Hello everyone and hello 2022!  If you are a long-time reader of the blog, you know that I like to start off January with a list of issues I believe in-house lawyers should pay attention to over the coming year.[1]  This is something I did every year as general counsel at several different companies.  Basically, I kept tabs on developments, trends, issues (or whatever) that I thought would have the most impact on the legal department over the next 12 months or so.  I did this by speaking with in-house lawyers and outside counsel, reading newspapers, blogs, reports, attending conferences, sitting in on meetings within the business, asking business leaders at the company, asking my team what they were seeing, and just generally paying attention to what was going on around me.  Once I spotted a potential issue, I looked at it and asked one simple question: How might this affect the company and the legal department?  Answering this question meant I had to understand the company’s goals and strategy so I could spot and manage risks (and hone my ability to be a more strategic partner to the business).[2]  Of course, it helps to be naturally curious about what is going on around you and be thirsty for information.  Information is gold to in-house lawyers (see my post Ten Things In-House Lawyers Should Read Every Day).  From there, I made a list of issues and worked them into the goals and activities of the legal department.

In my new book, Showing the Value of the Legal Department, I set out a checklist to help in-house lawyers quickly analyze potential risks (risks being potentially both negative and positive, e.g., taking risks can lead to positive results).  Here is a version of that checklist, and it’s a helpful filter when you look at things coming across your desk day in and day out:

• Is this a risk that can create or destroy value?
• Could this be a game-changer and how so?
• Is this something a regulator might care about/criminal?
• Could this make customers or vendors happy or upset/litigation?
• If it becomes public or goes “badly,” will it damage our reputation? 
• Is this covered by a specific law or regulations/does it comply? What’s the downside?
• What will our competitors do? How should we respond?
• Have others had problems or success with this before/lessons already learned? 
• Could this hurt someone (e.g., physical, safety, environmental mishap, reputation)?
• Is this an opportunity for the company and, if so, who needs to know?

It’s not perfect, but it works.  You are welcome to use it, create something similar, or laugh at it.  Your call.  All I know is that it helped me quickly sort through what mattered and what did not.  I still use it.  But enough background.  Time to get on with the show and another year of Ten Things You Need to Know as In-House Counsel (pause for very mild applause…). Here is my list of critical issues in-house lawyers should pay attention to and plan against for 2022:

1.   Covid 3.0.  I cannot frigging believe I am writing about Covid again.  Every time you think we have beaten it, it comes back with a vengeance and upends the world order, local order, and household order.  If Covid were a man, I’d kick it right in the nuts and then run away quickly (a strategy that served me well in middle school).  But seriously, in-house lawyers need to keep dealing with Covid at or near the top of their worry list for 2022.  Here are just a few things to keep on your radar as it relates to Covid:

• When will we return to the workplace and what issues do we need to account for?
  • Paid and unpaid family leave.
  • Mask and vaccination requirements (imposed by the employer or imposed by the government).
  • How do we deal with religious or other exemption requests?
• Remote work (it is here to stay).
  • How do we monitor remote work? Privacy considerations?
  • How do we keep remote workers engaged?
  • How do we build a team or company culture when workers are so dispersed?
  • Wage and hour issues (when are people off the clock/on the clock)?
• Mental health (our own and our team).  It has been a long two years.  We all need to think about our own mental health (see below) as well as that of the employees of the company.
• Litigation delayed as courts close back down or work through backlogs.  Will the impact of Covid make disputes more likely or less likely for my company in 2022?
• Does the pandemic provide any opportunities for the business, i.e., the news isn’t all bad?  Digital markets are booming, as are some services.  Where does your company fit in?
• What is the “new normal” for our business and our day-to-day work?  How do we manage through the enhanced uncertainty brought about by Covid – within the department and as partners with the business?

As much as we want it all to be over this year, it won’t be this year.  And, from what I am reading and hearing, it is unlikely it will ever be over and Covid will become like the flu – something we all just live with and (if you’re smart) vaccinate against.  There are some excellent law firm “Covid Resources Centers” to keep handy.  I like White and Case (it’s global), Epstein Becker Green (well organized), and Gibson Dunn (huge scope of topics)

2.  Supply Chain Hell.  It’s easy to blame Covid for the unprecedented supply chain interruptions businesses have experienced over the past two years.  A different school of thought points out that Covid is not necessarily the cause just the event that exposed the very fragile state of global supply chains generally.  All it took was one domino to fall over and start the collapse.  I tend to lean toward the latter and believe that the changes we are seeing in supply chains are permanent and something companies (and legal departments) need to deal with as that way we will conduct business for the foreseeable future.  It is time for in-house counsel to better understand the ways in which the business relies on the supply chain (to buy and sell its goods and services) and what changes – if any – need to be made to contracts, policies, department expertise, and so on.  When was the last time your company evaluated each and every supplier (and the suppliers’ suppliers) and made a determination about how reliable they will be for the next year or two?  The legal team can help get this process started.[3]  For those in the USA, think about how frustrated you get when something you order online cannot be delivered on the same day, or the next, or – God forbid – two days.  Your customers are thinking the same way and companies that can live up to customers’ expectations will be the ones that grow and profit.  One trend that will accelerate in 2022 is “on-shoring,” i.e., businesses moving back critical services and manufacturing to their home country where they are less susceptible to disruption.  Is your company thinking about this?  If so, how will the legal department be ready to help?  To go deeper on supply chain issues generally check out the SupplyChainBrain website.

3.  Politics.  I hesitate to write about anything too political because almost anything you put out there will draw a ferocious response by someone on the left or the right.[4]  But, if I am sitting in the general counsel chair in 2022, I am very attuned to politics – local, national, and global.  Here in the USA, it feels like we have never been more divided and that a company is only one careless comment away from a boycott or massive employee unrest.  As in-house counsel, this is an opportunity to partner with corporate communications, government relations, and investor relations to map out the company’s strategy around critical issues, including when to speak up/out and when to stay on the sidelines (and how to coach executives to know the risks of taking polarizing positions).  I am not advocating being cowed by the fallout from an unpopular position, rather keeping front of mind that there can be a real cost and the right people at the right levels of the company need to do the risk analysis.  On a more practical front, here are three things I would keep top of mind for 2022:

• The Biden Administration.  President Biden is still trying to find his footing and there is a mix of hyper-progressive and middle-of-the-road voices he must accommodate in his own party, let alone the hyper-conservative and middle-of-the-road voices from the other party.  How that plays out in terms of staffing agencies, appointing judges, enacting regulations (vs. laws), use of Presidential Orders, and (ever unlikely) bi-partisan agreements, will have a big impact on every business.  In-house counsel need to stay on top of what’s going on in Washington.
• Taxation.  You should be aware that several months ago a group of 136 countries agreed to enact a minimum corporate tax rate of 15% across the globe.  The goal is to reduce or eliminate the incentive for companies to shop around for places to set up headquarters or subsidiaries with the goal of reducing taxes.  While aimed at large businesses, it matters for small businesses too.[5]  Like any global agreement, it is one thing for leaders to agree at a conference.  It is another thing entirely to get legislation passed in each country to establish a uniform rate.  Regardless, if you work for a company that does business internationally and is active in managing tax exposure, you want to be up to speed on this development and watch out for when and how it gets implemented in the countries where you do business.  Staying close to CFO and the tax team is critical for this one.
• Climate-related regulations.  You may scoff at climate change, or you may be beating the drum, but there will be more and more regulations around the globe dealing with climate issues.  This includes regulations over disclosures in public reporting, limits on carbon emissions, and incentives for “green” products and services.  I’ll talk about this more below in the section on “ESG,” but it is important enough to single out here as a top issue for in-house lawyers in 2022.  At a minimum, you will want to watch critical environmental-related cases on the Supreme Court docket for 2022.  How these get decided will impact businesses for decades to come.

4.  Digital World.  In just a sentence or two we will, admittedly, get way out of my depth.  Why?  Because I am going to talk about the metaverse, NFTs, and the new “digital-world” businesses will need to operate in over the next decade.  If you are an in-house lawyer, you should start to educate yourself on these developments and thinking about whether you have the right skill sets on your team.  Start with these:

• The metaverse.  Facebook recently changed the name of its parent company to Meta.  It’s more than just an interesting name.  It was done, in large part, in recognition of the growing popularity (and monetary potential) of the metaverse, i.e., alternate/augmented reality where humans participate in a digital world via avatars.  This is why Microsoft recently bought ActivisionBlizzard for $70B – a reason to actually use 3D googles! In this digital world, you can play games, interact, and conduct business (with cash or Bitcoin) in an alternative reality.  Kind of like The Matrix without the cool fight scenes or large cable plugged into the back of your head.  The one thing you can count on is that the metaverse will thrive only if it is a way for businesses to make money.  And if there is a way to make money your company needs to think through whether it can participate and profit.  Company lawyers will need to understand how it all works, ranging from contracts to payment to intellectual property issues to disputes.  It’s a brave new world!  For an excellent summary, check out this post on CNET The Metaverse is Just Getting Started, Here’s What You Need to Know and this law firm booklet The Reed Smith Guide to the Metaverse.
• NFTs.  NFT stands for Non-Fungible Tokens.  An NFT is a tradable asset tied to a blockchain.  It is unique and cannot be copied or duplicated.  Apparently, people are finding value (big value) in NFTs of cartoons, digital art, shoes, penguins, apes, trading cards, news articles and columns, videos, and even a copy of the first Tweet.  The fundamental premise being if you own an NFT you own the only copy of that item.  So, just like owning the Mona Lisa, owning an NFT can hold value for the owner – but only so long as someone is willing to buy the NFT.  Yep, it is pretty much a new form of land speculation.  That said, it is here and there is money to be made.  Businesses like Nike are getting in on the NFT market.  Meaning, as in-house counsel, you should have an understanding of what NFTs are and whether your company can extract any value from its assets or create ways for your customers to create NFTs.  Trust me, someone will ask you this question at some point.  More importantly, NFT are intellectual property and in-house counsel will need to consider copyright, trademark, right of publicity, and basic trade secret issues when dealing with NFTs.  For more, check out this ACC article NFTs – What’s the Big Deal? A Practical Introduction and Guide for In-House Counsel and this high educational series of YouTube videos on NFTs.
• Antitrust.  Finally, something I am far more familiar with – good old antitrust law.  Well, in this case, some potential new laws as governments around the globe (and especially in the United States) look to rein in the perceived power of technology giants, from Google to Facebook to Amazon.  Lawmakers are proposing new laws to govern liability for material posted on social media to restricting self-preferencing your products over customers’ products.  Like Dodge City, lawmakers will do their best to tame the Wild West. If you work for big tech, you need to understand and follow what is going on here.  If your company is using big tech as an essential part of its day-to-day business, you need to do the same.  In my opinion, given rare bi-partisan support to “do something,” it’s not a matter of if new regulations will happen, it’s simply when and what do they look like.  See, e.g., A Year of Reckoning for Big Tech: How U.S. Lawmakers Plan to Rein in Companies Like Facebook and Google in 2022.[6]

5.  U.S. vs. Russia and China.  Sadly, I am not talking about the Olympics here.  There is some very serious tension between these three behemoths over trade, the Ukraine, Taiwan, hackers, spies, boundaries, spheres of influence, pipelines, and a number of other issues.  In-house lawyers would be wise to educate themselves on the root causes of the tension.  While actual war between these three is unlikely, fighting between proxies is not (though I do note that the “Doomsday Clock” was recently reset at 100 seconds to midnight – not good).  And it is all too easy to see things slipping off into the deep end pretty quickly.  If anything like that happens, markets and economies will be severely impacted.  At a minimum new or increased sanctions will hit the global economy, disrupting trade and, if you are an American company operating within Russia or China, there will be increased risk to your property and workforce.  More scary (and likely) is an increase in state-actor ransomware threats as a way to fight without bullets and guns.  One step all in-house counsel should take right now is ensuring their company is doing the right things to protect against such attacks.  See my post on Ransomware for more.  Likewise, in-house counsel should know where all of the company’s employees and assets are located and consider contingency plans for how to get people out of harm’s way or otherwise deal with the fallout of a new cold war.

6.  Inflation.  I am old enough to remember when inflation was a serious problem here in the United States.  I’ll just say it has been a very long time since my dinosaur and I worried about it.  But, as we have all seen, it is quickly becoming an issue, both on the personal front and for businesses around the globe (and for politicians).  The primary reasons for the spike are a) stimulus dollars in consumers’ hands increasing demand, and b) shortages of goods (brought on by supply chain issues and lack of workers – both seemingly Covid driven problems – reducing supply).  Classic economics tells us when demand is high and supply is low prices increase. While hopefully it is just a spike and will ebb as quickly as it rose, smart in-house counsel will be thinking about the impact of inflation on their legal department and the company.  Here are some things to keep in mind in 2022:

• If inflation continues to run hot, it is possible that you will be asked to cut costs.  Cost cutting is one way to allow businesses to not increase prices to customers.  Consider now ways you would look to cut costs if asked (or mandated) and ensure you have visibility into all of your spend and the drivers.  Data analytics and KPIs can help a lot here.
• Interest rates will likely rise, so be prepared to help the business lock in financing or issue new debt at more favorable rates.
• Cost cutting as businesses typically leads to layoffs.  What is your plan?  See my post on the unpleasant topic of how to fire someone and on how to make yourself indispensable for more on this.  Also, consider ways to automate or better use technology to get more out of what you already have in place.
• Look for ways to lock in law firm discounts and vendor costs.  Consider using a legal procurement process for this. And ensure you are proactively managing outside counsel spend, including engagement letters include a lock on rate increases.
• Understand that the cost to retain employees and hire new ones will be higher.  Plan accordingly.
• The company will be looking for ways to boost sales (more sales can offset the need to cut costs).  The legal department should play its part by not being overly conservative[7] and by making contracts easier to sign.  In other words, look to adjust the risk tolerance as needed to generate business.
• High inflation can affect stock prices, typically in a negative fashion.  If you work for a publicly traded company, there will be issues (good and bad) around such an increase.

7.  The Great Resignation.  While inflation may make it harder to keep or higher workers, there is another phenomenon present today that is more certain and more impactful.  The so-called “Great Resignation” is in full swing, and millions and millions of workers are quitting their jobs and moving to new employers or dropping out of the job market all together.  It is particularly acute in the health and tech sectors, driving in large part by Covid burnout, lack of childcare (also Covid), the relentless pace of remote work (Covid), Baby Boomer retirement (not Covid), and general dissatisfaction with pay and hours (kind of Covid but more just ditching low paying jobs for better opportunities).  See Who is Driving the Great Resignation.  For in-house lawyers, all of this means a few things to ponder as the year progresses:

• What can I do to retain my team?  It is far cheaper and less disruptive to keep my team than hire new team members. See my post on attracting, training, and retaining in-house legal talent.  I would also reach out to my HR partner to discuss resources and ideas.  Consider that some people have simply been waiting on bonus payouts before walking out the door.  Do you have a retention plan for your key team members?
• Is the department structured properly to meet new challenges and get the job done?  The old way is not always the best way.[8]
• Why are more in-house lawyers moving to law firms?  Is the in-house environment (and increased expectations on in-house lawyers to be partners, strategic thinkers, and so on driving them to places where they can “just be lawyers” – and make more money)?  Interesting to think about!
• What is my succession management plan?  Are we thinking and planning ahead for departures, retirements, layoffs, etc.  See my post on succession planning for more.  Do I have a good alternative legal services provider that can help me quickly fill gaps?

Check out this very information piece from the ACC, Get Ready for the Great Resignation.

8.  ESG.  Easy to confuse with MSG (yummy), ESG stands for Environmental, Social and Governance and it is red smoking hot at the moment.[9]  All in-house counsel should have a basic understanding of what it is and what it means for the company and the legal department as it is driven by consumer, investor, and stakeholder demand.  In a nutshell, ESG covers the ways the company deals with environmental issues/impact (e.g., climate change), social issues (e.g., diversity, inclusion, data use and security, human and employee rights), and corporate governance (e.g., compliance with laws, running of the board of directors, general risk management).  There is much more to it than these examples, but you can sense the general direction.  At many companies, ESG issues have the full attention of the C-Suite and the board of directors.  Anything that has that level of attention should automatically have the attention of the general counsel and the legal department.  More so, it has the attention of the employee base, whose opinions and engagement in the day-to-day success of the company will hinge – to some extent – to how employees “feel” about the place they work for.  If they feel good and like they are doing good, engagement soars.  And high levels of employee engagement are linked to company success and employee retention (which matters during the Great Resignation era).   As in-house counsel, here are some things that jump out to me when I think about ESG and 2022:

• Does the company have an ESG program?  Should it?  How should it operate and what is the role of the legal department? Who do we partner with?
• Material laws and regulations that matter to the company (e.g., data privacy) and/or its ESG program.
• Expectations of the C-Suite and the board of directors around ESG (if any).
• Employee expectations (and how is the company meeting those expectations).
• Diversity and inclusion (internally, including the legal department, and externally, vendors, law firms, society in general) and what can the legal department do to make an impact.
• Sustainability initiatives (in the department, at the company).
• Data and how is the company using personal data and is this in compliance with the law, its policies, and expectations of its customers?
• New SEC regulations around ESG disclosures (from the hit song “No Good Deed Goes Unpunished”).

For more on this, there is a great article on ESG in the ACC Docket titled The Mainstreaming of ESG in Business: The Role & Opportunities for In-House Counsel.

9.  Contract hygiene.  I harp on contracts a lot.  Why?  Because getting contracts right and done quickly is the highest and best use of the legal department in my opinion.  Contracts are the lifeblood of the business and there is huge value provided when legal departments focus effort on contract drafting and the contracting process overall.  Despite this, many legal departments are content to live with their contracts “as is” or adopt a “maybe next year” attitude.  Guess what?  Next year is here and 2022 is the year you should plan on a top to bottom examination of your contracts and doing the things you need to do to make them better and easier to sign.  As the world gets crazier and weirder (hard to believe that’s possible), the contracts you prepare will matter. Here’s what to focus on (with links to blogs I have written about these elements):

• Review all of your form agreements with a fresh eye and a plan to mark them to market.
  • Hold sessions with key stakeholders to ensure alignment around terms, risk tolerance, and process.
  • You do not have to do them all at once.  Take one or two a month (make it manageable or else the project with die).
• Make your contracts easier to sign.  Simple + fair = fast.
• Update your boilerplate, e.g., force majeure, dispute resolution, indemnities, etc.
• Create (or refresh) contract playbooks and checklists.
• Retrain department lawyers on contracts and contract negotiation (including the redline process), focus on any new developments in the law in jurisdictions that matter.
• Review contract storage and management. Consider technology to help with this process.
• Teach the business about the contracting process so they understand their agreements and are vested in being good negotiation partners and not just messengers about what the customer wants.
• Implement electronic signatures.
• Look at artificial intelligence tools and whether they can (truly) make your contracting process faster, better, or less taxing.  If so, make the case for buying the technology.  If not, don’t be fooled by shiny baubles.

There are also a number of people writing great content about contract drafting and I wrote about several of them in my last post, Best Blogs (and Other Media) for In-House Counsel (2022 Edition).  Take a look at and subscribe to Contracts Nerds (and watch for their upcoming book on redlining), and How to Contract.

10.  Focus on yourself.  All of the above deal with looking outward and paying close attention to what is happening around you and the company and thinking about any impact and how the legal department should respond or prepare (if at all).  But the above also affects each of us as individuals and as members of a family (i.e., Covid, supply chain, politics, inflation, etc.).[10]  As you focus on 2022, spend some time thinking about how to take care of yourself and your loved ones.  I wrote about preserving your mental health as an in-house lawyer last year and keeping some focus on yourself is critical to your success and the success of the legal department.  Burnout, illness, depression, and malaise are problems we all face from time to time and, if left to fester, can make you a liability to the department vs. an asset.  My three pieces of advice here (learned the hard way) are a) exercise (even just walking for an hour a day at lunch time), b) put your family first – over your job, and c) find the humor in things.  Laughing is the best defense to a stressful day.  As the great Van Wilder said “Don’t take life so seriously.  You’ll never get out alive.”  Write that down.

*****

I know this is a lot.  You should not feel like you need to spend significant time on all ten (or whatever list you come up with).  And I know it is U.S.-centric, but you can easily substitute the situation on the ground where you practice for most of the above.  Regardless, pick a few issues that you think really matter to the company and focus on those.  The important thing is developing a process to look beyond what needs to get done today and consider the longer term and things that can seemingly come out of nowhere and catch the company (and the legal department) off guard.  Anticipating issues like this is where in-house lawyers truly differentiate themselves and add value.

Sterling Miller

January 31, 2022

My fifth book, Showing the Value of the Legal Department: More Than Just a Cost Center is available now!  As the ABA says, “Buy this book or else…”  The ABA is serious about this.  And they know where you live!  You can buy it HERE.

Two of my books, Ten Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies and Ten (More) Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies Volume 2, are on sale now at the ABA website (including as e-books).

I have published two other books: The Evolution of Professional Football, and The Slow-Cooker Savant.  I am also available for speaking engagements, webinars/CLEs, coaching, training, and consulting.

Connect with me on Twitter @10ThingsLegal and on LinkedIn where I post articles and stories of interest to in-house counsel frequently.  

“Ten Things” is not legal advice nor legal opinion and represents my views only.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers.  If you have questions or comments, ideas for a post, please contact me at sterling.miller@sbcglobal.net or, if you would like a CLE for your team on this or any topic in the blog, contact me at smiller@hilgersgraben.com.

 

[1] You can check out the past year’s lists at: 2021, 2020, 2019, 2018, and 2017.

[2] You can read more about my thoughts on this at two of my blog posts, Ten Things: How to Be a Strategic Lawyer and Ten Things: Spotting, Managing, and Reporting Risk.

[3] For more on this topic, see Transforming the Global Supply Chain: Cyber Warfare, Technology, and Politics (2021) by Dennis Unkovic.  If you are at all concerned about supply chain issues, this is a must read.

[4] See, e.g., Is Civil War Looming, or Should We Calm Down?

[5] See, e.g., The Global Minimum Tax Agreement: Why It Matters for America’s Small Businesses.

[6] See also, The World Regulates Big Tech While the U.S. Dithers.

[7] In my new book on showing the value of the legal department, I discuss the cost to the business when lawyers are unduly conservative.  Ensure that the department is aligned with the risk tolerance level of the company.  Legal doesn’t run the business.

[8] See this fascinating report from McKinsey & Company Four Imperatives for the Next Generation Legal Department.

[9] See, e.g., Recent Trends and Developments in Corporate Environmental Social Governance.

[10] Check out Mindfulness and Wellness for Attorneys Amid Covid-19