The General Counsel As A Business Partner In A Rapidly Changing World – New Technology

The General Counsel as a business partner in a rapidly changing
world

Developments in EU law are unfolding rapidly. These developments
can be seen as annoying obstacles or as an invitation to creatively
find solutions and implementations. The General Counsel acts as a
linking pin between business demands and this evolving legal
landscape and can play a vital role in realizing new
opportunities.

European developments: legal complexity is
increasing

Trade and commerce are increasingly subject to legal rules and
requirements. The EU legislator also plays a big role in this
trend. EU law increasingly dominates the legal landscape throughout
various areas. This e.g. includes rules on product liability (new
PLD), sustainability reporting (CSRD/CSDDD), AI (AI Act), consumer
protection (Omnibus II, Right to Repair), data protection (GDPR,
Data Act), platform services (Digital Markets Act), cybersecurity
(NIS-2, DORA), green goals (CRMA, Net-Zero Industry Act), and more.
Companies must remain well informed about developments in EU law to
understand e.g. what they can or must contractually agree with
their customers and suppliers, how they should structure their
corporate processes, how their employees should be trained, and how
they can or must document their activities. This is especially
important as regulators have been granted more powers and are
increasingly exercising these powers in practice, which could also
lead to PR exposure.

Implications for the Dutch business
climate?

A commonly heard opinion is that this complex and ever evolving web
of laws and regulations negatively impacts the business climate in
the Netherlands. This sentiment was, for example, voiced by the
Dutch Cabinet, which, at the end of 2022, in response to voices
from the business community, presented a package of measures to
improve the business climate in The Netherlands. Part of this
package, alongside measures in the fiscal sphere, was to consider
‘how the Dutch translation of EU rules relates to similar
policies in other (European) countries and what the effect of this
is on our competitive position’. The idea here was that where
EU directives provide for an obligation of minimum harmonisation,
Dutch law, should not be ‘stricter’ than the national law
of other member states. This is in addition to the fact that judges
in legal proceedings are obligated to interpret national law in
accordance with directives. Obviously, it helps in this respect if
parties to legal proceedings can inform judges about the contents
of EU law in an accurate and comprehensive manner.

The pivotal role of the General Counsel

Also, within companies, a high regulatory burden can sometimes be
perceived as an inhibiting factor. In this respect, the General
Counsel performs a delicate balancing act. On the one hand, the
General Counsel needs to ensure that (material) legal risks are
promptly and adequately identified and – to the extent necessary -
addressed. This presupposes at least (1) knowledge of the exact
business activities (and thus a General Counsel that is
sufficiently informed), (2) insight into the laws and regulations
applicable to these business activities or – at least – the
recognition that one or both are lacking (“To know that we
know what we know, and to know that we do not know what we do not
know, that is true knowledge” (quote attributed to Confucius))
and (3) persuasiveness and a certain degree of independence from
other stakeholders. On the other hand, in practice, of course, not
every (theoretical) risk warrants attention from those other
stakeholders, and the General Counsel who pays attention to every
minor detail quickly risks losing his or her role as a sparring
partner for the business. In other words, responding to (new) laws
and regulations is a practically oriented rather than an academic
exercise, in the context of which creating and maintaining support
from key stakeholders is crucial.

Opportunities for the General Counsel and the legal
department

Whether certain (new) legal rules ultimately have a negative impact
obviously cannot be concluded in general terms. Research from the
Harvard Business Review in 2019 (‘Why Constraints Are Good For
Innovation’) demonstrates that, under the right conditions
constraints can lead to focus and create an environment where
creativity can flourish. This is partly because a lack of
constraints can lead to decisions and actions that rely too heavily
on intuition and lead to taking the path of least resistance.
Musicians, painters, and poets often impose constraints on
themselves to stimulate their creative output, and e.g. Google also
embraces the principle ‘creativity loves constraints’. This
means there is opportunity for the modern General Counsel to add
value by highlighting opportunities. In this respect, laws and
regulations should first of all be clearly understood, after which
a concrete translation into solutions and opportunities can be made
and executed in collaboration with other stakeholders in accordance
with an action plan.

This article was previously published on the website of GCN General Counsel Netherlands

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guide to the subject matter. Specialist advice should be sought
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