Hello again everyone and welcome to 2024!  If you are a long-time reader of the blog, you know that I start the new year with a list of issues I believe in-house lawyers should pay attention to over the coming 12 months.  I started doing this when I first became a general counsel way back when and something I kept doing throughout my in-house career.  I still do it now as CEO of the Hilgers Graben law firm.  To sum it up, I spend time thinking about developments, trends, and issues that may have a material impact on the legal department/business over the course of the new year.  How did/do I do this?  Here are the basics:

• It starts with simply gathering information.  As general counsel, that meant (over the last few months of the year) speaking with other in-house lawyers and outside counsel, reading newspapers, blogs, industry 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.  Information is gold to in-house lawyers, the currency of the realm.  Be greedy and gather up as much as you can.
• Once I spotted a potential issue, I looked at it from multiple angles and asked this 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 I had to be a strategic thinker, looking beyond just the legal issues that might be at stake.  One thing that has helped me over the years in terms of looking at issues from multiple angles is the “Phoenix Questions” (discussed in more detail below).
• From there, I made a list of the most critical issues I spotted and worked them into the goals and activities of the legal department for the upcoming year.  To assist me with this process, I created multiple checklists to help quickly analyze the potential risks and strategic implications of the items on my list.  Here is a version of one checklist, and it’s a helpful filter when you look at things coming across your desk day in and day out:
  • Is this something that can create or destroy value for the company?
  • How does this fit into my company’s strategic goals?
  • What is the quantitative/qualitative impact of this?
  • Could this be a game-changer and how so?
  • Is this something a regulator might care about or lead to litigation?
  • Who is impacted by this – company, competitors, vendors, customers – and how so?
  • What happens if I apply game theory to this?
  • Who needs to know about this in the department/company?
  • How can we create a competitive advantage from this?
  • Have others had problems or success with this before and what are the lessons already learned?

How you answer these questions tells you a lot about the issue you are analyzing and whether it matters or not.  You do not need a checklist, but it’s a tool that can help you quickly sort through a lot of information.  You could also use an Eisenhower Matrix (2×2) to plot issues, focusing on the ones you put in the upper right quadrant (and understand that you may move items around over the course of the year).  Regardless of what you use, It’s really all about finding a consistent framework to use to consider and think about whatever is in front of you.  So, there you go.  Enough theory, it’s time to get on with another year of Ten Things You Need to Know as In-House Counsel and my list of critical issues in-house lawyers should pay attention to and plan against for 2024:

1.  In-House burnout.  I debated with myself whether to lead off with this one but it kind of dominates my thinking about what in-house lawyers should be focusing on in 2024, i.e., if you pick nothing else on my list, this is one you need to pay attention to.  I have spent a lot of time thinking about the role of in-house counsel and how it has evolved over the years[1] and, while it is great that more and more the business appreciates the value the in-house lawyers bring to the table, the expansion of duties and expectation to be more than just lawyers may be reaching a tipping point – and not in a good way.  A recent report from Axiom revealed that 89% of in-house lawyers are dissatisfied with their jobs.  And 61% feel burned out and stressed, up from 47% the year before.  These are not good numbers (just in case that wasn’t clear).  I have seen more in-house lawyers start to leave to go back to law firms (something unheard of just five or so years ago).[2]  Why?  Because they can spend more time practicing law and less time on the non-legal part that is a growing percentage of the in-house lawyer’s day.  This means that the general counsel and those in charge of the legal department need to be very attuned to what is going on in their department and find ways to retain people, reward people, and help them find ways to be more productive without working harder.[3]  Pay attention to your team, look for signals of burnout, balance workloads, make 1/1 meetings more productive, and make sure the leadership of the company (especially HR) understands the risk of regrettable attrition in the legal department.

2.  Chevron.  You may not know much about the Chevron case now, but you will soon.  Chevron vs. the Natural Resources Defense Council is a U.S. Supreme Court decision from 1984 where the Court established the doctrine that courts should defer to an administrative agency’s interpretation of a vague statute.  This judicial deference to agencies has been the law of the land here in the USA for almost 40 years.  It appears that it is about to be overturned.  If so, this means decades of administrative law and legal precedent will be tossed out the window and, going forward, courts will decide what ambiguous statutes mean with no special deference to what the agency in charge thinks about it.  I am not sure if that is a good thing or a bad thing.  But I do know that if you are in-house counsel for a company covered by federal statutes (which means everyone), you need to pay attention to how the Court decides this case later this year.  If Chevron is overturned, all hell will break out and it will be a bit of a free-for-all when there is debate about what a statute means (even long-standing interpretations of the law will be up for grabs).  This may be good for you or it may be bad for you, most likely it will be a bit of both.  The worst part, in my mind, will be the uncertainty it generates as in-house lawyers basically knew the score when the thumb was on the scale for the agency.  If the thumb comes off it will open things up to a wide variety of judges across the country to decide you can see how judge-shopping (yes, that is most definitely a thing) and the sheer length of time it takes for critical issues to get decided by the Court where circuit courts are divided will mean different rules apply in different parts of the country for some time.  Yay…  Rest assured that the right and the left will both hate it and love it.

3.  Election year.  One of the things that makes me most sad as an American is seeing how our political system has devolved into hard partisan right and hard partisan left with, apparently, little room for what – in my opinion – truly made America so great in the past, i.e., the ability to compromise and hold a civil conversation even when we disagree.  Like many Americans I know, I simply try to tune out the empty slogans, talking (yelling) heads on television, the broken governing(?) process in Washington, and the nut jobs on both sides.  Unfortunately, if you are in-house counsel, you do not have the luxury of tuning out the clown car of stupid that is our current political situation.  Instead, you must look ahead to the November 2024 elections and start planning for what “crazy” might mean for the company, good and bad.  Since it’s more and more likely there will be a rematch no one wants between President Biden and Donald Trump, you need to consider what happens if either wins (and who controls the houses of Congress).  It’s likely to be one of these scenarios:

• President Biden vs. a Republican Congress (new).
• President Biden vs. a split Congress (what we have now).
• President Trump vs. a split Congress (what we had 2018-2020).
• President Trump vs. a Republican Congress (what we had 2016-2018).

Proactive in-house counsel are starting to sketch out what these scenarios might mean to them and the company’s strategic direction and goals (for example, mergers and acquisitions) and, most importantly, how the company can start to prepare to deal with whatever we wake up to on November 6, 2024.   Things will get clearer as we close in on November.  So, for now, this is really just a high-level exercise.  So, for now, this means staying in tune with major newspapers, your government affairs team, trade associations the company belongs to, and the C-Suite in terms of where the good and the bad might lie in any of the scenarios above and what you will do to advance or protect your interests post-election.

4.  Middle East.  Just behind the 2024 U.S. election cycle in terms of batshit crazy is the situation in the Middle East.  From the shocking horror of the Hamas attacks to the recent U.S. engagement fighting Iran-back militia groups, this is a %$#*& powder keg.  We have already seen some of the immediate economic effects of the conflicts in terms of the diversion of cargo shipping from the Red Sea/Suez Canal to longer more expensive routes.  And fragile economic recoveries (post-Covid and Russian invasion of Ukraine) can slip backward quickly if there is a material escalation of hostilities on the ground, including negative impacts on trade, higher gasoline prices, higher overall inflation, higher interest rates, stock market uncertainty, higher commodity prices, lower tourism, and more.  Of course, and not to be crass, there are opportunities for businesses that supply goods and services in high demand (or at higher prices) when there is conflict.  One thing I would be checking (or beefing up) is my force majeure clauses and considering a range of strategies including bringing my workers and supply chains closer and away from places impacted by the lunacy (see “nearshoring” discussion below).

5.  Nuclear weather.  Last year I had “nuclear verdicts” on my list of essential issues for 2023.  This year, I am going with “nuclear weather.”[4]  What the hell am I talking about?  Well, the  U.S. National Oceanic and Atmospheric Administration (NOAA) recently reported that there were 25 climate disasters, with losses over $1 billion each, in the U.S. in 2023.  That number will grow in 2024.  As I have said before, I think reasonable minds can debate the cause of climate change, but you cannot contest that our climate is changing.  From super-hot summers to severe turbulence for air travel,[5] wildfires, drought, super hurricanes, floods, massive thunderstorms, more arctic blasts, it is harder than ever for any business to remain unaffected by the weather.  Insurance costs alone are reason enough for you to pay attention to severe weather, let alone higher costs generally, lower sales, food shortages, higher transportation costs, the safety of the workforce, or the higher cost (and even stability) of utilities.  In-house lawyers should be part of (or leading) the team that:

• Plans for weather disasters (e.g., business continuity, assessing vulnerabilities of your different locations and assets).
• Obtains the right insurance policies.
• Is weatherproofing your offices (such as backup power, secondary communication networks, plans and drills for exiting the offices, and so on)
• Develops ways to help customers impacted by nuclear weather.
• Is focused on supply chain issues related to weather.
• Engages with local community leaders and charities in advance of disasters to be a good corporate citizen (including being there for your own employees impacted by severe weather).

6.  Nearshoring.  Almost 20 years I was general counsel at Travelocity and I remember the first wave of offshoring, i.e., sending jobs and manufacturing processes to low-cost countries like China, India, or the Philippines.  In the aftermath of sour relations with China, Covid, supply chain issues, time-zone management, low quality, unhappy customers, the never-ending Middle East conflict, and the like, more and more U.S. companies are choosing to reverse their decisions to offshore and bring jobs and manufacturing back to the U.S. or “nearby,” i.e., in the same time zone or within driving distance.  The big winner here is likely to be Mexico (or other Central American countries) as it meets so many of the critical needs for successful nearshoring, including low cost of doing business, educated workforce, proximity to the U.S., and low transportation costs.  If your company has used offshoring to lower costs, keep your eyes open for discussions about nearshoring.  While there are many positives to nearshoring (especially if you bring work back to your home country), there are some potential disadvantages to note, e.g., language challenges, legal system quirks, labor laws, different holidays, banking system, exchange rates, and, of course, general cultural differences.  So, smart in-house lawyers are reviewing contracts, asking lots of questions and, if nearshoring is on the agenda, starting to look hard at the entire package, good and bad, offered by the countries under consideration.  Being proactive is the right path as being reactive to nearshoring means trouble is already locked in and you are starting from scratch.

7.  Africa.  If I were sitting in the general counsel chair today (versus this nice comfortable chair in my study), I’d be thinking hard about Africa.  Why?  Well, not just because it is a vast, spectacularly beautiful place but because it is about to have a moment (or two).  And even if I am off by a year or two, the day is coming when businesses will need to have an Africa strategy, much like everyone had a China strategy just a decade ago.  I feel this way because Africa has so many things that matter in today’s business world: emerging markets, a rising middle class (of young workers), incredible amounts of natural resources (including rare earth metals), new infrastructure, and entrepreneurial spirit.  I know there are problems, debt for one thing, unstable governments, and corruption, but the incredibly diverse economies from Egypt in the north, to Kenya, Ethiopia, Ghana, to South Africa in the south, mean there is a lot for businesses (and therefore in-house legal departments) to consider — and like.  Here is one of the most interesting quotes I saw about Africa that should get your mind racing:

“The African Continental Free Trade Area (AfCFTA), launched in 2021, aims to create a (single) common market for goods and services within the continent. This integration presents immense potential for businesses to access a market of over 1.3 billion people, fostering economic growth and cross-border trade. Some regions are already ahead of the liberty of circulate across borders like the west African sub-region and the eastern African countries which set free visa/no visa policies.”[6]

Touch base with sales and strategic planning and see what they are thinking about Africa for 2024 and beyond and then consider what the legal department needs to do to be ready for those plans.

8.  Unions.  I suspect many in-house lawyers haven’t thought about unions in a long time, if ever.  I think that may change in 2024.  Looking back, I can see that 2023 was a big year for unionized labor which, in the U.S., saw 30 major labor actions including strikes at Ford, GM, and Chrysler, along with the Screen Actors Guild, the Writers Guild, Kaiser Permanente, UPS, several airlines, and others.  Additionally, unionization efforts made progress at Starbucks and Costco.  On the list for 2024?  Tesla, Amazon, and Toyota for sure, and likely many other companies.  With an administration that is favorable to labor issues (and it being an election year), 2024 will be a year where in-house lawyers should have an ear close to the ground to learn about worker discontent that can lead to a union action or, if no union exists, a potential unionization effort.  Both require a delicate hand and a firm understanding of the rules of the road when it comes to dealing with union issues.[7]  In particular, how a company behaves during a unionization effort is fraught with peril.   Here is a short list of things management can do during an organizing campaign.  Regardless, in-house counsel should have a labor law expert on speed dial and ready to go if necessary:

• Employers can express their thoughts about unions by putting up signs, talking with employees, websites, videos, and email.
• Tell employees about the company’s desire to talk with them directly (without making employees feel threatened during an organizing campaign).
• Explain that joining a union does have consequences in terms of rules and regulations, fees and dues, standing in picket lines, and inform them that employees have other ways to communicate with management other than forming a union.
• Ensure employees know that they, as individuals, have protected rights to push back against unionization.
• Consider doing this during orientation vs. waiting for as unionization effort to materialize.[8]

There are also many things you cannot do, like retaliate against employees who are attempting to organize a union.  For a comprehensive list of things you can or cannot do, see Do’s and Don’ts During Union Organizing.  Oh, and one more thing for 2024 and employees – if you fire or lay off someone, expect them to record it and post it.  Work with HR to train managers on this new reality (especially around expecting employees to bait managers into acting badly on (secret) camera).

9.  Litigation funding.  A few years ago, I wrote a blog about litigation funding.  Since then, it has only become more prevalent and, frankly, more tempting as a way in-house lawyers can  advance the interests of the company in a low-risk/high-reward manner (e.g., the cost of litigation does not hit the P&L).   In brief, litigation funders fund litigation and in exchange for that funding get a percentage of any recovery.  They also bear all the costs and risks, meaning if the case is a loser, the company is out nothing but the time.  The funder does not control the litigation, nor the choice of counsel.  They only provide the funding.   As a result, I believe litigation funding will be a key development for in-house lawyers for 2024, either as plaintiffs gaining the benefits of funding or as defendants and on the other side of a plaintiff that has little concern about cost – and is focused primarily on getting the biggest cash upside.  If you are in-house and have a sizable plaintiff’s side claim, you must take some time to consider litigation funding (either directly or through your outside counsel).  Before that day comes, however, you should educate yourselves on the basics of how it works and why it might be right for the company.

10.  Artificial Intelligence (the Big Boys are here).  Last May, I wrote about ChatGPT and generative AI and its potential to dramatically impact the productivity of in-house lawyers.  It has been a wild ride so far and 2024 promises to be just as wild and just as amazing.  I believe this because the Big Boys (Microsoft, Lexis, Westlaw, Bloomberg, etc.) have gotten their collective acts together around generative AI.  Unlike the free versions of ChatGPT, this is enterprise-ready, secure, and uses curated data designed with the needs of lawyers in mind, i.e., you can trust it.  It’s a new day indeed.  Or as my friend Barry used to say in college right around midnight after a few gin and tonics and a half-assed plan to go hit the bars, “Boys, now shit gets real.”  Yes, indeed.  Barry was right.[9]  When the Big Boys show up to play in the AI space, shit is definitely getting real.  This is great for in-house legal departments because this is truly game-changing stuff we are talking about here.  Well, it’s great except for the price.  Unlike the free version of ChatGPT (and free is almost always great), this level of generative AI costs a pretty penny.  Meaning, over the course of 2024, in-house legal departments must evaluate what is out there in terms of AI tools, the cost, and – most importantly – whether the benefits from increased productivity and reduced reliance on outside counsel is worth that cost.  I believe the answer will be yes.

*****

So, that’s all I got for today everyone.  Sorry that it’s a bit dark.  Regardless, I am sure your list will likely vary a good bit from mine, but hopefully one or two of the above will resonate with you and your team and, more importantly, I hope I have provided a primer on the process[10] of how to look ahead to see what issues might be the most impactful.  I also included a lot of links if you want to go deeper on any of these issues.  Further below (down by the footnotes, ABA bashing, and other musings I typically save for the very end), is the short discussion of the Phoenix Questions mentioned in the introduction, i.e., a list of questions developed by the CIA (yes, that CIA) to help field agents deal with issues and problems that have no prior experience dealing with.  While helpful for spies and counterspies, it’s also pretty damn helpful to in-house lawyers and in-house legal departments as another tool to help you go deeper, peer around corners, and otherwise analyze all the issues that come across your desk in 2024 yet you have no idea how to handle.  Worth a read!  Thanks for reading the blog and have a great 2024 everyone!

Sterling Miller

January 31, 2024

My fifth book, Showing the Value of the Legal Department: More Than Just a Cost Center is available now, including as an eBook!  You can buy a copy HERE.  My sixth book, on productivity, is about two weeks away from going to the publisher (so the ABA goons parked outside my house 24/7 can finally go home).  Almost there!

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, or ideas for a post, please contact me at sterling.miller@sbcglobal.net, or if you would like a CLE for your in-house legal team on this or any topic in the blog, contact me at smiller@hilgersgraben.com.

The Phoenix Checklist

The CIA created the “Phoenix Checklist” as a framework for navigating unique problems and situations. It was designed to help its agents think through approaches to situations they’ve never seen or trained for.  It consists of a series of several dozen questions that require you to view a situation or problem from multiple angles and devise a solution based on things you already know.[11]

As you work your way through the list “it’s impossible not to start coming up with next steps to get you unstuck.”[12]  The checklist provides context-free questions that enable you to look at a problem from many different angles. Sometimes, problems aren’t as easy to understand as they seem – especially inherently multi-faceted problems. The checklist questions here will help you clear ambiguities and pinpoint the “unknown unknowns” associated with a problem.[13]  Here is the full checklist of questions:

The Problem

• Why is it necessary to solve the problem?
• What benefits will you receive by solving the problem?
• What is the unknown?
• What is it you don’t yet understand?
• What is the information you have?
• Is the information sufficient? Or is it insufficient? Or redundant? Or contradictory?
• Where are the boundaries of the problem?
• What isn’t the problem?
• Should you draw a diagram of the problem? A figure?
• Can you separate the various parts of the problem? Can you write them down? What are the relationships of the parts of the problem? What are the constants of the problem?
• Have you seen this problem before?
• Have you seen this problem in a slightly different form? Do you know a related problem?
• Try to think of a familiar problem having the same or a similar unknown.
• Suppose you find a problem related to yours that has already been solved. Can you use it? Can you use its method?
• Can you restate your problem? How many different ways can you restate it? More general? More specific? Can the rules be changed?
• What are the best, worst, and most probable cases you can imagine?

The Plan

• Can you solve the whole problem? Part of the problem?
• What would you like the resolution to be? Can you picture it?
• How much of the unknown can you determine?
• Can you derive something useful from the information you have?
• Have you used all the information?
• Have you taken into account all essential notions in the problem?
• Can you separate the steps in the problem-solving process? Can you determine the correctness of each step?
• What creative thinking techniques can you use to generate ideas? How many different techniques?
• Can you see the result? How many different kinds of results can you see?
• How many different ways have you tried to solve the problem?
• What have others done?
• Can you intuit the solution? Can you check the result?
• What should be done? How should it be done?
• Where should it be done?
• When should it be done?
• Who should do it?
• What do you need to do at this time?
• Who will be responsible for what?
• Can you use this problem to solve some other problem?
• What are the unique set of qualities that makes this problem what it is and none other?
• What milestones can best mark your progress?
• How will you know when you are successful?

The beauty of a checklist like this is that you do not need to adopt all of it.  You can pick out the bits that work best for your legal department and use them as a way to train problem solvers.  Problem solvers get things done.

[1] See my latest book, Showing the Value of the Legal Department: More Than Just a Cost Center at page 7.

[2] Okay, I went back to a law firm but not because of burn out.

[3] Literally the focus of my next book that will be out later this year.

[4] I believe I am the first to coin this phrase so remember, you read it here first!

[5] I fly a lot and I know that bouts of turbulence are much more severe now than there were just a few years ago.  And I hate it.

[6] P3Africa, What to Expect From Africa as a Business Playground in 2024? https://www.linkedin.com/pulse/what-expect-from-africa-business-playground-2024-p23-africa-wfdfc/?trk=organization_guest_main-feed-card_feed-article-content (accessed January 28, 2024).

[7] See, e.g., Practical Guidance, 9 Steps to Take After Union Activity Surfaces in Your Organization, https://www.lexisnexis.com/community/insights/legal/b/thought-leadership/posts/9-steps-to-take-after-union-activity-surfaces-in-your-organization (accessed January 29, 2024).

[8] I personally don’t have anything against unions.  My dad was in a union.  I’m just spotting issues here, not writing the Capitalist Manifesto!

[9] Fortunately, Barry and I are both sworn to secrecy – and the statute of limitations has run on most of the events coinciding with shit getting real.

[10] Feel free to congratulate me on the alliteration…

[11] Mark Rabo, The Phoenix Checklist, https://www.linkedin.com/pulse/2the-phoenix-checklist-mark-rabo/ (accessed January 12, 2024).

[12] Id.

[13] See Future Business Tech, The Phoenix Checklist: How the CIA Defines Problems and Plans Solutions, https://www.futurebusinesstech.com/blog/the-phoenix-checklist-how-the-cia-defines-problems-and-plans-solutions (accessed January 12, 2024).