With a new year approaching, general counsel at top companies across a diverse range of countries and industries share their legal teams’ priorities for 2018, what’s affecting them and what they’ll be focusing their budgets on.
The year 2017 was a busy one for many of the biggest companies in Asia, keeping in-house legal teams in industries across the board busy.
Technology has forced many industries – not just traditional media and legacy tech companies, but also restaurant chains and insurance companies – to pivot, often to digital and other internet-related trends such as the cloud and the Internet of Things, and legal teams have played an active part in changing needs of the organisation.
GCs and their teams also had to be wary about one of the biggest threats this year: cyber security and data privacy. Some of the most important companies, like the hack of major consumer credit reporting agency Equifax in September, and even law firms like the cyber attack on DLA Piper, one of the largest firms and a leader in cybersecurity, in June, have shown all legal teams – no matter how big or small – must be on their toes.
Increased scrutiny by regulators has also given rise to the importance of in-house legal teams more than ever, having to actively – and often quickly – work with watchdogs, and we see several GCs bolster in that area for the coming year.
All these developments and trends have helped in-house legal teams break out from their silo, playing a more active role aligning priorities and strategies for the whole company.
And several legal teams have finally taken their first strides to invest in the legal tech space, betting it’ll be the answer to the biggest question facing the business of law since the global financial crisis a decade ago: How to do more with less.
Darrell Chan
Vice-President and Regional Counsel, Head of Corporate Legal & Public Regulatory Affairs, APAC
Discovery Networks Asia-Pacific
How would you describe your priorities for your legal department for 2018?
My mandate coming into Discovery at the start of 2017 was to transform the legal team from a back-end support function to a pro-active partner to the commercial teams. Discovery is in the midst of pivoting from a traditional paid TV business into a dynamic digital organization. There was a clear vision for the legal team to play a part in actively supporting the changing needs of the organization, and Discovery’s legal team has evolved to become a partner in both the strategy and execution of Discovery’s business transformation.
My priorities for 2017 are developing (i) speed and accelerating the pace of contracting; (ii) agility and nimbleness to quickly course correct based on the changing nature of negotiations and regulatory landscape; (iii) a depth of understanding into the business model, operations and agenda of the commercial teams; (iv) a greater amount of collaboration between the legal and commercial teams, as well as within the legal team; and (v) a strong compliance programme for Discovery.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
Cost has been and will be a continuing pressure for the legal function. The big question for 2018 is how we do more with less. Given the increasing volume of work that comes through the legal team as Discovery expands its presence in the region organically, through new lines of businesses and via acquisitions, there is an imperative for us to identify where automation can enhance the efficiency of the lawyers. We are working with the Singapore Academy of Law through the Future Law Innovation Programme (FLIP), and with other vendors, to explore opportunities to use legal tech to augment the capabilities of the team in 2018.
The regulatory landscape in the media and tech space remains fluid and dynamic. We will continue to beef up our capabilities in the public regulatory affairs area to meet this need. Discovery will actively partner regulators to shape policies and laws in the areas of intellectual property protection, data privacy, cybersecurity, tax and OTT/media.
How will you be managing your legal spend next year? What will you be prioritising/focusing on?
We are looking at to keep costs flat. We will, however, be taking our first strides to invest in the innovation space for the legal team, and acquire technology to boost the efficiency of our lawyers.
Erica Chan
General Counsel and Chief Administrative Officer
Walmart Asia
How would you describe your priorities for your legal department for 2018?
Hiring the right talents and increase the bench strength of the market teams. Change on how we work to deal with company’s transformation and our competition. Continue to assess risk and develop a balanced approach to risk and educate the business on it. Embrace technology and use data to help with our job. Support and enhance a culture of diversity and inclusion.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
Our legal teams need to have a good understanding of the key trends that continue to impact to us and our daily work: our ongoing transformation into an omni-channel retailer, how technology changes our businesses and industry and the increase in online cross-border trade and interconnection among different businesses and markets. Our legal teams can get familiarized with these changes by visiting our stores, be a customer to the online services, try understanding what technology can facilitate and disrupt our business and continue to understand the business processes closely so they are able to give better and relevant advice around it.
How will you be managing your legal spend next year? What will you be prioritizing?
Be thoughtful in external legal spending and ensure that all members of legal department work together to ensure that we spend thoughtfully on things that really matter. Work with global legal and finance leadership to identify ways that would further allow leverage and cost efficiency through the way we work and initiate better cost-saving plans.
Wendy Chan
General Counsel & Compliance Director
McDonald’s Hong Kong
How would you describe your priorities for your legal department for 2018?
Digitalization and customization are definitely the key developments of our industry. Supporting business functions to ensure legal compliance and smooth operation will be our 2018 key priorities. All team members need to be well equipped with the necessary knowledge be it big data, cyber security, data privacy and customers' expectations etc. We, therefore, will reserve sufficient resources for training in that respect.
And with the transaction relating to franchising completed in August this year, McDonald's Hong Kong has a new shareholding structure, a lot of compliance and company secretarial works need to be taken care of. We will work closely with different teams of McDonald's global, McDonald's China as well as teams of our new shareholders to ensure smooth transition and legal compliance.
How will you be managing your legal spend next year? What will you be prioritizing?
Apart from the regular spending, next year we will deploy more resources on compliance and risk management in view of the increasingly complex business environment and we strongly believe that crisis should be avoided before it happens. And we are happy that we have different platforms for resources and knowledge sharing among McDonald's legal teams around the world which are really helpful and cost efficient.
Akiko Kikuchi
General Counsel, Head of Law, Patents & Compliance
Bayer Group Japan
How would you describe your priorities for your legal department for 2018?
Our business spans across pharmaceuticals, consumer health and crop science, generating sales of 280 billion yen ($2.48 billion) annually, according to the2016 figures. We are a small team supporting all three divisions and have plans to expand in 2018 given the increasing demands and challenges, particularly in pharmaceuticals. We will also work closely with external law firms to help augment our resource needs, particularly for upcoming M&A, alliance relationships and compliance matters.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
Our external customers and internal clients will continue to look for solution-oriented advice and pro-active support. We have launched our Business Partnering Project which means that each one of our team members will utilise tools made available in the “Mindset Change”, “Business Understanding” and “Innovation” work streams to help them develop the skills they need. With regard to “Innovation”, this was often a foreign concept for lawyers, but we have embraced it as a conscious effort to think about doing something different that provides a value-add to our stakeholders. One example is our Compliance IT app that allows employees to access compliance quizzes on a daily basis with game features. The app is entertaining and has proven to be popular among those who disliked classic style compliance training. Our stakeholders want us to think about doing things more effectively and in a creative manner and we need to continue to think of new ways to expand the effort in 2018.
How will you be managing your legal spend next year? What will you be prioritizing?
We value our existing relationship with selected law firms who work for us on a monthly retainer basis. Meanwhile, we also continue to look for value elsewhere where we can find the expertise and quality of service we are looking for, particularly in M&A and litigation. As we will often be the bridge between external law firms and our business teams, it is important that we can help manage business expectations and keep them clearly aware of cost developments. We would be in favour of discounted hourly arrangements and/or capped agreements. We clearly end up with a stronger relationship with those law firms which offer us relationship partners with whom we can frequently and openly consult on cost issues.
Anthony Luna
General Counsel
IBM Japan
How would you describe your priorities for your legal department for 2018?
My department oversees an $8 billion-plus business in Japan and supports a broad range of legacy and new cognitive businesses, in addition to M&A, litigation, compliance, and other matters that require the department's attention in a large operation. This requires the department to both support an increasing volume of work as well as to constantly keep abreast of cutting-edge offerings. In this regard, the priority is emphasising an agile work team assignment and teamwork culture that enables the department to flexibly allocate matters to the right team members – whether lawyer or non-lawyer – and resolve issues in an agile manner.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
An increasing portion of the business is shifting to cognitive businesses (for example, Watson, blockchain, cloud and IoT) that did not exist previously, which involve innovative technologies and raise novel legal issues. Accordingly, teamwork, education and training are critical. We have already taken steps to handle this challenge.
How will you be managing your legal spend next year? What will you be prioritizing?
Value. With outside counsel relationships which I believe are critical partnerships for us, it will be important to ensure that we and our outside counsel are managing work in the most cost-efficient manner – setting proper budgets, managing team members, work product – and ensuring the advice is value add. I expect regulatory and privacy areas will be important for new cognitive businesses and cloud, particularly in regulated industries such as finance and healthcare.
Rista Qatrini Manurung
Director of Legal, Compliance & Risk
AIA Financial Indonesia
How would you describe your priorities for your legal department for 2018?
Supporting the ease of doing business, so enabling the company to achieve the above goals, is the main focus of the legal department. In line with this, the key priorities of the legal team in 2018 will be to ensure close alignment of our department priorities with the priorities and business strategy of the company.
As an insurance company, the company’s main objectives are to grow and expand our primary distribution channels, increase our focus on protection products and enhance the customer experience through continuous process improvement. This direction is well understood by the legal team and we play a vital role in working across the business to help enable company results. In order to provide the needed support, the legal team has to be strong and solid, open-minded and capable of providing legal advice and solutions from the balanced perspective of both legal, business and risk management and others.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
To name a few, the increasing regulatory requirements and ongoing economic development, the increasing trend to go digital and higher competition due to new insurance entrants entering the Indonesian market will greatly impact our industry. Likewise, the legal team has to continuously respond and improve their approach to business and be more innovative and competitive in order to best serve the company. Regulatory developments will continuously be monitored through our regulatory compliance management task force and strong governance framework.
How will you be managing your legal spend next year? What will you be prioritizing?
It is predicted that legal’s current spending will not increase significantly. I am proud that my team is experienced, skilled, efficient and capable - meaning we can work autonomously without the need to engage significant external resources.
One key focus for 2018 will be on regulatory development particularly on major regulatory matters impacting our business, such as the foreign ownership limit and policyholders guarantee/protection. In addition, to ensure full compliance of regulatory and AIA Group requirements, I intend to enhance the existing regulatory database and system to also meet the needs of additional regulatory and AIA Group required reporting.
Christopher Stephens
General Counsel
Asian Development Bank
How would you describe your priorities for your legal department for 2018?
The top priority – as always – is to continue to improve the efficacy and efficiency of our legal services to the bank. Too much management attention is focused on the specific role of the general counsel and his/her role and capabilities. But in a big organisation, it’s at least as important to focus on the performance of the entire legal team. We have more than 80 staff in our legal group covering operations in more than 40 countries. They are dispensing hundreds of analyses, judgments and advice every day, affecting $30 billion of projects each year.
What developments in 2018 are you expecting will affect your legal team the most, and how are you planning on adapting to it?
We’re in the business of providing financing for developing Asia and the Pacific where 2018 growth is expected to exceed 6 percent. Although that’s encouraging, 1.4 billion people in the region still live on less than $2 a day and the region’s infrastructure needs exceed $22.6 trillion through 2030 or $1.5 trillion per year in order to maintain current growth. The need for innovation, efficiency and effectiveness has never been more urgent. As advisors and participants in every component of the Bank’s operations and management, the legal team will play a key role in creating new options, products and processes to help meet these challenges.
How will you be managing your legal spend next year? What will you be prioritizing?
Our business operates in more than 40 countries in developing Asia, spanning an enormous range of cultures, markets and legal systems. Operations are also becoming more complicated, and this diversity and complexity can lead to misunderstandings and disputes. If that weren’t enough, laws in areas of data protection, cyberlaw, security, trade, finance, environmental protection and climate change are proliferating. We need to vigilantly monitor all these developments, cultivate expertise in the most relevant, and keep our clients updated, while mitigating associated risks. We need to manage legal spend by relying increasingly on narrow areas of particular expertise and move away from traditional relationship-based engagements.
