15th Mar 2023

Andrew Murdoch

Managing Director

Melbourne ACC In-House Counsel Day – Summary 2023

A compilation of the key messages we heard from some of the sessions at the Melbourne ACC In-House Legal Day.

Melbourne ACC

In-House Counsel Day Summary 2023

The team at Dovetail: Andrew Murdoch, Sonia Cason, Imogen Spouse and Charlie Smirl, had the pleasure of sponsoring, attending and exhibiting at the Melbourne ACC In-House Counsel Day on the 9^th of March.

Below is a compilation of the key messages we heard from some of the sessions at the event

Current and Emerging Ethical Issues for In-House Lawyers

Commissioner Fiona McLeay – Victorian Legal Services

Emily Madder – Siemens Energy Pty Ltd

Lawyers are generally held to a higher moral standard than other professions and are responsible for upholding the law. Ethical lawyers support/drive more comprehensive public trust.

Several unique challenges for lawyers working in-house:

Challenge of competing obligations
- Obligations to the court and law
- Obligations to the client
- Obligations to the business or employer
- Often wearing more than one hat, e.g., General Counsel/Company Secretary/Risk Officer
Pressure to bend ethical rules/responsibilities, especially from the business.
- It Can be challenging to implement professional boundaries.
- Isolated as one of only a few lawyers or seen as a roadblock.
Access to private/informal information about the business that you wouldn’t know as an external lawyer.
- This can increase the pressure on the business.
- Makes it harder to be independent and objective.

The Royal Commission into Crown unearthed unethical behaviour by both in-house counsel and law firms, which resulted in fines, strict regulation, plummeting share price, shattered reputation, and a shake-up of the executive.

(Chap 18 of the report – judgement on how lawyers at crown should’ve behaved)

How to avoid and manage ethical issues:

Look beyond the immediate problem and consider the bigger picture – the goal of the business is often to reduce liability short-term. Still, those decisions can have detrimental impacts down the line.
Due diligence on an organisation and its ethical culture – avoid being the sole conscious of an organisation; it’s essential to find out the broader business’s attitude towards compliance and ethics and whether leadership respects and values independent advice.
Develop strong relationships with the broader business, so the legal team is seen as a trusted advisor and involved in decision-making at various stages.
Help others to develop and trust their sense of morality and access their moral compass at work. Building confidence in others to stand up against poor ethical decisions will create a culture that prioritises ethics, will take the pressure off legal and implement morality in a practical sense.

The A-Team – how in-house counsel and barristers can team up for the best litigation outcome.

Robert Health KC – Victorian Bar

Rebecca Kelly – Victorian Bar

Julia Nikolic – Victorian Bar

Adam Rollnik – Victorian Bar

Why you should directly brief a barrister as in-house counsel in the early stages of a litigation matter.

It doesn’t work in every situation, but when it does:

Great value – working with a Barrister directly with be a fraction of the price of engaging one through a law firm.
Provides an independent view.
Pre-litigation disputes – Access to discrete advice from a specialist on how a matter could play out, both best and worst-case scenarios.
Efficiently manage small litigation matters – can ensure small matters are resolved quickly, especially if you don’t have a litigation background working in-house and is more cost-effective than engaging a firm.
Act as an advisor on strategy and manage processes related to litigation matters – they can assist with managing stakeholders and help plan and prepare.

How to properly brief a Barrister as in-house counsel:

Pick up the phone and get in touch as soon as possible – if you know a Barrister, call them; if they can’t help, they can provide a referral. Barristers are approachable and are happy to have a chat
If you don’t know any Barristers, ask around for referrals, or get in touch with a Clerk; they are a great resource as they have access to availability and can save you some time, providing recommendations for who would be the best fit for your needs.
Ask the barrister what they think – they can help you set priorities and discuss what’s most important.
Preparation – it’s essential to ask what they’ll need in that initial phone call, but it usually includes contractual documents, observations, quotes, invoices, complaints, and all correspondence to date.
Costing and quotes – for the most accurate quote, ensure you clearly outline the required work, how involved you want the Barrister to be, and the ultimate objective (e.g. Do you want to settle and try and avoid court etc.)
Arrange an initial strategy conference – you can work together to decide on immediate action to reduce the likelihood of escalation and what we’re trying to achieve.

It’s never too early to brief a Barrister, as they can help resolve disputes early. If it does progress to litigation, they’ve helped you shape the strategy, which can ultimately reduce costs and produce the best possible outcome.

Making Change Happen – Change Management Tips and Tricks

Katherine Biggs – Envato

Katherine King – Dazychain

Cathy Pappas – Telstra

Edwina Stevenson – Pernod Ricard Winemakers

The panel discussed their experiences implementing change, some in more confronting situations than others and how they successfully managed and led their organisation through those changes.

Telstra – Structural Change

Cathy explained how Telstra has moved to an Agile Working Model, where the organisational structure is not around teams, e.g. Legal Team, Finance Team etc., but “chapters” and “missions”. These groups focus on outcomes, so the legal team is a chapter allocated to a mission.

Learnings:

Training – Look at how legal will do agile instead of how the broader company are doing agile.
Title changes – Senior Lawyer is now a Chapter Lead, these title changes were confronting for people, so it was essential to ensure the language you’re moving towards holds value for people, particularly the legal team.
Managing and comforting people through change – role model a positive mindset while holding space for people to adjust to the changes and provide feedback. For those early adopters or people who love change, let them take the lead and bring others along with them.
Gradual change vs. faster change – Take a giant leap of faith and jump in but allow space to adapt.

Pernod Ricard Winemakers – New anti-bribery and risk statement

Edwina discussed how the introduction of new French Laws around anti-bribery forced her business to shift its mindset completely.

Learnings:

Ensure management and leaders are on board – they need to be aware of the problem and what needs to happen to fix it.
Personal/individual approach – tailoring information for each person or team, so it’s relevant to their role. Edwina sat down with focus groups to explain how these anti-bribery laws would affect them.
Tailor communication – think about different ways to communicate to make people listen, for example, using videos, dot-points, graphics etc.

Envato – Motivating and engaging leadership around risk and compliance

Risk and compliance were significant pain points for people; the question concerned how you work risk and compliance into the operations and development.

Learnings:

Language and understanding – examine the barriers to understanding and use different wording to make compliance tangible and real.
Get a seat at the table – be brave and curious, and find out the pain points and issues people are facing.
Do it differently – aim to make compliance part of the company DNA, something to be considered in every decision.
Start small – make small changes and implement what you can.

A structured approach to change management is vital:

Bring people along for the journey – discuss and inform people of the objectives, make sure everyone understands what’s happening and what it will look like
Tools for change – discipline and clarity around which communication platform to use for what and when.
Champions for change – change managers are great for the grunt work, but you need a well-respected champion to guide it to bring people on the journey.
Capturing feedback – dedicate the time to collecting it in a way that people are comfortable and in a timely matter so any required changes can be implemented.

The change will happen either way, so supporting people to be resilient, adaptable, and flexible is vital as a manager.

Will ASIC knock on my door? ASIC’s key enforcement priorities in 2023

Kim Mackay – Holding Redlich

Here is the link to all 13 of ASIC’s key enforcement priorities for 2023; Kim focused on the three priorities that were most likely to impact in-house lawyers.

Misleading conduct about sustainable finance, including greenwashing.

Sustainability and environmental factors are no longer considered fluff but something critical that investors look at to make decisions, so the accuracy of these claims is essential to ASIC.

Considerations for in-house counsel:

Are statements relating to sustainability and ESG true and correct?
At this stage, there’s no obligation to report, so consider if the information you provide is valuable to the business and clients.
Review these statements on an ongoing basis.

Example case: Sustainable + (Mercer) found misleading and deceptive conduct.

Governance and director’s duties failures

Every time ASIC investigates a company, they also explore the directors and leadership to see if individuals are caught up in the case.

Example cases:

GetSwift – $15mil fine
King, Terracom Coal Test case – the first example of a whistleblower case

Unfair contract terms

New laws introduced in April 2021 around what’s considered unfair contract terms and non-compliance could result in fines of up to $50mil.

Considerations for in-house legal:

Review and retrospectively examine whether standard contracts and terms are still suitable.
Ensure the other party knows and understands all terms and conditions.
Example case – Fujifilm’s standard supply agreement was found to have 38 terms that were considered unfair.

What to do if ASIC comes knocking?

Internal investigations:

Ensure all investigations are thorough and prompt – stop any poor conduct in its tracks.
Appropriate escalation and updating of the board – generally, companies try and hold off informing the board on an issue for as long as possible. Still, those who have escalated matters quickly have usually been able to resolve things quicker.
Prompt reporting to ASIC – prepare documentation appropriately and quickly.
Develop a healthy culture of reporting to hopefully avoid future problems.
Remediate, fix or stop the problem/behaviour as soon as you know about it.
Maintain privilege – make changes to fix the problem going forward.

Once reported:

Be cooperative.
Ensure individuals and other stakeholders have separate representation, which is a requirement for ASIC.
Early engagement – think about and explain what you would be willing and able to do to resolve the issue (this doesn’t guarantee that the process with be any faster).
Alternative remedies – there are a bunch of different outcomes that don’t always result in court, so discuss/ask about potential alternatives.

Hypothetical | Beyond Compliant – Sexual Harassment after Respect @ Work legislation

Jodie Fox – Worklogic

The Sexual Harassment National Inquiry Report (2020) provided vital recommendations and resulted in the Respect@Work legislation that enacted six recommendations.

Most recent legislation introduces “Positive duty to prevent sexual harassment”:

Compliance powers begin in 2023 – the aim is for employers to prevent sexual harassment and implement measures to do so actively.
Examples include – collecting, tracking, and measuring data from anonymous hotlines and surveys and implementing a process to action that information.
Prioritise a person-centred and trauma-informed approach to sexual harassment cases and investigations.

Considerations for in-house counsel:

Many companies have implemented reporting channels; now, what you do with that information or evidence and when you take more formal action. Especially when the reported submission is positioned as an “I wanted to mention this, so you know, but I don’t want you to do anything about it….”
Brings into question tendency evidence and how that’s responded to – for example, the case of Robertson Goodman
Need an action plan – when does it switch from collecting the data to acting on the information? With the positive duty to prevent sexual harassment, one can no longer look at each case or piece of information in isolation. Instead, the approach must be based on a risk assessment and reducing harm.

Trauma-informed investigations:

Understanding how trauma affects the brain and engaging with people in a way that does no further harm.
Providing procedural fairness and reasonable accommodations to ensure procedural fairness; ultimately, it’s about not using their reactions against them to determine their credibility.
Ask questions in a trauma-informed way, receptive language, for example, “what happened next?”
Be clear and transparent about the process and explain what will happen at each stage.
Blueknot – provide great courses and resources on trauma-informed communication.

Cyber Incidents

Currently front of mind for everyone

So much communication/content needs to be produced during a breach

Bespoke communication

Step back before going into crisis mode and do a human human-first act. When the waves part in a few days will,you be proud of your actions and how you managed your response

Staff and affected consumers approach first.

Cyber is NOT an IT problem.

AICD – cyber-security-governance-principles