Businesses and their legal counsel are being stress-tested by unprecedented developments largely out of their control: the 2020-21 COVID-19 pandemic and growing social unrest arising from racial justice issues in the United States. Top lawyers at three multinational corporations recently explained how their organizations navigated these uncharted waters and how the experience is driving positive change throughout their companies.
The COVID-19 pandemic hit global businesses hard, sapping consumer demand for in-person services, disrupting supply lines, and forcing executives to navigate a patchwork of hastily imposed government public health regulations in numerous jurisdictions. At the same time, business leaders have had to employ novel and expensive measures to protect the health of both employees and customers. Social justice issues flared up as well, leading many large organizations to make — or renew — commitments to address diversity shortcomings that are increasingly under scrutiny in the wake of the George Floyd killing by a police officer in Minnesota, the uptick in anti-Asian incidents, and the many Black Lives Matter protests taking place across the United States.
Recently, legal department leaders at Starbucks Corp., The 3M Company, and Tyson Foods Inc. shared their experiences during a panel discussion at the American Bar Association Business Law Section’s spring meeting. They described the operational challenges presented by the COVID-19 pandemic, identified a few silver linings, and offered some advice on the qualities they admire most in their outside counsel.
Company Mission, Values Point the Way
In uncertain times, companies can draw on mission statements and “values” messaging for navigation. Rachel Gonzalez, executive vice president and general counsel at Starbucks Corp., said that, during the pandemic, her company made business decisions and resource allocations it believed aligned with Starbucks’ stated mission to “nourish and inspire the human spirit, one person, one cup, one neighborhood at a time.”
Ivan K. Fong, executive vice president and chief legal and policy officer at The 3M Company, expressed a similar sentiment, stating that 3M’s mission of “applying science to improve every life” was a rallying point during the early days of the pandemic. “I think with a clear sense of those priorities, our law department was able to translate those values into action,” he said.
3M, Fong noted, is deeply involved in the country’s response to COVID-19. The company manufactures N95 masks as well as filtration materials that are used in vaccine research and production. The legal department supported business decisions in terms of when and how production workers could safely go back to manufacturing facilities to produce these vital goods. The 3M legal department was also actively engaged in shutting down illegal activity related to COVID-19 such as counterfeiting and price-gouging.
Technology, Teamwork, and Flexibility
Amy Tu, executive vice president and general counsel at Tyson Foods Inc., said that her company was able to use technology to quickly gather facts, convene the necessary decision-makers, and take action in a rapidly changing business environment.
“Our ability to embrace technology and to embrace that democratization of communications meant that we could work more quickly to address the issues that were so important to the frontline team members all the way up to our managers and leaders who needed to make decisions that affected the enterprise,” said Tu. “What it has shown us is that our company and our department can be quite flexible and adaptable to changing conditions.”
Fong said that the pandemic put a premium on the value of teamwork and the importance of hiring and developing great talent. Close collaboration across all of 3M enabled the legal department to tackle the counterfeiting and price-gouging that was taking place in the market for N95 masks. “This was a cross-functional effort that required very close collaboration with the business, with our manufacturing operations, with our brand and reputation teams, with communications, with government affairs, and with compliance,” he said.
“I would say the lesson for me, was really to reinforce this idea that, you know, our job as leaders is to empower our teams to take initiative, particularly during a crisis as long as we’ve articulated our priorities or principles or values,” Fong said. “It’s impossible to micromanage your way to success.”
Remote Work Is Here to Stay
The experience of these legal leaders provided yet another data point in support of the view that remote work and flexible schedules will be a permanent fixture of the post-COVID business world.
“Six months before we locked down as a business and as a country, we tried to video conference and adoption was slow,” Fong said. “And then almost overnight, everybody had to use video conferencing. It was painful at times but we were able to ramp up our adoption of collaboration tools in a way that I think would not have happened, but for the pandemic.”
The pandemic experience also removed excuses to forbid remote work and flexible schedules. “We’ve shown it can work, and I think going forward, you know, the future is both hybrid and flexible,” Fong said. He added that 3M’s approach to work flexibility will be to adopt global guidelines that can be tailored to local circumstances.
Fong said he saw value in in-person, face-to-face interactions in the legal department, which sees itself as an important point of connection for different parts of the company.
Gonzalez remarked that pervasive videoconferencing has had a welcome, humanizing effect on business interactions at Starbucks. The webcam peers into everyone’s home, making it almost impossible for co-workers to maintain a neat separation between their personal and professional lives. It’s hard to hide the fact that you’re juggling multiple, often “beloved,” stakeholders on some days, she said. “That has been one of the most enduring aspects of navigating the pandemic for us,” Gonzalez said. “I hope we never go back.”
Tu said that the experience of brainstorming the novel legal problems that arose while the company was coping with the COVID-19 pandemic gave the legal team a new appreciation of their value to the company. “It really started to open the eyes of the lawyers to say, ‘My work matters.’ It really matters to the frontline worker, it matters to our leaders, it matters to our stakeholders.”
Companies Value “Problem Solvers” As Outside Counsel
Doing business during the COVID-19 pandemic has put a premium on outside counsel that takes the time to understand the companies they work for and can serve as problem solvers — not merely managers of litigation.
“We’re really always trying to be better than who we are today,” Tu said. “And we’re always trying to find partners who will be solutions-minded.” She said that the most successful outside counsel engaged by Tyson are the ones that understand their business, mission, and values.
“It is incredibly important that outside counsel understand that we are driven from the standpoint of understanding how to provide business solutions, to be partners to our business, and not just to be managing lawsuits in cases and finding ways to tackle transactions that just come in by the truckloads every day,” she said.
Gonzalez agreed, adding that she appreciated legal advice that went beyond describing merely what was required or lawful in any given circumstance.
“The deeper question is not, ‘What must I do or must I refrain from doing?’ It’s what should I do?” Gonzalez said. “And those ethical questions that are woven into the fabric of legal advice, and navigating complex, individualize regulatory landscapes, that’s really where that extra value, I think can come into play.”
Fong said he’s had a good relationship with his outside counsel during the pandemic. He views his relationship with outside counsel as a partnership, where the perspectives of inside counsel and external lawyers complement each other. “I’d say what we appreciated most was the speed during the crisis, the business is moving quickly, and the lawyers not wanting to be the bottleneck,” he said.
Diversity Issues Will Be Addressed
Each attorney said that their legal department is taking steps to improve diversity among outside counsel.
Starbucks conducts an annual diversity assessment of its external law firms and vendors, Gonzalez said. She also described a situation where the legal department identified a law firm and an up-and-coming attorney within the firm to handle an important matter. Because diversity was a consideration, the legal department made inquiries with the firm to make sure the attorney would be the relationship partner and would get origination credit for the work. “It’s motivated by an opportunity to provide work to an extraordinarily high-caliber individual who’s diverse and a firm that’s going to support and invest, you know, in the development of that high-caliber talent,” she said.
Tu said that Tyson would be launching a diversity initiative targeting their vendors this fall. “We will be overhauling our outside counsel and outside advisors to start creating a framework that we are going to expect our attorneys and our outside advisors to work to,” she said. Included in the initiative will be goals for diverse staffing that Tyson will expect its vendors to meet.
“We want diverse teams working on our matters,” Fong said. The 3M legal department asks outside law firms if the relationship partner comes from a diverse background and who would take over that role if the relationship partner leaves the firm.
“We think that has been a successful effort because it has really motivated the firms to think more strategically about succession planning,” Fong said. “And then making sure that without relying on people’s hourly billing timekeeping, to ensure that the power and the credit within the firm go to people with diverse backgrounds.”