Developing Business Judgment: How Not to “Kill” Your Clients—Or Your In-House Career
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Do you recall the scene from Indiana Jones and the Last Crusade (1989) in which Indy must choose the genuine grail to save his mortally wounded father? He meets the ancient knight who guards the grail, but there are so many choices: cups and chalices crafted from gold, platinum, silver, terra cotta, and wood. The ancient knight warns, “You must choose—but choose wisely, for as the true grail will bring you life, the false grail will take it from you.”
Lori L. Garrett
At that point, Indy’s antagonists rush in to make their selection. Based on the art professor’s advice, the Nazi collaborator settles on a gilded cup encrusted in jewels. “It certainly is the cup of the King of kings,” he intones, and drinks from it. Suddenly, the character begins to age ever more rapidly, before ultimately decaying and turning into dust—quite a horrific consequence for relying on his advisor’s terrible advice. The ancient knight observes dryly that “he chose poorly.”
Thankfully, in real life, lawyers with poor judgment do not typically risk literally killing their clients. Nevertheless, in-house lawyers in particular regularly advise on business decisions that may have very important consequences for their employers. So it stands that in-house lawyers should sharpen their business judgment skills not only to help their clients avoid calamitous outcomes, but also to advance their own careers.
Long gone are the days when inhouse counsel limited their input to legal analysis. It has been almost 20 years since the ACCA Docket published an article by Reebok’s then-general counsel, Jack Douglas. Entitled Reebok Rules, he identified 23 guidelines to help in-house lawyers focus on their clients’ objectives. Rule 3, entitled “Corporate Counsel Are Business People—Hone and Use Your Business Judgment,” states that in-house lawyers can contribute insights that are meaningful in resolving business issues.1 If a lawyer is contributing insights that help resolve a client’s business issues, then that person is worth keeping around—and may find new opportunities for using those skills.
One of the primary reasons lawyers give for wanting to go in-house is to have a more active role in the client’s business decisions.2 Instead of simply being asked how to do something a client wants and being limited to executing a decision that was already made, in-house lawyers are in the position to understand why a client wants to do it, and participate in making the business decisions around it. In-house lawyers know what happens after a deal or case is over; they will be able to find out whether the decision was the right decision. Certainly, most in-house lawyers also learn what it is like to live with a bad business decision after it is made.3
Do you remember how Indy fares in his critical grail decision-making process? Being the seasoned decision-maker that he is—remember, this is the third movie—Indy realizes that the authentic grail would be that of a humble carpenter, instead of a wealthy king. Knowing this helps him take the chance on the wooden cup. With much fear—and who could blame him, having seen what happened to the last guy?—Indy drinks from the wooden cup. “You have chosen wisely,” comments the ancient knight. Indy survives without a scratch, and saves his father’s life in the process.
Developing good business judgment involves two components: practice, and taking calculated risks. For in-house lawyers, having keen business judgment is often a matter of hunting for opportunities to use decisionmaking skills.4 Seeking out “stretch” assignments that require the exercise of good judgment is a great way to employ these skills. Many good advisors develop a process for evaluating information and offering sound advice, an attribute which also can be helpful. Lawyers should seek to learn from various business principals across the company. An easy way to do that is to attend business meetings, and then develop and challenge ideas in response to the problems raised instead of just sitting back and listening to banter.5 Younger lawyers especially should pay close attention to more-senior counsel when advising clients on business matters. It is critical to inquire about why certain choices are made and certain actions are taken. Understanding the answers to such questions helps develop good business judgment.
Another way in-house lawyers can take advantage of more opportunities to make competent business decisions is by considering and taking calculated career risks. A calculated career risk can be either going outside one’s comfort zone to act in a way that does not come naturally (sometimes called “going against type”), or by taking jobs in unfamiliar areas.6 Going against type means different things to different people. For some, it can mean being more aggressive, asking for what one wants or speaking up. For others, it may mean taking deserved credit or spotlighting accomplishments. The alternative, being typecast, results in being repeatedly put in a role closely patterned after a previous role, a dynamic that leaves little room for growth and development. Taking a job in an unfamiliar area or industry is another way to be exposed to new challenges, and to encounter new opportunities to make new kinds of decisions.
The grail scene in Indiana Jones and the Last Crusade ends with Indy quickly taking the wooden cup filled with water to his father, who recovers from his wounds instantly. And after a few more dramatic moments, I believe they all live happily ever after. In our real stories, with some practice and a little risk-taking, in-house lawyers can be a become part of the “happy” results that come from their sound business judgment. There is no time like the present to get started on honing these skills. DB
1 John B. Douglas III, Reebok Rules, ACCA Docket, Spring 1992, available online at www.acc.com/committees/ntic/upload/The-Reebok-Rules.pdf.
2 See MINORITY CORPORATE COUNSEL ASSOCIATION (MCCA), CREATING PATHWAYS TO DIVERSITY® FROM LAWEY TO BUSINESS PARTNER: CAREER ADVANCEMENT IN CORPORATE LAW DEPARTMENT 13–15 (2003).
3 Id. at 15.
4 Id. at 29.
6 See MCCA, supra note 3, at 29.
Lori L. Garrett is managing director for MCCA’s southeast region. She heads MCCA’s professional development services.
From the March/April 2010 issue of Diversity & The Bar®