What Google’s lawyers can teach us about embracing innovation
It might seem odd to have both “lawyer” and “innovation” words together in a sentence.
I know what you’re thinking. It may even have happened to you. A team got together and started brainstorming on a new idea. Everyone got excited. After the details have been ironed out, you get your lawyer involved to get their feedback. What was supposed to be an exciting project ultimately got killed by the lawyer.
We hear these stories all the time. A large listed company won’t approve a new digital marketing campaign because the legal department said their sales team cannot officially represent the company if they post using their personal Twitter or Facebook pages. A large company had to shut down the new community channel on Discord because the lawyer said it was cloud-based. After several months of ongoing discussion, a FinTech company cannot get onboarded on the bank’s platform because the bank does not have any existing processes and procedures that will ‘fit’ the business model of the new FinTech company. Precious time wasted. Energy depleted. The mood shifted and turned everyone into pessimists.
The people in these companies all identified the usual suspect: lawyers. More specifically, they felt that the legal department was to blame — or the killer of new ideas.
While it may be true that the legal profession is characterised by conventions and traditions (especially law firms that still operate on a business model developed centuries ago), legal departments tend to be more close-knit and open to embracing innovation. Technologies from automation to big data and artificial intelligence are shaping the legal departments of the future.
As a business leader, this is where the opportunity begins — in constant collaborations that include your legal teams in the innovation process.
Google’s lawyers practice what they call “horseback law”.
In a book titled ‘How Google Works’ on Google, both Eric Schmidt and Jonathan Rosenberg explained how the “horseback law” concept works:
“Lawyers are, by training, backward looking. This makes sense, since so much of the law is determined by precedent: What happened before dictates what is OK going forward. They are also highly risk-averse. This also makes sense, because so many business lawyers practice in law firms and the job of a corporate law firm is to keep its clients out of trouble. So when you ask most lawyers to access a situation, and if that situation is 99 percent good and 1 percent questionable, they will spend most of their time with you reviewing the questionable.
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The backward-looking, risk averse approach to the law, which is so common in corporate America, doesn’t work in the Internet Century, when business evolves at a pace that is several orders of magnitude faster than the pace of legal change. A smart creative-fueled business that is trying to innovate will be lucky to be right 50 per cent of the time, which can be a problem for a lawyer whose risk tolerance is in the single digits.
This is why, when they were building Google’s legal department, David Drummond and his colleagues Kulpreet Rana and Miriam Rivera set out to create an environment where lawyers approached their jobs differently. Our current general counsel, Kent Walker, likes to call this approach “horseback law.” Take a look at any old Western movie…. There is always the scene where a cowboy rides up on his horse and comes to a stop, surveying the situation and deciding what to do next. Kent advises his lawyers to do something similar: In certain situations, it’s often enough to ride up on a horse (figuratively speaking, usually), make a quick assessment, then mosey on. While many decisions (e.g., major acquisition, a legal compliance question) may call for a detailed analysis, don’t feel that you always have to dismount and spend weeks writing a fifty-page legal brief (ha!) of all the things that could possibly go wrong and what would happen if they did. In the early stages of a new project, the analysis won’t be 100 percent correct anyway. In those situations, it isn’t the lawyer’s job to cover every possible angle in detail; it’s his job to look into an unforeseeable future and provide educated, quick guidance to the business leaders making the decisions. Then saddle back up, pardner.”
Google is willing to take some risks to innovate itself. Is your lawyer’s role best described as a counsel of the company or a partner in the business? At a basic and fundamental level, the lawyer’s raison d’etre is to keep your company out of trouble. If your lawyer is a counsel, the lawyer may focus on risk and be reluctant to depart from any status quo. But if the lawyer is a partner, the lawyer’s focus on an issue may be more flexible and could also be more creative. In other words, the lawyer doesn’t need to come up with a 50 page legal memo with a long list of assumptions. It may be enough to give a short email or a pointer to an executive making a decision on a matter.
In practice, the concept may work better in a company when the lawyers have been regularly exposed or even embedded into the operations of your business (hence why technology focused and innovative companies like Google tend to hire lawyers that may be more generalists than specialists).
It may be easy to put your lawyers inside a “box” and call them up only when you need a contract to be vetted — or when you need black and white answers to questions of law. In areas where innovation is a key driver of business and navigating a shifting regulatory landscape, such as the FinTech and the crypto industry, lawyers can contribute significantly by providing innovative solutions to legal challenges that help with new product design and development.
