Legal functions Architecture and Culture

 

The Architecture and Culture followed by various MNC is as below:-

1. Horizontal Based (Model A)
1. All at the same level (no hierarchy at all)
2. wherein hierarchy within the team is

                                                              i.      to enjoy the benefit that as an employee is entitled based upon his/her grade

                                                            ii.      for 2^nd level of review/vetting of high value or strategic level contracts / large financial contracts

3. Project based assignments are given to each POC and his Reviewing POC to supervise the project reviewing/vetting
4. All the documents to be vetted are done by such POC and reviewing POC.
5. For distribution of the work / assignment of work the Chief POC has to keep track and accordingly and assign it. ( This is not very strictly followed hence duplication of work with two POC happens, but that is taken care by having monthly reviewing of the whole team, as generally most of the contracts go beyond a month’s period)
6. The work of printing and franking everything is done by the POC and he maintains all the records / repository of the work done by this team.
7. This team takes care of all the issues pertaining to the project assigned.
8. This is mostly followed by non-Indian based MNCs
9. This is purely related to contracts
10. For non-contract work, the respective department like HR, Personnel, Admin, takes care of it with standards/guidelines available with them and only if there are certain contracts that has deviation from guidelines comes for vetting to legal.
1. Horizontal Based (Model B)
1. One Main POC for Business and he distributes the work to Legal POC he/she feels best suited for the contract type on basis of skill set, ability, turnaround time, type of work, etc (sole discretion) who has a junior team under him/her which does not interact with Business but only vets it and send to Legal POC who finally reviews and responds
2. The advantage here, the two reviewers and juniors ensure that as per the guidelines and checklist available everything is put in such contracts and the reviewer may or may not vary the changes and also articulate that best suits to the contract.
3. This allows to use juniors and while they in training the Legal POC protects all the interest of the organization.
4. The training and standardization aspect is very important here and so the Legal POC has to ensure that his / her juniors are periodically trained to reduce his / her burden of work.
5. This model is best suited for low budgeted medium size organization
6. There is a contract management team who takes care of the printing, franking, repository, retrieval, and getting it signed by the respective signatory and so on
7. Non-Contractual Work: as mentioned in j hereinabove
8. The major difference between model A and model b, is that in the later, horizontal layer is at the senior level as compared to model A, where everyone is Legal POC, which means more risk while vetting the contract but more resource to handle issues. In Model A, each one becomes accountable and responsible so the probability of learning is fast as compared to Model B, where impression of the Legal POC will explore the juniors ability to think and respond.
2. Horizontal Based (Model C)
1. Everyone acts as legal POC (juniors and seniors) but based on the region or geography, few of the legal POCs are identified as POC and irrespective of the hierarchy, you are accountable and responsible to respond in time, to whom the business team approaches for legal support
2. The Senior act as principal helping the juniors to understand and participate in negotiation or upon escalation step in to such assignments which are handled by such a junior.
3. The Senior is part of all the responses that junior makes and senior may or may not comment; Incase of any doubt the junior approaches the senior for guidance and it is presumed that he / she is guided by the senior.
4. From Printing to franking, all the activity are done by document management team (or paralegal team)
5. Non-contractual activity / IPR / Property / Joint Ventures / High level commercial contracts are done by the non-contracting legal team specialized in it.
6. The regular business contract vetting team is not involved in issues and activities like mentioned in (e) above
3. Vertical Based (Model D)
1. The Team has a hierarchy and reporting structure at each level certain types of work is mapped (above which review is not required unless guidance required) with such a team leader playing a role of reviewing it as the accountability is mapped to such team leader
2. For eg. Threshold limit of contract below a crore value or boiler type of contracts (i.e, very complex and with too many type of products and services under one contract), contracts involving IPR, source code, etc
3. General business contracts to which the standards are in place and minor reviewing or reinforcing the standards in such normal business contracts can be done, of which the business risk and standard guidelines are in place.
4. Here the seniors have to play a vital role to work on standards and guidelines of the risk related to any nature of work and business and then thereafter float it to their juniors so that they can independently respond.
5. The final review is been done by the person (in hierarchy) accountable i.e. Team Leader
6. All the kind of activity is mapped with respect to contract and any litigation/issues related to such type of contracts.
7. Each vertical team has document management team and last mile records are maintained by such team making the hierarchy responsible
4. My last Company(ABC) business wise model under the SA Geo (Model E)
1. Legal POC mapped to each nature of transaction so any customer, vendor, NDA, LOA/POA, Notices, Misc work, etc connected to that nature of transaction would go one legal POC
2. This helped in getting hold of the issue or vetting the contract, in a speedy way;
3. As the distribution was through the system, backend could be mapped to any person replacing or joining;
4. Quantum of work pertaining to any nature of work could also be evaluated and depending upon the assessment of the work done and work requested, the strength of the legal POC could be evaluated
5. Further, flexibility was there that within the business line (eg. Within OO, Cash Management activity or KPO or LPO or R&T, etc level of services could be mapped to various available resources, reducing the burden of work based upon the review done on monthly basis)
6. Further, having a ADMIN POC group entitled any legal POC to respond any transaction without actually getting mapped to the nature work based on assignment given or due to one person on leave
7. The ATS gave back-up of all the work done by previous POC, subject the legal POC following the process;
8. Printing, franking, Repository, depository could be mapped.

 

6. My Competitor Company’s (XYZ)Legal Vetting Process (Model F)
1. Dy. General Counsel one level below the Global Head, controls the transactional vetting
2. AGM level also work on both horizontal as well vertical level transactional support
3. Manager and Asst Manager, Senior Executive, Executive, Trainees, etc report to Dy. GC while mentoring is done by AGM level
4. The work distribution is similar to geography based (or in simple words, country based or legal entity based) legal support team but Corporate AGMs contributes and participates in all the contracts across the globe except the US & UK based entity contracts.
5. There is team of IPR based in fort office
6. There is team of document management who are responsible for printing franking, repository and depository.
7. This team retrieves contracts related to a project id and hence all the contracts mapped under that ID can be retrieved; they even maintain a customer wise documentation at global level except US & UK
8. There is no legal manual and some form of guidelines are there based as training material
9. The decisions are taken by legal and disagreements are settled by Dy. GC  except of US & UK; Generally Global GC does not interfere in the decision of Dy. GC hence he is the supremo of the organization excluding UK and US.
10. The UK & US based legal team reports to Global GC directly.
11. In case of international contract where there is conflict of work, decision of Global GC is final if escalated and in general any legal entity of XYZ entering into contract shall do the legal vetting of the contracts.
12. Generally corporate AGMs, looks after RFP/Tenders using the existing junior team as per his convenience
13. There are local legal team also in offices in metro cities or required based to handle non-contractual activities and at times such team also used for contract activity, solely based on Mr. Anchal’s decision.
14. There is no business wise distribution of legal team

 

7. My thought of Legal Architecture and Culture (Model G)

 

Keeping in mind the revolutionary structure announced by MD, wherein there are two markets (A) Emerging Markets and (B) Developed Markets

 

Being part of Emerging Markets, my views are as below

 

1. Geography Legal Heads to transform in Global Legal Heads (Handling the Business Units globally within the Emerging Markets) i.e. (a) Services - IT-SS (b) Services – OO (c) Products
2. Services – IT-SS to be handled by respective legal head with the pool team [Business Unit Legal Team - ITSS]
3. Services – OO to handled by respective legal head [Business Unit Legal Team - OO]
4. Products to be handled by respective legal head with the pool team [Business Unit Legal Team - Products]
5. As far as Non – Business Units like functions across the globe, IPR with ABC Group Company, Global Compliance and Legal Governance, Acting as a Bridge with the legal department of the Developed Market and as a Reviewing Head of the Emerging Market with corporate team to handle compliance. [Global Legal Team]
6. Each Head would be responsible for all the issues within the business unit.
7. The pool team would consist of junior team members or legal executives, trainees and if possible one person will be mapped to each head so that the work delegation is possible.
8. If the ATS is used then any of us can respond in absence of the other by taking over the transaction from the place where it left by the absent legal POC, as all the communications would be available to review and take it forward with date stamp;
9. Legal Notices, Warrant, Summons, arbitration, or litigation can be handled jointly with one member from Global Legal Team and Respective Business Unit Legal Team, to ensure that transaction do not take priority over such issues plus as without the help of respective Business Unit Legal Team(BULT), it would not be possible to handle independently by Global Legal Team(GLT); If the GLT feels that it is manageable for them to handle without BULT then BULT can passively participate to have update of the issue.
10. By teaming few people the work efficiency will soon increase as the nature of work is the same and backup is always available to immediately take over.
11. Rotation of team can be done, enrich the team with knowledge of the other areas of Business Unit by having a 3 months change or allowing them to take over any assignment of other BULT or GLT and work on it till the closure as the all the information will be available on the ATS;
12. We can rename the ATS with LSS (Legal Support Services);
13. GLT and BULT would have responsibility to make standard agreements that can be available on LSS, so that any new recruit or assignee does not have to search around for the standard documents and policies that are applicable to emerging market or developed market.
14. Looking from legal function prospective, our role will always be global so I would further suggest that BULT of OO to align with Developed Market Legal Team as there are many thing that can be shared between the two team as the outsourcing activity by nature is the same only certain protective laws in developed market restrict outsourcing and employment security laws are very strong in such developed markets. This will also help if the legal team of Developed Market is not available then GLT and BULT-OO can jointly participate in supporting them offshore with minimum difficult.
15. Similarly, if the joints can be built of ITSS and Products with Developed Market Legal Team then this same team can support globally with no much difficulty.
16. One paralegal person under the GLT can have control over all document management team looking after printing/franking/repository/depository in the ATS and bridging or integrating the Legal and CFO system  can be handled by the GLT team and they can also monitor the activities by reviewing it monthly basis.