partner at
Simmonds Stewart which deals with a lot of
start-ups, particularly in the ICT space, notes
the focus for many start-ups, particularly
those in the knowledge economy, is on the
global rather than the domestic market. This
can mean that they tend to buy more legal
expertise in overseas jurisdictions than the
domestic market and accordingly will factor
this into their hiring decisions.
Icebreaker, in a nod to the global outlook
of the company, originally had a US lawyer
based out of Portland before they decided
to bring the position into head office in
Wellington and appoint Janes.
Matthews of Two Degrees suggests that
it’s crucial to think carefully about the legal
expertise needed for the company both
now and in the future, bear in mind your
anticipated growth, and then take on the
person with the experience to meet the
company’s longer-term objectives.“Generally
start-ups need someone with a strong broad
commercial background, to deal with the
multitude of things that come across the desk,”
he suggests. They may also need an added
bent, for example telco experience is essential
for a senior legal role with Two Degrees.
Janes suggests that to identify the ideal
attributes required from your first in-house
lawyer, that companies monitor the legal
spend for a while. This can effectively create a
job description and give an idea of what will
be expected of the new lawyer coming in.
Hubbard reiterates the need to undertake
a scoping exercise before someone is brought
in. She said that Xero took a lot of time to get
the process right, including seeking advice
from all internal Continued on page 6 ➔

stakeholders who had legal needs to help
understand all stakeholder requirements. This
helped to confirm that there was enough work
for a full-time role that would keep someone
engaged and motivated. They also got
external advice on the recruitment process,
and had external lawyers from law firms that
are partnered with them to sit in on candidate
interviews.
Greene recommends that start-ups
consider not just the legal aspects of the role
but also the risk management aspects of
someone who is a legal resource, and to think
of lawyers as risk managers rather than purely
legal advisors.
Attributes and experience needed
Of course the exact experience and skill set
that will be required of an in-house lawyer
will differ between companies. However,
several common themes emerged from the
people we spoke to about the experience and
attributes necessary for an in-house lawyer in
a high growth company.
A key theme was the need for an in-
house lawyer to be flexible and agile in their
approach. Bidois stated that it’s important
to keep an open mind and always be adding
value. Be an enabler, not a disabler. Find
ways to make a company’s vision a reality.
Bidois wears many hats as Corporate Counsel,
including that of Company Secretary.
Accessibility to staff is a major component of
the role, and water fountain discussions / walk
ups are an integral part of the success in this
type of role.
Matthews also recognises that in-house
Counsel need to be outgoing and positive.
He has a number of walk-ups during the
day and“it’s really important to build good
relationships with your client.You need to
be able to spend time in conversation ... it’s
sometimes hard to get the balance right in
relation to tackling technical work in a quiet
space and keeping in touch with the client.
You need to be adaptable”.
As an in-house lawyer it is likely that an
incredibly wide range of legal issues will come
across your desk and you need to be able
to respond quickly and appropriately. When
a start-up company is in its infancy, it may
also be common for a legal counsel to take
on responsibility for non-legal roles, such as
managing the human resources function.
Hubbard stresses the importance of
counsel being able to change their plan for the
day as issues arise, and being commercially
savvy about time management.“Undoubtedly,
the pace in an in-house role in a high-growth
company can be intense and relentless, and
the ideal in-house lawyer will need to thrive in
an environment that has high volume, a fast
pace, and a wide variety of work,”she says.
Another key theme that emerged was the
need for counsel to be able to identify legal
issues and risk quickly, rather than being
merely the technical expert. Hubbard sees a
key skill for an in-house counsel as being the
ability to ”diagnose and prioritise”, to clearly
identify the issues with the most risk and
prioritise these, including knowing when to
bring in specialist help. Often companies will
seek someone with general legal experience
as their first legal appointment, because of
their ability to identify risk across a range of
areas within the business.
Many articles about in-house lawyers say
they need to be commercial. They must cut
through the legalese - plain English is key,
opinions and long technical emails do not fit
within a commercial environment. In-house
lawyers must deliver concise and pragmatic
advice in a format that is easily digestible.
Challenges faced
Interestingly, the challenges faced by lawyers
within a growing or changing company are
part of the appeal of the role, and add to their
interest and engagement. One interviewee
made the point that, contrary to popular
perception, they actually work longer hours
in their in-house role than they had in private
practice. However, they are so intimately
engaged with the business and understand
the drivers of the legal work, and so feel less
resentful of those long hours than they might
in private practice.
Challenges or mistakes identified by those
interviewed include:
❯❯ Learn the business before making too
many recommendations, as every business
has different plans and goals and it pays to
know those before jumping in to make too
many changes.
❯❯ Maintain resilience in yourself, and your
team, in the face of a relentless pace of
growth. This is partly a question of hiring
the right type of person. It’s also about
crystal ball gazing, in terms of predicting
future workflows. One interviewee
conceded that they should have hired
more lawyers sooner, but they kept
expecting the peaks of work to subside
to enable them to get to the less urgent,
but still important tasks. What actually
happened is that their in trays and hours
just got bigger, until they were almost too
busy to take the time required to recruit.
❯❯ Develop solid relationships with your
client. Be accessible and take time to talk.
A brief conversation at the water cooler
may eliminate hours of work down the
track.
❯❯ Be aware that when you become known
as the internal legal resource, more legal
work than anticipated will eventuate – the
sorts of things that would have been
glossed over or considered too minor to
bother briefing external law firms will
suddenly find a home at your desk.
The Way Forward
Pundits do not foresee significant growth in
the number of‘start-up’legal roles in New
Zealand in the near term. In part, this reflects
the wider economy as well as a natural
parsimony of entrepreneurs operating in
a cash-strapped environment. It is also
symptomatic of the global focus of many
such companies. However, it is apparent
that when a company reaches that tipping
point between outsourcing and in-sourcing
legal advice, there can be significant benefits
both in terms of risk management and
cost containment, and that the benefits to
be gained by lawyers working within this
environment far outstrip merely continuing
to develop their legal expertise.
Continued from page 5 ➔

Expert Career Guidance
A Selection of Our Current Opportunities
As New Zealand’s leading recruitment specialists for the legal professional community, our dedicated team is qualified
to assist you in career management and recruitment practices.
Our national team works on a confidential basis to assist the profession (both employers
and job seekers) with strategic advice in identification of talent, career pathways
and opportunities. Our contacts, insight and experience provide us with a depth of
understanding within the legal professional world that is unparalleled.
At Momentum Legal we provide the inside knowledge of the profession, developed
through consistent and ongoing investment in New Zealand’s best professional legal
networks. This allows us to have a window into the differing organisational structures,
sector specialisation and opportunities within a wide range of legal career pathways.
If you are looking for holistic and tailored career advice and talent management, we
are here to help.
Commercial/Property – existing partners or seniors ready for
partnership – options available within established firms. If you have the
makings of a client base, contact us to discuss options. Auckland CBD &
North Shore.
33122 Senior Criminal Lawyer – Category 3 or 4 required. Mentoring,
leadership, high calibre trials.
33160 In House Commercial – global business. Come in as the MD’s
right hand to strategise, negotiate and close deals.
33164 Banking & Finance 2 – 4 years – top tier.. If your current firm isn’t
a culture match for you, there are alternatives, and the top tier are not
all the same.
33205 PPP Lawyer – know of anyone coming back from OE who has
picked up some solid PPP experience? Very rare opportunity.
32686 Employment Lawyers 2 – 4 years – in demand! Various
options available - filling fast. Some straight employment and mix of
employment/civil.
32513 Commercial Property 2 – 5 years (x 2) – top Auckland firms.
Experience gained from mid to large firms, or solid experience from
within a provincial firm highly desired.Set yourself up for the future.
32639 Commercial Property Intermediate – this role is made for
a social person who loves the technical side of law, as well as client
interaction. Fun, committed team.
33208 Senior Property / Commercial - fast track to partnership.
Family focussed firm. Client base desired.
Contact Meryn or Amber for these
Auckland opportunities
JN32632 Senior Associate / Partner – Bring your
clients to the table. Visionary firm. Wellington.
JN33238 Elder Law expert – great career opportunity.
Well established firm. Supportive, friendly
environment. Nelson.
JN33340 Litigation lawyer – 6+ pqe. Top Tier firm.
Contribute to excellence. Wellington.
JN33143 Junior litigation lawyer – capable, pro-active,
willing to learn. Be mentored by experts. Mid-sized
firm, Lower Hutt.
JN33281 Environmental Law solicitor – 2+ pqe, High
quality work, high quality firm. Outstanding firm.
Christchurch.
JN33288 Employment lawyer – 5+ pqe. Ministry
role. Excellent written and verbal skills. Varied role.
Wellington.
JN33106 Senior Property lawyer – highly reputable
firm for competent, confident and career focused
practitioner. Christchurch.
JN32898 General Practice – Junior/intermediate level.
Busy, supportive environment. Lower Hutt.
JN33248 Ministerial Writer – short term (2-3 months).
Experience in Ministerial writing / OIA. Ministry.
Wellington.
Contact Jane or Carla in our
Wellington office
We are seeing more contracting roles come into the market, and are aware of several senior in house roles coming up in the near
future. Please contact us if you would like to be kept informed about these opportunities as they arise.
Firms are seeking senior associate/partners, particularly in property law. Wellington has a constant stream of policy roles at all levels,
plus intermediate/senior roles in private practice. Go to www.momentum.co.nz/search-jobs daily for any updates.
For our Wellington office,
please call 04 499 6161 or contact
Carla Wellington
carlawellington@momentum.co.nz
Jane Wellik
janewellik@momentum.co.nz
For our Auckland office,
please call 09 306 5500 or contact
Meryn Hemmingsen
merynhemmingsen@momentum.co.nz
Amber Trebitsch
ambertrebitsch@momentum.co.nz
Jane Wellik Carla Wellington
Amber TrebitschMeryn Hemmingsen

it procurement
T
oday, information technology forms
an important part of most businesses.
The procurement of any IT system is
typically accompanied by a myriad
of contracts that govern the licensing,
development, installation, and support of the
software, hardware, and other components
of the IT system. As businesses become
immersed in a sea of technology, in-house
counsel for both suppliers and customers are
frequently involved in advising and assisting
their businesses in the supply or procurement
of those systems.Through their involvement,
in-house counsel can, starting from the early
stages of any IT system procurement, influence
the supplier-customer relationship.
By engaging the supplier or the
customer (as the case may be) in the right
conversations from the outset, in-house
counsel may be able to assist the parties
to achieve a fair and equitable deal more
quickly, as well as manage expectations
to avoid frustration, and possibly discord,
between the parties during contractual
negotiations and once the contract is on foot.
Typically, the relationship between
suppliers and customers of IT systems is
a long-term one. Ensuring a transparent
solution-focused relationship between
the parties from day one will help to
strengthen both businesses and can help
achieve mutually beneficial outcomes for
both businesses through all stages of the
procurement project. As with any successful
relationship, key success factors include
establishing each party’s expectations
Being an‘agent of influence’in the
procurement of IT systems
By Simon Martin, partner, Edwin Lim, partner,
and Anchali Anandanayagam, senior associate,
Hudson Gavin Martin

Good ideas are elusive. Building your
idea into a business requires experience.
Sometimes you have to start again.
We have a passion for technology and
intellectual property and how they affect
business. It’s what we do because we
like doing it.
www.hgmlegal.com
Technology & Intellectual Property Lawyers
Level 8, 2 Commerce St
PO Box 105900, Auckland City
Auckland 1143, New Zealand
TEL +64 9 308 7300
FAX +64 9 308 7301
info@hgmlegal.com
Ideas
Ideas
Ideas
Old
New
Same
Ctrl
Alt
Del
Ideas
Ideas
Ideas
Never
Seen
Before
Sure
Fire
Winner
from the outset to minimise any misunderstanding further down
the track, and to proactively address issues before they turn into
problems.
In-house counsel (whether for the customer or the supplier) can
play an important part in ensuring the relationship has a sound
basis and influencing the way this relationship is structured. From
our experience, there is immense benefit if in-house counsel get
involved in IT procurement projects early before any contracts are
put on the table - in many cases, once the contract review stage is
reached it may be too late for in-house counsel to have as much
influence over the deal. Ideally, in-house counsel for a customer
should be consulted prior to going to market in search of a vendor,
and in-house counsel for a supplier should be consulted prior to
responding to a Request for Proposal, tender, or otherwise.
Once you are involved by the project team, there are a number
of questions you can ask that will help tailor the deal, even before
the contract negotiation stage, in a manner that is mutually
beneficial to each party. These questions fall into three main
categories.
Understanding the expectations and
requirements of your business
Whether you act for the customer or the supplier, it is important
to understand the drivers for the project. This will help you ensure
that the deal that is eventually documented achieves the business
outcomes you were looking for. In particular, you will need to
work with the business to determine its priorities – is a particular
outcome really a priority for the business or something that is nice
to have?
For example, as a customer you may be looking for a turn-key
solution where it is a priority that the supplier is a‘one-stop shop’for
all of the functionality and services the business requires, and one
that will be ultimately responsible for the entire project. If this is the
case, then a solution that leverages the supplier’s multiple partners
in the region is not going to meet the customer’s needs. If you are
licensing software from the supplier (such as an Enterprise Resource
Planning (ERP) system), can the supplier provide the services that
you require to implement and support the solution, or can another
supplier provide those services? Although the business may be
able to benefit from the in-depth and valuable knowledge and
experience that the supplier has in its own products (which other
suppliers may not have), in the event of a failure by that supplier
to provide the services or to the levels agreed, can the software be
implemented by a third party , while retaining the software licence
with the supplier?
As a supplier, the business may be looking to offer significant
savings on licensing fees early in the relationship on the
expectation that these costs can be recouped in later years. If this is
the case, then allowing the customer to exit the arrangement at will
or at a low termination threshold will not be attractive. As another
example, the business may be trying to‘break into’the market with
its products and services. If this is the case will the business pull out
all stops to get the customer’s business and, if so, does this clash
with the risk profile of the business? What will the business get back
in return – the right to use the customer as a reference site for its
products or services?
Once you understand what your business’s expectations
and requirements are, it is important that you stay involved in
documenting these expectations and requirements. Further,
you should not be limited to just advising on the legal contracts,
such as the services contract governing the implementation. You
should also review any statements of work which are created under
the relevant services contract and, which on the face of it, are
commercial and/or technical documents. In our experience, a well-
drafted services contract is sometimes undermined by statements
of work that lack sufficient detail, are Continued on page 10 ➔

inconsistent with the services agreement, or
do not place definitive commitments on the
parties. In some cases, statements of work may
amount to agreements to agree or resemble
marketing brochures and it is therefore
important that the statement of work is
drafted in a way that makes it clear what each
party will do, what is being delivered and
when, how much it will cost and so on.
Understanding the expectations and
requirements of the other party
Once you understand the expectations and
requirements of your business, you should
undertake the same exercise from the
other party’s perspective. Ask yourself what
might be important to them and what risk,
obligations, or liabilities might they want
your business to assume. Understanding the
end game for the other party will help you to
strike a deal that is reasonable and fair to both
parties. It will also enable you to identify areas
where compromise is possible and areas that
cannot change. Drawing these out early can
ensure that time is not wasted where a deal
cannot be done.
For example, as a supplier it is important
to establish whether the IT system is business
critical for the customer. If it is business
critical, then it is likely that the customer
will look for strong recourse in the event
the system does not function or perform as
expected – if your business is not willing to
provide adequate warranties in relation to the
functionality or performance of the system, or
is not willing to offer extensive service levels
and related service credits if those service
levels are not met, then the customer may be
reluctant to put its business at risk and may
walk away from the deal.
It is equally important for the customer to
understand the motivations of the supplier
in entering into the transaction. For example,
it may be that the supplier’s software used in
the IT system is licensed and then configured
for use by the customer. If this is the case,
it is important to establish early on each
party’s expectations as to payment of the
licence fees. The supplier’s business model
may require recognition of the licence fees
from the date of delivery of the software to
the customer. However, from the customer’s
perspective, payment of the licence fees from
day one may be unacceptable on the basis
that the software is of no value to it until all
of the acceptance tests for the configured
software are successfully completed.
Understanding the consequences if
the relationship does fail
It is important to understand from the outset
how bad things could get if the relationship
breaks down. In IT procurement projects
sometimes it is difficult for parties to walk
away if problems arise.
In the case of the customer, too much
money, time, and effort may have been
invested for it to terminate the contract and
source another solution.
For the supplier, its reputation may be
at stake if it cannot deliver a solution that
meets the customer’s requirements – the
New Zealand economy is small enough that
it does not take long for word to spread to
others about a failed solution or relationship
(just consider how some failed IT projects
have recently been reported by the media
and the negative effect this has had on one or
both parties).
It is therefore important to mitigate
the risks of the relationship failing by
ensuring well-established, and open, lines of
communication between the parties to avoid
misunderstandings and allow identification
and management of issues before they
become problems.
However, despite each party’s best
intentions, some relationships do fail. So what
are the kinds of issues you should consider
prior to, and during, contract negotiations to
mitigate the fallout of a failed relationship?
Here are a few examples:
In the case of the customer
is the solution provided by one supplier or
multiple suppliers?;
❯❯ if there are multiple suppliers, who is
ultimately responsible for the solution
(is it one of those suppliers or is each
supplier responsible for the component it
supplies)?;
❯❯ are there other suppliers in the market
who can implement and/or support the
solution?;
❯❯ is payment due up front or is it payable on
a milestone basis once the solution (or its
components) are tested and accepted?;
❯❯ if the business is considering terminating
the contract, what assistance will the
business require from the supplier,
following termination, to transition the
services to a third party?; and
❯❯ will the source code for the supplier’s
software be held in escrow and can it be
accessed on termination of the contract?
In the case of the supplier
if the contract terminates will the business
require the customer to pay for all work-
in-progress regardless of the state of
completion?;
❯❯ if pricing has been calculated on the
expectation of a fixed term, then what
will the supplier be looking to recover if
the agreement is terminated early at will
by the customer or for the customer’s
breach?;
❯❯ if the business is providing assistance to
the customer to transition its services to a
third party, in what circumstances will the
customer pay for those services?; and
❯❯ what will the business’s response be if the
customer requests the business’s source
code to be held in escrow?
Conclusion
By asking the right questions and being
aware of the expectations of each party from
the outset, you can influence the relationship
between the customer and the supplier in
a manner that results in a solid partnership
between the parties and arrangements that
mutually benefit both parties.
Simon Martin and Edwin Lim are partners, and Anchali
Anandanayagam is a senior associate, at Hudson Gavin
Martin, a boutique technology and IP law firm. For more
information about Hudson Gavin Martin please visit
www.hgmlegal.com.
Understanding the
end game for the
other party will help
you to strike a deal
that is reasonable and
fair to both parties.
it procurement

networking
O
ver the past few weeks I’ve spoken
with various in-house lawyers about
the most prominent issues they face.
A recurring theme among those I
spoke with was that, because they are working
so hard, they can sometimes be prone to feeling
isolated from what’s happening in the legal
profession.
Many don’t have time to‘lunch’with
their external legal providers and due to
budgetary constraints find that they cannot
go to conferences, or other paid-for events, to
network with their peers.
Unlike lawyers in private practice,
in-house lawyers do not externally market
their services, however, networking holds
much merit for raising their personal profile
within the wider legal profession, and also
opens up opportunities to develop strategic
relationships that are of benefit to their
company or organisation.
The introduction of compulsory CPD from
April next year will open up opportunities for
in-house lawyers to connect with others on a
more regular basis. Another opportunity for
in-house lawyers to connect with the legal
profession is by doing pro bono work. Even
if it’s just a few hours a month, working on
unfamiliar areas of law, at a Community Law
Centre for example, will provide a challenging
environment while creating the opportunity
to work alongside other lawyers outside of
existing networks.
But it’s not just about expanding your
external networks. When it comes to
networking, be it internally or externally,
Helen Mackay Executive Director of CLANZ
suggests tailoring your approach:“It helps
to take a focused approach to networking
within your industry so you are seen as a
passionate industry player and not just‘one of
the lawyers’.”
In a recent article written for our student
publication NZLawyer2B Darise Bennington
discussed the importance of building
“authentic and genuine”relationships. And
while this was an article directed at those
about to embark on their legal career, the
principles of“making connections”hold true
for anyone who wants to network.
In my many years of attending various
legal events I’ve discovered that genuine
networking has led to strong, lasting, and
meaningful business relationships. For me
it’s easy, I’m energised by other people, I
love hearing about their jobs, lives, and what
inspires them. It’s about taking a genuine
interest, not thinking‘what’s in it for me’. I’ve
had many people politely saunter across the
room to say‘hello’and then, after a minute
or so, cut off the conversation and move
on to their next prey after concluding that
I wasn’t important enough for them. I used
to be offended but now I think that those
people, particularly in the early stages of their
career, soon learn that if they’re not authentic
then they’ll make the wrong kind of lasting
impression. And it’s a small town.
For me successful networking is about
good listening, identifying opportunities
to partner with others – being a facilitator
for connecting others, even when it doesn’t
directly benefit you.
Mackay adds that among the attributes
needed for good networking, having the
ability to make connections between ideas
and other people is important. Also, having“a
curious approach to life…a good memory for
names and faces or the ability to hide a poor
memory with some memory tricks”.
But for some, networking doesn’t
come naturally - if you’re not completely
comfortable with entering a room full of
people and exchanging pleasantries with
entire strangers, then taking a focused
approach will work wonders for building
confidence. Mackay suggests establishing a
CLANZ satellite group in your area and / or
the CLANZ community LinkedIn group.
As Mackay suggests, being focused when
networking will quickly identify you as a key
industry player, after all, our time is limited
so a‘hit-and-hope’approach to networking
will not lead to any significant short-term
achievements.
Networking isn’t just about going out
to events. You can also network internally,
and not just at drinks when it’s someone’s
birthday or leaving party. If your company has
an intranet, take the time to learn about what
others in your company are doing. If there are
any projects happening that you’re interested
in then offer to lend a hand. Even stepping
away from your desk and eating lunch in a
communal area will give you an opportunity
to form relationships with other departments.
CLANZ offers many ways to assist
in-house lawyers in connecting with the
legal profession and internally within your
workplace. For more information visit
www.clanzonline.org.
Making meaningful connections
Angela Jacobsen explores how making connections can lessen feelings of professional isolation

CPD
L
ast month, the New Zealand Law Society issued guidelines and
approved proposed rules for the launch of its much-awaited
continuing professional development (CPD) initiative. From
1 April 2014, following a six-month transitional period, every
New Zealand lawyer will be required to annually complete at least 10
hours of CPD activities (and, in addition, is“encouraged to complete a
minimum of 50 hours of self-study each CPD year”, see Guidelines:Lawyers
andConveyancersAct(Lawyers:OngoingLegalEducation–Continuing
ProfessionalDevelopment)Rules, 26 April 2013).
But what does that mean for in-house lawyers? What counts as
a CPD activity? What type of self-study should in-house counsel
concentrate on? And how can they ensure that any ongoing education
they choose best benefits them, their company, and their career?
Most New Zealand in-house lawyers would already undertake
sufficient CPD to meet the requirements under the proposed Rules,
notes Helen Mackay, Executive Director of CLANZ. However, in recent
times“many may have had difficulties in maintaining appropriate
training budgets or in finding the time to devote to personal
development”. The mandatory nature of the new Rules will impress
upon in-house counsel and their employers the need to provide and
protect training budgets, and allocate time for CPD.
Once you secure the time, and budget, how can and should you
use it?
Your needs, your choice
Under the proposed new Rules approved by the Law Society on 26
April, which are currently before Minister of Justice Judith Collins for
her approval under the Lawyers and Conveyancers Act 2006, all lawyers
will be required to develop and implement their own annual CPD plan
and record (CPDPR) and complete the minimum hours of activities
each year.
The new Rules create“a modern and innovative scheme”driven
by current educational thinking, and are“a big step forward from the
more traditional approach to continuing professional development,”
said new Law Society President Chris Moore.“Individual lawyers
will be responsible for identifying and fulfilling their own learning
requirements through a structured process of self-assessment and
reflection.”
School’s out? Not a chance…
Helen Mackay talks with Craig Sisterson about what’s ahead for in-house counsel as the local legal profession
moves towards mandatory continuing professional development

CPD
Rules 4 and 5 outline the requirements:
“4. Continuing professional development requirements
4.1 A lawyer must comply with the following CPD
requirements:
(a) to develop and maintain a written CPDPR in accordance
with rule 5; and
(b) to undertake the required hours of CPD actvities
specified in rule 6.
5. Continuing professional development plan and record
5.1 The CPDPR of a lawyer who provides regulated services for
all or part of a yearly period must include:
(a) a description of the lawyer’s current learning needs;
(b) a description of the lawyer’s proposed actions to be
undertaken to meet the learning needs;
(c) a description and details of the activities undertaken by
the lawyer to meet the learning needs including;
(i) a record of the hours involved and undertaken in
respect of each activity;
(ii) a reflection on each activity; and
(iii) documentation verifying attendance at each
activity.
(d) in accordance with rule 6, or as modified by the Law
Society under rule 7.4, a statement of the number of
hours required within each yearly period; and
(e) a record of any period of time greater than three months
during which the lawyer did not provide regulated
services.
5.2 The CPDPR of a lawyer who does not provide regulated
services may include the matters referred to in rule 5.1 (a) to
(c).
5.3 A CPDPR must be retained for 3 years.”
The benefit of the unique approach the Law Society has adopted,
says Mackay, is that it enables lawyers“to reflect on their own
competencies and areas of weakness and undertake training to
improve in those areas rather than it being a tick-box compliance
exercise”. This is particularly of benefit to in-house lawyers, who can
have an extremely broad range of practice areas ill-designed for any
type of‘one size fits all’CPD model.
The Guidelines issued by the Law Society on 26 April state (at 3)
that when deciding on his or her learning needs when creating a
specific CPDPR, a lawyer should consider:
❯❯ reflections on any CPD activities undertaken;
❯❯ his or her strengths and weaknesses;
❯❯ new law and procedures;
❯❯ his or her career goals; and
❯❯ pending changes in his or her role, responsibilities, and practice
areas.
The Guidelines also note the Rules“are flexible enough to allow
all lawyers to complete the requirements regardless of their areas
of practice, location and experience and to enable them to take
account of their preferred learning styles”(at 3).
Mackay tells NZLawyer In-House that CLANZ welcomes the
introduction of mandatory CPD“that is tailored to practice, and has
appropriate flexibility and ease of compliance”, and that given that
flexibility and choice within the looming new regime, New Zealand
in-house lawyers need to“think very broadly about what they need
to do to make them better at their jobs”.
CPD benefits
While the completion of specific levels of CPD will now be a requirement
for New Zealand lawyers to maintain a practising certificate, there are
many more benefits to continuing with such‘lifelong learning’as an
in-house counsel, including:
❯❯ Keeping up to date with legal and industry changes so that you are
continually aware of the current‘playing field’and best able to help
your business;
❯❯ Adding new skills and knowledge so that you retool and grow as a
professional, becoming more and more valuable to your business;
❯❯ The marketing value provided by attending legal, or industry,
educational seminars and other events, affording the opportunity to
interact with others in the legal profession or within your business’s
industry, and develop a range of professional contacts;
❯❯ The excitement and engagement created by learning new things,
meeting new people, and feeling as if you are continually growing in
your role and your career.
As in-house counsel progress in their role within their business,
and their career, they are unlikely to serve the exact same function. It is
imperative that they embrace the fact that law is a learning profession, a
career of lifelong learning.
There is already a“widespread culture of continuous learning”
among the New Zealand legal profession, said Moore when announcing
the approved Rules and releasing the Guidelines.“We know the legal
profession is ready for introduction of a formal CPD initiative. Our
overriding objective is to maintain and develop a high standard of legal
services for the benefit of all New Zealanders.”
Moreso than lawyers in private practice, in-house counsel have the
need, and opportunity, to embrace broader training and development
as part of mandatory CPD.“For many it could be a mixture of industry
training, leadership skills and core black letter law competencies,”says
Mackay.“Many in-house lawyers say they need to improve their financial
literacy so if this is you, look out for the CLANZ-Deloitte workshops on
understanding financial statements for in-house lawyers towards the end
of the year.”
Develop a plan of attack
A key plank of the new CPD regime is the creation of a personalised CPD
plan and record. Planning can be essential when it comes to ongoing
education, says Mackay, who advises in-house lawyers to get working
on their CPD early each year.“Look at all of the current and future CLE
you are being offered, whether through CLANZ, Law Society CLE, law
firms, or other providers and try to plan how you will address your own
training needs throughout the year rather than leaving it to the end of
the declaration period,”she says.“If you are in a provincial area where
in-person attendance could be problematic, look at establishing a study
group of two or more people.”
In an article in Canadian Lawyer looking at in-house counsel and
the mandatory CPD regime in force in Canada, formerWeyerhauser
Canada and Imperial Parking Corp vice president and general Counsel
Alex Shorten said that the biggest mistake in-house counsel can make
when it comes to continuing education requirements is poor planning,
which can lead to scrambling to complete hours near the end of the year,
and sitting through less-relevant training just to tick boxes, rather than
getting the full benefit of proactively choosing and arranging things that
will have good value to them (“Lifelong learning”, June 2011).
Moving forward, CLANZ will be increasing the CPD options it makes
available to members, says Mackay, and will ensure such options
“continue to be high quality and tailored to in-house practice”. CLANZ
has been working with other organisations on future CPD options for
in-house counsel, which will be announced in due course.
For more information on the proposed Rules, go to www.lawsociety.org.nz.

health safety
By Hanne Janes,
partner,
DLA Phillips Fox
J
ust when you thought the vast
legislative change generated by financial
markets reforms were complete, and
there may be some respite from further
reform, another raft of significant legislative
change comes marching over New Zealand’s
horizon.
This time, following the Independent
Taskforce on Health and Safety Report on
30 April, the reform focuses on health and
safety in the workplace. This reform demands
immediate attention by in-house counsel.
In the wake of the Pike River tragedy, and
other serious health and safety incidents, the
Taskforce’s recommendations are wide-
ranging. The significance of the proposed
changes is considerable for management,
directors, and employees.
For corporate lawyers, they will have to
respond and act rapidly, as steps may be
required as early as July 2013.
Earlier, the Taskforce recommended that
the government set up a new stand-alone
workplace health and safety Crown agency.
This has been adopted by the government
and the agency was announced in February.
This new agency will replace the existing
Health and Safety group which operates as
part of the Ministry of Business, Innovation
and Employment (MBIE). It will be responsible
for enforcing workplace health and safety
regulations, will have its own governance
board, and will operate at arm’s-length from
Ministers. A dedicated unit is being set up
HeadsUp: Sweepingchangesinhealthand
safety:Anewchallengeforcorporatelawyers

health safety
DLA Phillips Fox is delighted to welcome
Hanne Janes to the partnership as head
of the Healthcare practice.
WELCOMING
HANNE JANES
DLA Phillips Fox is a member of DLA Piper Group, an alliance of independent legal practices.
Hanne brings significant expertise and experience in all
areas of medical and health-related law to the firm.
Together with our existing Healthcare team members,
she will spearhead the growth of this national practice.
Read more about Hanne on our website
www.dlapf.com/our-people/hanne-janes
within the MBIE to help establish this new
unit. Legislation to establish the agency
is likely to be introduced in June, and it is
intended to be up and running by December
2013. Corporations will have the opportunity
to make submissions on this proposed
legislation.
The government wants to reduce the
rate of workplace incidents and injuries by
25 per cent by 2020. A further Taskforce
recommendation is that MBIE, along with
ACC and the new health and safety agency,
work together to oversee the delivery of
workplace injury-prevention activities. The
Taskforce considered there was greater
potential for ACC levies to be used to
incentivise good performance, by introducing
a greater differential between good and poor
performers.
A key change in emphasis, recommended
by the Taskforce, is that both management
and directors need to shift from identifying
‘hazards’to‘risk management’, which is the
norm internationally. Identifying hazards that
are low risk means that the current system
is inefficient and ineffective at reducing
workplace injury. This is also in line with the
Pike River Commission of Inquiry, which noted
that although hazards were documented,
much larger risks were not.
Most importantly, the Taskforce proposes
that the existing Health and Safety in
Employment Act 1992 be replaced, with
a recommendation that the new Act be
based upon the Australian Model Law,
and its associated regulations. This has
serious implications for both directors and
management.
The Australian Model Law imposes a duty
on company officers and directors (including
company secretaries) - and arguably all senior
management with the ability to influence the
health and safety decisions of the organisation
- to exercise‘due diligence’to ensure the
company meets its safety objectives.
This means that those officers must:
❯❯ Actively acquire safety knowledge and
keep up to date with workplace health and
safety matters.
❯❯ Understand the nature of the company’s
operations, and the hazards and health
and safety risks associated with those
operations.
❯❯ Provide adequate and available resources
to identify, eliminate, minimise, or control
risks.
❯❯ Ensure resources are available to receive
and consider business incidents, hazards,
and risks, and respond in a timely way to
that information.
❯❯ Ensure that the company has in place (and
implements and monitors) processes to
ensure legal compliance.
❯❯ Audit and review health and safety
processes and use of resources.
Clearly, if implemented, these Australian
requirements will impose a far higher
obligation and onus upon directors and top
management than those currently in place.
Directors will have to ensure there is an
effective linkage between their health and
safety goals, and the actions and priorities of
management. They are likely to be required
to independently review serious incidents
and be personally satisfied with the adequacy
of both the management investigation
methodology and remedial responses; be
able to demonstrate that they asked the
right questions and were convinced that
management assessed the risks of the
business adequately; and appropriately
moderated and managed them.
The audit requirement means that
directors are likely to need to independently
audit to ensure that systems are adequate.
DLA Phillips Fox Continued on page 16 ➔

Summary of changes to health and safety legislation:
❯❯ Establishment of a new stand-alone workplace health and safety Crown agency.
Legislation to set-up this new agency is expected to be implemented by December
2013. It will be responsible for enforcing workplace health and safety regulations and
will have its own governance board and operate at arm’s-length from Ministers.
❯❯ Management and directors will need to change from identifying‘hazards’to‘risk
management’.
❯❯ Existing Health and Safety in Employment Act 1992 may be replaced by an Act based
on Australian Model Law and associated regulations, which will have sweeping, and
serious implications, for directors, executives, and senior management.
❯❯ The Australian Model Law imposes a positive duty on company officers and directors
to exercise‘due diligence’to ensure the company meets its safety obligations. These
will have a far higher obligation and onus on directors and top management than
those currently in place.
❯❯ Under the Australian Model Law, liability can arise even where there has been no
fatality or serious harm event. The penalties are serious for both individuals and
corporations.
❯❯ The existing manslaughter offence in the Crimes Act 1961 may be extended to
corporations, and the corporate liability framework may be revised so it applies to all
offences (including manslaughter).
❯❯ If the Taskforce recommendations are accepted, companies found guilty of health
and safety offences could also find themselves subject to adverse publicity orders.
This could require them to advertise their failures by publishing advertisements in
newspapers or sending letters to shareholders
considers that boards may need formal health
and safety sub-committees to address these
issues. There will also be a requirement to
ensure internal and external reviews are
undertaken to ensure the organisation meets
‘best practice’industry standards and that
health and safety policies, and procedures, are
‘fit for purpose’.
In summary, and rather chillingly, the
Australian Model Law imposes a positive
duty upon senior management and directors,
whether or not there has been a health or
safety incident. In Australia, an officer can be
prosecuted for failing to comply with the‘due
diligence’obligations. The penalties are severe:
a maximum fine of $600,000 and/or up to five
years’imprisonment for an individual, and up
to $3 million for the company.
The Taskforce also recommended that
the existing manslaughter offence in the
Crimes Act 1961 be extended to corporations.
Likewise, it recommended that the corporate
liability framework be revised so it applies to
all offences (including manslaughter). This
means that criminal liability may be applied
to a corporation for acts or omissions of
employees and officers.
The Government has said it will consider
the Taskforce’s report and recommendations,
and provide its response by the end of July
2013.
In-house counsel should note these
proposals and be actively considering their
likely implications. Some of the changes may
require corporate lawyers to reach outside
their organisation for special legal expertise.
The Royal Commission Report into Pike River
recommended that the new health and safety
agency issue an improved Code of Practice to
guide directors. While that would be useful,
given the enormous tasks already faced by the
proposed new agency, DLA Phillips Fox does
not believe directors and managers can wait
to see if this eventuates. They are going to
have to be proactive.
The changes, like those to the adventure
tourism industry and the financial services
industry, signal a philosophical and practical
change. New Zealand is moving from‘light-
handed regulation’, introduced in the 1980s,
to much stricter regulatory and compliance
requirements.
Gone are the days when purely commercial
matters, such as profitability, can be regarded
by management or the board as more
important than employee health and safety
in determining priorities of a business’focus.
Managing health and safety risk is going to be
just as important as managing financial and
reputational risk. In fact, managing health and
safety risk will help an organisation reduce
financial and reputational risks.
health safety

global trends
Keeping an eye on the trends
T
he last time NZLawyerIn-House looked
at global trends was back in May 2011.
Key trends, at that time, were having
to do“more with less”- with increased
workloads and limited resources affecting the way
some in-house teams were advising their internal
clients. Other areas were“re-engineering the legal
department”, and“being held to a higher standard”.
Less for more
Fast forward two years, and what are we seeing?
According to the The In-House Lawyer and Legal
Business survey: The In-House Survey 2012 (IHL/
LB Survey), published in October, it appears the
story in the UK remains very much the same
where a key theme of needing to“extract more
value from fewer resources”resonated among
most survey participants.
Despite the IHL/LB Survey suggesting that
generally“the size and shape of in-house
legal teams has remained largely unchanged,”
according to Ron Pol of Team Factors, a dip
in the total number of New Zealand in-house
lawyers, the first in many years, may be
explained by a failure for executive management
teams to see the value of a legal team.“These
views have some currency amongst executive
management teams, and match the downsizing
and degrading of some legal functions that [has]
occurred over the past few years,”says Pol.
But while the nine per cent dip in in-house
lawyers within companies suggests that legal
budgets continue to be cut, a three per cent
increase in government in-house lawyers could
elude to“those who have more effectively
started to develop new ways to focus on
improved‘outcomes’and help reconnect legal
work with strategic organisational goals.”
Something that Pol says is“heartening”to see.
Money, money, money
It has been widely reported that many in-
house lawyers find themselves working
within complex
Angela Jacobsen reviews the
global landscape for in-house
legal teams
Continued on page 18 ➔

Global trends
management structures of companies, and
it’s not uncommon for in-house lawyers to
eventually find themselves on the board of
their company, this is especially the case
with lawyers working in highly regulated
industries that have ended up in CEO
positions.
But even if in-house teams are
not engaged in the overall strategic
management of the company, there is still an
expectation that in-house lawyers meet new
challenges, in the face of continuing global
uncertainty, to“embrace different ways of
doing things and further improve business
efficiency,”says David Lombe, Partner and
Deloitte Legal Sector Group Leader in the
Deloitte Corporate Counsel Survey 2012
(Australia) (Deliotte Survey).
A strategic trend found in the Deloitte
Survey was the increase of“outsourcing”or
“offshoring”work to external legal providers
and given the increase in international
firms seeking growth opportunities in the
Asia-Pacific region, fees are likely to be more
competitive than ever.
Ninety-eight per cent of Deloitte Survey
respondents reported having outsourced
“at least some”legal tasks externally, even
though 50 per cent said their budgets had
not changed in the past year. Key areas
where work was outsourced were litigation,
MA, industrial relations, and contract
management.
There was a similar number of unchanged
budgets for UK respondents in the IHL/LB
Survey, with a large proportion of budgets
spent on regulatory matters given the
“swathe of structural and regulatory reform”
in a changing economic environment. The
average proportion of budget spent on
external law firms was 49 per cent, however,
in-house teams reported that they are
spending with caution, and that the“cutting-
back of legal spend is yet to peak”.
When NZLawyer In-House spoke with
several in-house lawyers back in December,
there was an ever-increasing eye upon
external legal spend. In-house teams were
having to think more strategically about
their external spend in order to justify it
to their business and this hasn’t changed.
Only certain work is drafted out externally,
especially when it’s highly specialised and
will obtain a faster and better result than
doing it in-house.
Procurement of external legal
services in New Zealand has highlighted
differences between how the corporate
and government sectors select law firms
to work with. Pol says that panel structures
remain reasonably common, with corporate
having a greater need for flexibility in
selecting the“right”external lawyer for
each transaction. While a“centralising
theme”within the government sector“went

global trends
the other direction”, locking down a large
panel of external law firms.“Even within
government, however, some agencies have
quietly resisted the centralised approach;
some have calculated that they can
demonstrate higher savings, greater choice
and, sometimes, more innovative‘outcome-
focused’solutions in line with international
trends that local firms have increasingly
been offering.”
Innovation
More than ever, in-house teams are
expected to deal with highly complex
matters of risk, compliance, and regulatory
issues. And it’s this global trend that requires
an ever-increasing need for innovation to be
demonstrated by in-house teams.
In cost-saving tactics, new technologies
have led to an increase in work being
outsourced or offshored by in-house teams.
For example a trend towards outsourcing
to more cost-effective LPOs and litigation
support providers, the Deloitte Survey
reported.“The pace of change and the
speed of technological innovation will have
profound effects for the economy. Much of
the change is being driven by individuals –
employees and customers. To engage with
their customers and structure their internal
operations and people management... and
this includes their in-house legal teams,
will be those [individuals] that are able
to embrace the potential of the digital
economy,”said Ric Simes, Deloitte Access
Economics.
Technology aside, the FT Innovative
Lawyers Report 2012 outlines several
other key areas where in-house lawyers
can innovate; talent engagement and
development, how internal functions
and external providers are managed, risk
management, and being strategic advisors
to the business.
But, in general, the New Zealand
legal profession falls short on innovation
according to Pol, and this can be a catalyst
for companies not seeing the value in their
in-house legal function.“lawyers don’t
effectively demonstrate value in ways more
meaningful to emerging client needs and
changing environments, or if New Zealand’s
regulatory environment inadvertently
constrains lawyers from delivering the most
valuable services to corporate, government,
and personal clients alike, the business
of law will continue to be increasingly
constrictive for many lawyers, irrespective
of international advances.”However, Pol
added that he was optimistic that there were
law firms and legal departments“quietly
building and implementing genuinely
innovative solutions to modern market
conditions”, and that this would ultimately
lead the way to a bright future for New
Zealand’s legal profession and, clients.

influencing
By Emily Morrow

W
hat do the following have in
common? Jeremy, general
counsel for a large publicly
traded company, needs to
deliver difficult information to the board
and obtain their support for a potentially
controversial action. Karen, an in-house
lawyer who reports to the CEO, is trying to
get more CEO‘face time’. Bill, an in-house
lawyer wants to better motivate his direct
reports who do important, but routine,
repetitive work. Anne needs the support of
her professional colleagues in connection
with some challenging personnel decisions
within the general counsel’s office.
The situations in which Jeremy, Karen, Bill,
and Anne find themselves involve the use
of influence, and their success will depend
on their ability to deftly practice the art
of influencing. I define influencing as‘the
ability to lead others outside your control
so they make better decisions affecting you
and your work’. Influencing, therefore, is a
critical leadership competency. The inability
to influence those to whom you report,
your peers and/or your subordinates can
derail your career more quickly than your
lack of a particular technical skill. Therefore,
underestimate the importance of the art of
influencing at your own peril!
Influencing versus Advocacy
or Authority
Here’s an interesting point in regard to
lawyers, who are trained to be advocates
and/or negotiators. We know how to
frame arguments, make a case, present
it in court, or elsewhere, and be assertive
(if not aggressive) when appropriate. You
might expect, therefore, that lawyers would
naturally be highly skilled influencers. In
my experience, this is often not the case.
In fact, counter-intuitively, your skills as an
advocate may get in the way of your ability
to influence. Advocacy involves direct and
often transparent presentation of arguments,
frequently in an adversarial context. Influence
has to do with leadership, suggestion, active
listening, and careful management. It relies
heavily on‘people skills’, an understanding
of human nature and emotional intelligence,
capabilities lawyers often do not cultivate
in themselves. In fact, as lawyers we often
underestimate the importance of these‘soft’
skills.
Further, there are significant differences
between exercising authority and the art of
influencing. The former can appear in the
short term to be an effective tool, but is often
a very blunt and transient instrument. The
latter is subtle, elegant, and can ultimately be
more effective and enduring. When stressed,
managers often instinctively use authority
to obtain results, even though the use of
influence might be more appropriate. Think
about this as you work with peers and direct
reports and when you observe how others to
whom you report manage you.
In-House counsel and the
art of influencing

influencing
Types of Influence
Consider first the exercise of internal influence
in your workplace. What‘unspoken’networks
exist behind the scenes, as opposed to the
defined lines of power and authority? Whose
advice is sought and followed? Whose opinion
causes others to change theirs? Who confides
in whom? At whom do people look when
they make a recommendation? Identifying
these networks, getting feedback from others
about how you are seen, and developing
relationships with the key players will be
critical to your success. Indeed,‘personal
selling’- selling your views, ideas, and self to
others, expanding your network of‘allies’and
successfully negotiating with others both
within and outside of your immediate work
environment - is essential.
Although having a high level of internal
influence at your workplace is important,
in today’s turbulent business and legal
environment, you would also be well advised
to develop external influence and allies.
Doing so will enhance your reputation and
that of your office, will strengthen your future
position, and will provide you with greater
insight and objectivity. Try to develop an
entrepreneurial attitude. Set realistic and
achievable goals, monitor those regularly, and
expand your network of external allies. For
example, schedule one networking luncheon
weekly, plan to make four presentations
to external groups annually, liaise monthly
with each member of the board of directors
etcetera. The cumulative effect of these small,
but regular, actions will be much greater than
that of the occasional‘big thump’event.
Influencing can be done both formally and
informally. Formal influencing is generally
done through oral presentations or in writing,
both of which require well-developed
self-presentation and communication skills.
The key with formal influencing is to tailor
your presentations to the interests and needs
of your audience. Use a bit of imagination
and put yourself into the shoes of your
listeners or readers. What are their concerns,
interests and goals? What background do
they have on your topic? How much detail is
it appropriate to provide so they understand
critical concepts while not being inundated
with data? How formal, or informal, should
the tone of the presentation be? To what
extent is it important to establish rapport
with the audience versus just transmitting
information? How can you best establish such
rapport?
Informal influencing depends upon
excellent relationship-building skills and
the ability to network by connecting people
with other people and with new ideas or
opportunities. It’s helpful, but not essential, for
people to like you in the context of informal
influencing. That said, informal influencing is
most effective when others respect and trust
you. Without that, the scope of your influence
is likely to be limited and short-lived. As with
other‘intangible’skills, some people are
naturally gifted with excellent relationship-
building skills or networking capabilities and
are therefore better informal influencers.
However, with some focus, attention, and
practice, such skills can be perfected by
anyone.
Influencing Up, Across and Down
Different skills and approaches are
appropriate depending on whether you are
influencing someone to whom you report
(influencing up), a peer (influencing across),
or someone who reports to you (influencing
down).
For in-house counsel, influencing up
typically occurs when you report to the
general counsel or other senior manager, or
if you are the general counsel reporting to
the CEO or board. Frequently the person(s)
whom you want to influence may not be
lawyers, so you will need to tailor your
approach accordingly. Pay close attention
to your use of technical language, define
terms, ask open-ended questions that will
let you determine the extent to which your
‘audience’understands your position, and so
forth. Actively listen to how those whom you
seek to influence discuss issues (what type of
language and approach they use), as this will
give you clues about how to structure your
formal presentations. Make it clear how your
suggestions will add value organisationally;
what will the return on investment be, and
how do your suggestions further the work of
the CEO / board etcetera? You are there to
help, even when you have to raise concerns.
Be scrupulously and consistently respectful,
but do so firmly and self-confidently. Gravitas
is critical when you seek to influence up.
When influencing across with your
professional peers, you will need to gain their
goodwill so they respect and trust you, and
hopefully like you as well. Be flexible and
good-natured where appropriate,“give until
it hurts”, support the success of others, be
an excellent team member, and let others
know your intentions are positive and
benign. I call this‘making deposits into the
bank of goodwill and social capital’. If you’ve
got a healthy deposit on account at this
particular bank, when you need to step into
the‘withdrawal queue’and ask for help from
others in achieving your objectives, you will
find that influencing across occurs naturally
and easily.
The more senior you become in the
workplace, the more critical influencing down
will become to your long-term success. You
may be put in charge of a team of lawyers
and other professionals, all of whom will need
to collaborate with you to achieve essential
outcomes. Again, goodwill is critical here.
Get to know each and every team member,
take note of their unique contributions and
let them know how highly you value them.
This is all part of cultivating and retaining
high-potential employees, and as someone
who manages other people, you must always
be investing in the success of others. It never
stops; you will never arrive in this regard,
so embrace the journey. Building loyalty
and trust is a key component of influencing
down; your team must fully believe that you
always‘have their backs’. If the work of those
you manage is sometimes repetitive and
even boring, you would be well-advised to
articulate why and how such work is critical to
the team’s overall mission and success; what
is it that makes even the most pedestrian
work meaningful and compelling? A little
bit of‘creative inspiring’can go a long way in
influencing down.
Interestingly, I have noticed that those who
work in the not-for-profit sector, such as non-
governmental organisations, are often highly
skilled in the art of influencing. Because they
frequently work with volunteers and donors,
over whom they have no authority, they
must deftly use influence to obtain results,
while avoiding being viewed as manipulative.
Perhaps those who work in the business
sector can learn something from the not-for-
profit sector in this regard. You might want to
consider this the next time your workplace
is designing a leadership development
programme, or the like, for high potentials.
What can lawyers learn about influencing
while working as volunteers?
Ultimately, influencing, like many other
capabilities, truly is an art and not a science.
You must rely on your intuition about people
and situations to get it right. You must be
genuine and honestly motivated by a desire
to support the success of others and attain
meaningful organisational outcomes. If you
do so, I expect your scope of influence will be
extensive and robust.
One final thought. If you have any
comments, questions, or thoughts about
this article or other articles I’ve written for
NZLawyer, I’d be delighted to hear from you.
Please do be in touch if you’re so inclined. You
can contact me at www.emilymorrow.com
Emily Morrow, BA (Hons), JD (Hons, Juris Doctor), was a
lawyer and senior partner with a large firm in Vermont,
where she built a premier trusts, estates, and tax practice.
Having lived and worked in Sydney and Vermont,
Emily now resides in Auckland and provides tailored
consulting services for lawyers, in-house counsel, and
law firms focusing on non-technical skills that correlate
with professional success; business development,
communication, delegation, self-presentation, leadership,
team building/management, and the like.

exhibiting value
I
n-house counsel often have to justify
their value to companies who may
fail to recognise their importance. The
role of internal legal counsel has been
subject to criticism especially in today’s
harsh economic climate and there has even
been debate regarding the necessity of
in-house legal departments. The financial
crisis has put pressure on in-house lawyers
to be more cost-effective and to offer
more value for money, as many companies
are feeling the squeeze. Surveys such as
Nabarro’s 2011 Report General Counsel:
Vague about value? (Nabarro Report) and the
ValueDynamics study and leadership toolkit
by AddleShaw Goddard published in April
2013 (ValueDynamics Study), look at several
different factors relating to both the financial
benefits of in-house counsel as well as the
non-monetary value to the business as a
whole.
Globally, executive management
structures of companies question the high
cost of legal departments outsourcing work
to external counsel, as they expect all legal
issues to be dealt with internally. While many
in-house counsel handle low-level matters
themselves, they may lack the resources
and expertise to deal with more complex
or specialised legal issues. Outsourcing and
internal costs are at the heart of the debate
on cost-effectiveness; however it is important
not to ignore the other factors which make
in-house lawyers integral to a business such
as technical skills, innovation, and simply
measuring performance.
An interface
In-house counsel have the advantage of
being both in the legal profession and part
of a company. They not only have an insight
into the company and are familiar with
its aims and interests, but are also legally
trained and understand the workings of
external law firms providing an interface
between the two worlds. In-house counsel
are important in avoiding expensive
litigation by offering a regulatory function
and mitigating risk.
Hidden Value
There are opposing views on the significance
of the contribution that in-house counsel
make to the commercial value of a
company. A number of respondents to the
What is the Non-MonetaryValue
of In-house Counsel?
Natasha Mellersh finds that showing‘value’is key for in-house legal teams

exhibiting value
ValueDynamics Study noted that while there
is a substantial input by in-house counsel to
the commercial value of a business, many
respondents felt this is often overlooked.
In an article in LegalWeek explaining the
findings of the study titled The importance
of understanding differing priorities on 07
May, Tim Hamilton, a corporate partner at
Addleshaw Goddard said:“One of the most
surprising findings from our study was how
undervalued some GCs feel within their
organisations.”
However, Hamilton also added that
this was sometimes due to a lack of
communication on the part of in-house
counsel.“[A]nother key insight was that GCs
do not always report the full picture about
the value that they add to the business.“
The physical and psychological proximity
of an in-house legal team to the business
is undeniably beneficial. By identifying
risk, in-house counsel sidestep costly legal
wrangling, although‘avoided problems’are
naturally not flagged by the company as
money saved. In-house counsel strive to keep
the goals of the company in mind, serving
the interests of the business, identifying
risk before it threatens, and knowing when
to bring in external counsel. Numerous
respondents to the Nabarro Report said
that they strive to constantly improve their
understanding of the business.
“Our first priority is obviously to
understand the commercial objectives of
the business. This applies to the in-house
team and also to our external lawyers. I
look for an active interest in learning about
our business. The best way is just to ask
questions – most people love talking about
their job,”said one respondant.
Nevertheless the traditional roles of
in-house counsel are changing but the rigid
image of lawyers is still widely prevalent, as
Intelsat assistant in-house counsel Robert
Cummins notes in the LegalWeek article
Business brains – how in-house lawyers can
become more influential in the boardroom (19
Apr 2013) that“[l]awyers normally aren’t seen
as people who can show the way forward
for a business – we are seen as reactive and
retentive, rather than proactive or creative.”
Promoting the value of the
legal team
Communicating and building key
relationships on the business side is key to
promoting the value of the legal team to
senior management. Almost all respondents
to the Nabarro Report emphasised
the importance of understanding the
commercial objectives of the business.
According to the report, commerciality
was seen to be the single most important
factor in recognising the value of the legal
team. In an article in LegalWeek titled The
ValueDynamics leadership toolkit on 22
April, Tim Hamilton, a corporate partner at
Addleshaw Goddard said that“GCs need to
be aware of how the advice that they deliver
adds to the success of an organisation -
and not to be afraid to communicate this
contribution to the executive board.”
Communication
Communication is seen as a key non-legal
skill by in-house counsel. In addition to
explaining complex legal issues in relation
to business decisions within the company,
in-house counsel play a crucial role
in effectively, and concisely, communicating
the goals of the business client to external
counsel. Conversely it is important to note
that the ability of in-house counsel to
disregard any‘legalese’and to speak the
language of the company. In the LegalWeek
Business brains article Kellogg Europe chief
counsel Orla Muldoon commented:“As a
lawyer, we have a unique know-how that
others on the board may not necessarily
have. But the way to channel it is to talk
financials – the language CEOs understand.”
Changing roles
In recent years the function of in-house
counsel has shifted from being strictly legal
to a more business-focused role. Many
in-house lawyers are interested in expanding
their role into the field of business strategy
and decision-making. The Nabarro Report
indicated that only three per cent of
in-house lawyers are involved in strategic
decision-making in the top tier of a company,
however it concluded that in the current
climate there is a greater possibility for
in-house counsel to assume a more central
role within a business. A small percentage
of those asked, felt it was not up to them to
focus on the commercial side of the business
at all, as this goes beyond their legal
function. “I do not think it is our job to have
a commercial impact. We are here to be legal
advisers not business people tasked with
making money. Our role is to advise and to
mitigate risk,”a respondent noted.
Measuring Performance
In-house counsel are, at times, and rather
unfairly, perceived as being superfluous.
There is a wide consensus among in-house
counsel, that there is a need for legal teams
to measure their value and efficiency.
This is not only to keep track of their own
performance, but also to convey the value
of their work to the company. There are
suggestions on how this can be done,
from measuring performance internally
and compiling annual reports to using Key
Performance Indicators (KPIs).
KPIs
The Nabarro Report found that only 21
per cent of in-house counsel measure the
performance of their legal teams with KPIs,
however it is still a significant measure as its
use is on the rise. As well as making it easier
to justify the existence of a legal department,
the report suggests that measuring
performance can help the legal team align
itself more closely with business strategies.
Although KPIs are still relatively new to
in-house legal departments, according to
the report 14 per cent of in-house counsel
were planning to use them to measure
their performance in the future. This
indicates that there is a growing interest
to use such methods in demonstrating
value to executive management teams of
a company. Further development of these
indicators could prove largely beneficial to
communicate the overall value – monetary
or non-monetary – of in-house lawyers in
relation to the business.
The future of in-house counsel
Many businesses do not fully understand
what the legal department actually does, and
are often unaware of what business-minded
lawyers are capable of. The recent surveys of
in-house counsel reveal that although the
monetary value remains a key concern for
CEOs there is increasing awareness of the
broader significance of in-house counsel.
The unique and pivotal role of in-house
counsel within companies and in regard
to external law firms, can make them
multifaceted, and essential, even outside
of their legal function. Even though only
a small percentage of in-house lawyers
are at the highest levels of the business
decision-making process, this could shift in
the next few years. There is a growing trend
of in-house counsel wishing to gain greater
influence in the decision-making process.
The reports also suggest that it is important
for counsel to show what they contribute,
as there can be a disparity in the perception
of their work and the reality. As the role of
the in-house counsel continues to evolve in
changing economic climates and fluctuating
work loads, one thing is clear the nature
of their position allows them to ever adapt
to the unexpected and this is an asset
in itself.

Fair Trading: Misleading or
Deceptive Conduct, 2nd edition
Lindsay Trotman and Debbie Wilson
9781927149423 | Forthcoming due July, 2013
Providing an indispensable comparative and
in-depth resource, Fair Trading: Misleading
or Deceptive Conduct, 2nd edition, examines
26 years of section 9 case law and distils
the consequent principles from the Fair
Trading Act 1986. The authors explore the
key elements of an action under section 9:
namely that there is “conduct” “in trade” that
is “misleading or deceptive”. The authors then
consider examples of potentially misleading or
deceptive conduct: including nondisclosure
of information, opinions and advice, laudatory
statements, predictions and promises.
Hinde on Commercial Leases,
2nd
edition
George W Hinde
9780409327557 | Published April, 2013
$189.75
Hinde on Commercial Leases is an authoritative
work providing the practitioner with up-to-date,
clear and practical guidance on the law relating
to commercial leases. The content for this book
is taken from the popular Hinde, McMorland
and Sim, Land Law in New Zealand (looseleaf)
and it provides in-depth and comprehensive
analysis and commentary on all topics.
Dr George Hinde, Emeritus Professor of Law,
Auckland University is an eminent barrister
with extensive experience both teaching and
working in the area of land law. He is a leading
author and has published widely on the topic,
including as co-author of Hinde McMorland and
Sim Land Law in New Zealand.
McMorland on Easements,
Covenants and Licences,
2nd edition
D W McMorland
9781927183694 | Forthcoming due July, 2013
$189.75
McMorland on Easements, Covenants and
Licences is an authoritative work covering
the law relating to these specific, yet related,
areas of law. This book will provide the busy
practitioner with up-to-date, clear and practical
guidance on the law relating to easements,
covenants and licences and the issues which
can arise from these rights.
Law of Contract in New Zealand,
4th
edition
John Burrows, Jeremy Finn and
Stephen Todd
9781927149546 | Published February, 2012
Also available in eBook
$178.25 CLANZ Conference price: $142.60
The fourth edition of Burrows, Finn and Todd’s
Law of Contract provides definitive coverage
of the law of contract in New Zealand. The
clarity and the comprehensive nature of the
discussion make this book the first point of
reference for the legal practitioner, the law
student, and all who are interested in this core
field of law. This latest edition maintains and
builds upon the exemplary standards set by its
predecessors.
LexisNexis In-House Lawyer Books
for the CLANZ Conference
Promotion code (for Law of Contract in New Zealand, 4th edition) is CLANZ13, offer ends 16 June 2013.
Terms and Conditions
Discount is only applicable for Law of Contract in New Zealand, 4th edition. Not available for resellers and bookstores. Not to be used in-conjunction with any other offer. Offer ends 16 June 2013.
www.lexisnexis.co.nz/store

In-House-Latest-Issue 5-ALL PAGES

Recommended

Recommended

More Related Content

What's hot

What's hot (18)

Viewers also liked

Viewers also liked (11)

Similar to In-House-Latest-Issue 5-ALL PAGES

Similar to In-House-Latest-Issue 5-ALL PAGES (20)

In-House-Latest-Issue 5-ALL PAGES