2016 - eight reasons why this could be the year of the GC
The first few months in the life of this blog have seen us grapple with a broad range of thorny issues of direct relevance to the life of the GC.
Scanning the horizon into 2016 suggests this year is likely to throw up even more challenges. And opportunities – many of which we have been guiding your thoughts towards since our first posting.
So, here's our take on what you're going to need to look out for over the coming months.
Much has already been written about the possible implications of Celtic and intra-England devolution but that issue is going to grow in importance in 2016 with the increasing likelihood of Super-Manc, a Northern Powerhouse and the Celtic fringe – from its powers seeking southern extremity in Cornwall to its Welsh and Scottish devolved law making bodies – and, never forgetting, the challenges in Northern Ireland. As a GC, things to look out for include:
- Cost of doing business, directly and indirectly. We already have 27 EU countries but we may now also have up to 31 UK & NI differentiated regions to understand, to plan for and then to operate within – only 136 years after we formally unified time nationally, things are already starting to unwind…
- Complexity – not getting caught out on varied issues from cost of premises to local employment cost variations – many of these things are knowable now, or will be soon, so don’t be surprised by the knowable future
- Increasing arrival of local decision-making, including the likelihood of growth in judicial review of local decision-making bodies and related FOI and subject data access requests as novice regulators grapple with new powers
- Increase in opportunities for local lobbying and the need for businesses to do so to help novice legislators to make effective law – perhaps now is a good time for legal to have more of a proactive role in your government-relations function?
Not entirely unrelated is the looming spectre of the UK's in/out referendum on membership of the EU. That's already taking up a significant amount of David Cameron's time as he negotiates for concessions. As the time comes closer for the referendum vote it's hard to believe that Boards and Senior Management Teams will not want careful and considered analysis of what “in” or “out” would actually mean for your business – will you be ready to tell them?
Also of particular interest to GCs – whether the ultimate vote is in or out – is what the implications will be for migrant labour and border controls particularly, as far as the UK's concerned, freight coming in and out of Calais. We've heard stories of some contractual arrangements now stipulating that lorries can't even stop within 200km of the port – a legal crisis waiting to crystallise in northern France if ever there was one.
And then there's the terror threat. What impact will that have on your ability to trade, both in the EU and globally? What are the business risks? What does it mean in terms of access to skilled migrant labour? And what's the scope of the force majeure provisions in your contracts?
Closer to home there's Scotland. And Wales. With elections in both countries in May, how strong a mandate will Nicola Sturgeon need in order to have another crack at breaking away? And what does that mean for your business, your contracts, and your medium-term planning process?
3. No11, Nudge theory and the shadow of EVEL (English Votes for English Laws)
With such a strong English and Wales majority and Cameron’s apparent plans to further neuter the Lords (for dissenting over tax credits) it's looking increasingly likely that most of the Tories' manifesto will get passed into law and, often with limited levels of scrutiny (which may not bode well for the technical quality – completeness, logic, workability – of the law that is made; do you remember the Dangerous Dogs Act?) So we can expect more "Socialising Corporates", increasing the way that the burden of running the state is being pushed onto other bodies including, quite possibly, your own company, eg:
- apprentice levy
- national living wage
- workplace pensions
- local authorities raising business rates to pay for local infrastructure. This might lead to a reduction of visible direct taxation, but will certainly increase the cost and complexity for your business on the periphery
4. Macro matters
Further afield, wider macro issues will have significant implications on markets, supply chains, employment and the cost and choice of location within which to operate. Think sinking oil prices, rising shale gas, collapsing steel and coal, and what a Trump-led Republican charge might mean for trade into the US. Do you have this all on your radar?
5. Compliance watch
More and more, as regulatory complexity grows, the burden on businesses – and on the GCs of those businesses – is becoming about not just demonstrating that you're not crossing the line but that you have the processes in place to show that compliance is not just luck. But compliance with what? Here are some of the issues which should be top of your agenda in 2016:
- Modern slavery
- Health & Safety Management
- GCs' responsibilities in a listed environment
- gender pay and transgender rights
- the growth in personal accountability regimes for responsible managers, such as Persons Discharging Managerial Responsibilities for listed companies, people affected by the Senior Insurance Managers Regime, or the PRA Senior Managers Regime, through to the new Modern Slavery Act and Companies Act annual reporting regimes – the list goes on, and with it, the number of people who need to be properly trained on what their role requires of them individually at law
6. More regulation – that is even closer to home…
And then there's the SRA’s current consultation. Changes to how in-house lawyers are regulated could have far-reaching consequences for you and your teams. Of particular relevance will be:
- The potential in future for in-house teams to sell their legal services to other companies
- Privilege – the possibility of a reduction in the scope of privilege for in-house counsel, and what that means internationally
- Whether in-house teams actually need to be regulated at all, and whether future in-house teams can be legally trained but not legally qualified? After all, can you put a price on the value the qualification adds for your company?
Added to this are the newly implemented changes to CPD regulations which mean that, when it comes to your ongoing professional development, you need to be sure there's a demonstrable relevance to business need and to your personal development in the training that you take.
7. What's your purpose?
And amongst all of this is the ongoing management not only of your own role and career but the wider legal team around you. Now's the time to start broaching those difficult, but important, subjects:
- Why are you there? What's your scope and remit as GC? Where's the line drawn between being a manager and a lawyer?
- Do you have the right resource, both in terms of size and demonstrable competency?
- How do you go about demonstrating value to the business?
- Are you looking to the future? Being forward looking is more important than ever – if the rest of the business has to do a three or five year forward plan, are you doing the same?
- Contract management: get to know your contracts, your templates, your negotiation positions and your policies. Intimately
- Compliance boundaries. Who's in charge of what? Where are the conflicts? And when, if ever, are your actions covered by D&O insurance?
8. Cloudy horizons
Throw into all of this issues such as Safe Harbor, EU data protection regulation, cyber security and the growth of mobile payment technology and it's easy to see why the next 12 months could become the year of the GC – so long as you follow the famous Harvard Business Review article's recommendation and do not let other people’s monkeys (problems) ride on your back.
2016 should be an adrenaline-filled ride!