Understanding the business: how in-house lawyers can add value

Jeremy Berenzweig, Deputy General Counsel at Cummins, explores why lawyers need to thoroughly understand their business in order to add the value that will contribute to its success.

Tell us a bit about your background and the business…

Cummins is a global manufacturer of diesel engines, generator sets and related technology. When I joined Cummins more than 11 years ago, sales were about $6 billion in sales and this year the target is to exceed $19 billion. I am Deputy General Counsel for our four business units. We have 60 lawyers around the world and we all report to the General Counsel. Key for us is that we think of ourselves as one team. At the end of the day, if we’re not there to help each other, then we’re not there to help the business.

I became a lawyer because I believe in fairness and justice. I also love international business - so working in-house is the perfect combination for me especially at Cummins, because it has amazing values. Our former chairman marched with Martin Luther King to Washington; he took us into India in the 60s and China in the 70s. He believed that diversity was not just the right thing to do, but also that it was great for business. We’ve got this really long legacy and as we grow we don’t want to lose that. I think if you ask most of the leaders in the business why they joined Cummins, it’s because of the values.

What do you see as the role of the in-house lawyer?

The most important first step is to think of yourself as part of the business. Yes lawyers have a specialism, but we’re the same as every other employee – we’re trying to help the business be successful. The only way we can add value is if we understand the business. This doesn’t mean understanding just the internal workings of your company, it means understanding the markets you operate in, your customers, your suppliers and the corporate strategy. You’ve also got to understand the products – what you make, where they are positioned and why they are positioned that way.

If you don’t understand these things, then you can’t add value, because you can’t provide the insightful advice that helps the business be successful – for example finding a solution that achieves the business objectives in a less risky way or ultimately being able to offer your opinion as to whether or not to proceed with a specific project. We have a unique perspective on risk but it is only with that detailed understanding of the business that you say whether or not a risk is worth taking. Ultimately, business is about taking risks. If we don’t take risks, we never move forward. Therefore being able to couple your strategic legal advice with a detailed knowledge of the business means that you can be a valued business partner.

I always hear lawyers saying that they want to be involved at the beginning of a project or that they are always firefighting. However, to be involved ahead of time can only happen if you take it upon yourself to learn the business and demonstrate how you can add value by providing creating solutions to problems. It’s your responsibility to make sure that when you are invited to meeting that you fully participate, not purely as a lawyer, but as an integral member of the team demonstrating a commitment to help drive the project to fruition. Leaders have confidence in your judgement when they know you understand the business and are vested in its success.

Do you think as in-house counsel you have a special position as that trusted advisor, or are you like any other senior leader?

I think everyone has the same role, but I do think people look at lawyers in a different light. People think we have special knowledge. Maybe it’s the credibility we bring to the table because we know where the line is. At the end of the day it’s about seeing yourself as a leader of the company and therefore all the responsibilities and privileges that come with that. When I was younger, I always thought the leader was my boss, but actually you can be a leader and make a difference wherever you are in the organisation. It is up to you to seize the opportunity.

When starting a new in-house role, what can you do in order to understand the business as quickly as possible?

The first thing to do is talk to as many people as you can. What are their challenges? What projects are they working on and why? What are the Company’s strategic objectives - what underpins that strategy?  What are they worried about and what do they want from legal? What’s the regulatory framework? Who are our customers? Who are our competitors? My favourite question is simply - how’s business? When you understand that detail, then you can add value and advise at a high level.

Work on as many projects as you can. As you work, keep asking questions. When you join a new company, don’t lose that window of opportunity to ask all your foundational questions, because if you lose it you may be too embarrassed to ask later. I always say to new people joining Cummins that the more questions they ask, the more confidence I’ll have in them. It shows they have an enquiring mind and are trying to understand the business.

One of the presidents at Cummins once said to me: “your career is a marathon, not a sprint”. When you join an organisation you’ve got to think of it as a building process. It takes a long time to understand its products and its markets. Unfortunately, it doesn’t happen overnight.

How do you develop leadership skills?

Of course you have to be a great lawyer but you also have to have excellent management and leadership skills. From a management perspective you have to develop the soft skills such as giving presentations and communication etc and there are many providers and/or courses you can attend. To develop leadership skills is completely different - you have to be committed – like anything it doesn’t just happen, you have to work on them – to me it feels a lifelong challenge. Firstly look for as many opportunities to learn from others (the good and the bad) and then practise what you have learned. Ideally, try and find someone you respect and ask them to give you feedback on how you are doing – but you must be clear with them about what you are working on so that they can give you specific feedback.   To lead a team is not something we are taught at law school and it is tough – I firmly believe that you need a vision of where you going to create team alignment and work together to define the metrics for success. Working out how you want to work as a team is just as important.  You’ve got to define that or you can’t move forward.

At the beginning of my career, I watched other leaders and sucked it all in. Why are they doing this? What is the impact? Why did that work – why didn’t it? More recently I have started to think more about the processes we use to make a decision and whether they are sufficiently inclusive to capture all the best ideas. One of the big things I’ve learnt about leadership over the years is that I cannot effectively lead others if I do not know myself – warts and all! In the early stages of my career I tried to hide my weaknesses – I practically ignored them - but that was way too hard and getting me nowhere! By talking about my weaknesses and what I am working on allows others to step in and help me be more successful and vice versa. So maybe more simply said - be genuine - be yourself.

Go on courses. Do MBAs if you want to. But remember that there’s a lot you can learn just from being inside a business and watching other leaders and how they behave. I’ve never had a formal mentor, but I’ve had very strong bosses to learn from. They’ve always been happy to help and I could ask them any questions. If you want to, have a mentor, but don’t do that to the exclusion of building a relationship with your boss. They want you to be successful, why else would they have hired you. If you do want a mentor, work out exactly what it is you want from them.

What’s the ethical role of an in-house lawyer when balancing risk?

Ninety-nine per cent of what we do is balancing risk. What is a contract other than risk allocation? Ethics play a role, but if something is against the law then that’s a totally different question. There are some fundamental compliance issues that we just cannot tolerate. There’s a line that we will not cross. However, we can look at the business objectives and how we can help structure a deal to ensure it is compliant. That way, the company gets what it wants without crossing any lines. But in some cases you have to be willing to go all the way to the top and say ‘no, we cannot do that’. It’s hard, but you have to do it if something is really crossing that line.

Is there any other advice you would offer to in-house lawyers?

Believe in yourself! You can help the business to be successful. When giving advice, don’t rely on legal theory or abstract concepts - if you can tell a story to explain why you think the company should or shouldn’t do something, people will listen. Lots of lawyers give generic reasons, but the business needs concrete examples to help them fully understand the risk.

There’s always a tendency not to talk about mistakes. I think the opposite is true – let’s talk about our mistakes so that we never repeat them.