Juggling Risk vs Commercial Objectives

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Wendy

Welcome to this week’s Life Science LawCast. I’m Wendy Lloyd Goodwin, the founder of Life Science Law. With me today is Rebecca Clothier, a solicitor with many years of experience leading legal teams within the pharmaceutical industry. Today we are exploring the delicate balance between juggling risk and commercial objectives, a topic at the heart of in-house legal work.

So I’d like to say a warm welcome to Rebecca. I’m really excited to hear and discuss your insights in navigating and balancing the complexities of risk management and commercial success. But before we delve into this topic, could you please give a brief introduction about you and your experience within the pharmaceutical industry?

Rebecca

Thank you, Wendy. Yes, good to be here. I’ve got many years working in pharma as well as commercial health veterinary medicines.  I worked for several different, big pharma companies across, you know, UK affiliates, you know, emir operations and globally in a variety of roles.

Wendy

Thank you, Rebecca. I’m really pleased to have you here today. So today we’re going to talk about juggling risks with commercial objectives. So, you know, first of all, what do I mean by that?

There’s the law and the absolute letter of the law that always needs to be applied.  But there is also the needs of the business and the goal that they want to achieve. And sometimes what they want to achieve might sit within a grey area of the law. Of course, if it’s an absolute no, like some, you know, competition law issues, for instance, then it then it clearly is a no.

But sometimes there are new and innovative area where AAA decision needs to be made in terms of, you know, commercial risk. But I guess before we start talking about the shades of grey I wonder if Rebecca you’ve got, any insights in terms of where the business wanted to do something that wasn’t absolute no?

Rebecca 

Yeah. I mean, lots of examples, really. And I think part of this is, you know, it comes from, you know, often legal isn’t involved the very beginning of discussions.

So one point here is, if you’re properly business partnering with the business, this can become less of an issue as you work together to achieve solutions. But certainly I’ve been in a scenario where it was providing information to patients, and there was a different point of view.

A senior medical person had a very different point of view, the medic I was actually working with and I were on the same page.  So I think you know as well as the overarching bit that legal gets involved in in terms of how you are going to manage the risks with it within in the business, which is a more senior, I guess, a senior approach to things, you know, an overview approach in terms of, you know, where are our risks? How do we manage them?

I think as a as a practising In-house lawyer, you are very much looking at what tactics do you need to adopt in terms of managing the risks and those scenarios? And, you know, I think over the years I’ve developed tactics to do that.

In this scenario I gave you it was a very difficult situation because there was a real push by the business and the senior medic was on board with that to approach in a certain way.  And in the end, I, you know, I guess getting allies is a good way to, you know, so that it’s not just your voice that’s being heard.

But also for me, in that scenario, I took a step back and I analysed the whole situation and went into writing on the whole situation, which I think then focused minds in a way that, perhaps just providing the advice verbally hadn’t done change the scenario.

I think you know, as I say, there’s developing tactics as a lawyer to manage difficult stakeholders. So that you can you can find a solution for the business, but in a way that achieves your goals is a really important part of being an in house lawyer. As well as the whole big other piece at the top, which is about managing the business risk, the legal risk within the business, which is, I think, a more senior lawyers job it, you know, as it were.

Wendy

I  would agree there, I think, always explaining the why is always really important.

You know, sometimes the business is very focused on the end result that they want to get to and sometimes that end result. The way in which they have decided to do it isn’t necessarily the way in which would sit them the right side of the law.

So therefore, it’s explaining the why it sits within the wrong side of the law and the how to be able to obtain the solution that they want at the end of the day. Or perhaps it’s not necessarily the same goal or solution, but they, you know, we to work together with the business, to come up with a solution that that achieves the same objective, but in a different way.

Rebecca 

Yeah, absolutely I think asking that question, you know, what do you want to achieve is really important because that allows you to be open minded to, you know, there may be another way to achieve the goal that is, is appropriate from a legal perspective and you know, it’s finding those ways together.

I mean, time is often of the essence with these things, so sometimes it’s quite difficult to manage those stakeholders, to get them to see that the you know there is another way and actually the other way is the best way.

Which is a whole different issue in itself, and also being involved early in those discussions is important so that, you know, it’s not just a case of business coming to you once they’ve decided on something and it’s pretty much done, and they just want you to rubber  stamp it that that causes all sorts of problems. And so getting in early, I think is, is also really important in terms of, you know, managing the risk, juggling the risk with the commercial goal,

Wendy

Interesting at that point about getting in early in my in my own career. I can come up with a with a number of examples where, you know, legal is presented with, you know, a material item.

One of the scenarios I’m thinking of now is a is a distribution agreement, which clearly, when you’re talking about the distribution of the pharmaceutical products, that’s clearly a material contract. And I’ve had scenarios whereby procurement have dealt with the negotiation, got all the commercials sorted out, but forgot to get legal involved.

And, you know, then legal is asked to look and review the contract so that they can get it signed off.  And, you know, unfortunately, you can’t just rubber stamp something like a distribution agreement that’s of material importance to the business, not just in terms of its value, but also in terms of the risks and ensuring that the, the risk has been appropriately managed.

But in terms of getting in early, you know, how does legal ensure that they get in early?

Rebecca

Yeah, I think I mean, I think this does go to overall, you know, managing the legal risks in the business.

And I think you know most legal departments do this, they you know, plan for those risks, they look at those risks and they develop. Or at least I think, good, good legal teams do this. They look at the risks within their business, and they make sure that they can manage them.

So they have processes in place for ensuring that those risks are dealt with properly and that legal is brought in. I guess they ensure that the legal resources are being used in to manage the risks appropriately by design, as it were.

So when you’ve got potentially really serious risks, you know there should be processes where if those are potential issues, that legal is brought in at an early stage.  You know, if you’ve got smaller risks, you know, perhaps you have your processes.

You design your processes so that they are they manage risks by design and that legal again is brought in where it’s appropriate.  So I think those are all things tactics to use to ensure that legal is brought in at the right time.

I think above all of that, however, is the importance of in-house lawyers partnering with the business so that actually your business team see you as a trusted valued advisor and they instinctively want to bring you in, that is one of the key, most important points for any in house lawyer to bear in mind that, you know, there’s no substitute for that. You have to develop those relationships in order to achieve that.

Wendy

Absolutely right. So I mean, I’m hearing that, and my own experience is that it is good and that definitely necessary to have the SOPs  in place, the processes in terms of, you know, when you do need to come to legal to get a contract approved when you do need to get, you know, approval in terms of the initiative.

And so that’s of key importance.  But as you say that positive reputation, the business wanting you to be involved in it because they value your advice.

That is the key to being as successful as an in-house lawyer, I think is that that pro of wanting to be partnered within the business.

Rebecca

Yeah, I think, you know, talking about the juggling, the risk piece, you know, I think you are a valuable tool.  I mean, I recall a situation once where somebody described, this is an affiliate role, somebody described myself and my counterpart in the ethics and compliance team as the guardian angels of the affiliate.

And I think that’s kind of how you, you know, it would be good to be perceived that people know that you are the go to person who they want to get the advice from because they know that you will make sure that overstep any boundaries.

But, you know, hopefully you will help them find solutions too, so they can achieve their goals. But there are always shades of grey. I mean, let’s not you know, this is one of the difficulties.

I think that I think we do need to mention have good boundaries to make sure that you never break the law. But let’s be realistic, a UK perspective, for instance, the code is it doesn’t cover every scenario the pharmaceutical industry is innovative and you know there are always going to be shades of grey.

And how, Wendy, have you managed those situations in the past?

Wendy

In terms of the shades of grey with innovative situations?

So I think it’s always important to be to be humble, and, you know, if it is a new and innovative area to not pretend just because you’re the lawyer, you know that you’ve got the answer.

I think it’s being very levelling with the business to explain, you know, look, there are no precedents for what they’re wanting to do. You know, you can come and give, examples of other, perhaps similar ways in which things have been done in the past.

But I think with those shades of grey, it’s very much about working with the business to understand what they’re trying to achieve. Be able to explain the levels of grey and bringing the appropriate senior people in, or ensuring that the business has what the appropriate insights and approvals for the person whose decision it is actually to be making the decision. Sometimes things are brought to legal, and they want legal to provide the answer, which, of course, we want to do and where there is a clear yes or no to something, then we can do that.

But where it is shades of grey, it is never appropriate for legal to be, given the answer of whether a business should or shouldn’t be doing something. I mean, from my own experience, if I’ve been asked to give an opinion, I put myself into the shoes of being part of the business and to say, well, you know, look, if I was making a commercial decision this is the approach that I might take for instance. So you can give your opinion and your perspective, but being clear that that’s just your opinion and your perspective, it’s not the legal answer.

And so to be kind of like putting it back to the business of explaining what the risk is, and then, you know it is oftentimes it’s the decision of the business to decide, you know, whether that that level of risk is appropriate or not.

Rebecca

Yeah, and I think it goes back to tactics as well, doesn’t it?

In terms of being clear about where the boundary is in terms of breaking the law, but also trying to find perhaps some differences in approach that might give you defendable arguments, for instance. I’ve certainly been in situations where we’ve tried to develop a solution that would at least give us a defendable argument to support an approach.

But also, you know,  don’t be afraid, you know, if you’ve got a if the risk is significant, if it goes wrong, not being afraid to perhaps get a secondary opinion if need be. Either from a more senior lawyer in in the business or even external counsel if need be to support your view, I think that’s also another tactic that works well.

Wendy

And I think, you know, in in terms of risk itself, it’s being able to understand what that level of risk is.  I mean, for some risk, you know, a business will take the decision that legal doesn’t need to be involved at all. And think that is somewhere where legal does come in useful is to provide tools where it’s appropriate for the business to be more self serving rather than it for everything to come to the legal department.

So, you know, in all of the companies in which I have worked, there has always been thresholds in terms of what comes to legal for approval and what doesn’t and the things that don’t need to come to legal for approval legal have put in place templates.

So when I’m talking about templates here, I’m mainly referring to contracts and agreements. So sometimes you know the business will need to interact and liaise with third parties.  And there are those things that don’t need to come to legal.

But of course, if they then want to change that template, then of course, that is a situation where it might need to come to legal.

Rebecca

I mean those type of contract management processes, I agree.

I think that’s all so important for managing legal resources as well, because, you know, legal can’t see absolutely everything. So if you’ve got you know, you, you’re managing risk by design, so that you put in place perhaps self serving processes that manage risk, you know, by design.

So those templates have been written so that you know, if they’re followed, they manage the risk, I think that’s absolutely right. And they’re essential with within, you know, modern pharma businesses.

Wendy

Well, thank you, Rebecca.

That’s been a fascinating discussion. Clearly, the juggling of risk versus commercial objectives is not clear. There is no right or wrong answer as to how we navigate that with the business.

There are always a series of considerations for each particular scenario that need to be taken into account in terms of your experience, Rebecca, in this area of juggling risk versus commercial objectives, would you say, would be the one key piece of advice that you would provide to anyone coming into the pharmaceutical industry as a lawyer.

Rebecca

So I think, you know, be clear, be clear that you never break the law and then try to find solutions that derisk the scenario.

So keep in mind the objectives of the business and find arguments to defend a situation. I think I’ve always looked at things from the perspective of if I had to defend this, would I be able to? And I think having those parameters in the background is a very good way of knowing where the boundary is, and then you know it’s important then to bring the stakeholders with you.

So I think the one key thing for me would be, you know, have those navigating boundaries that that steer you.

Wendy

Thank you.

I would agree that the red face test that’s the way I’ve always looked at it as well. As you know, if what you’re doing were to be in the headlines of the newspaper, would you be OK with that?  That’s always an interesting one.Thank you.

Thank you for our listeners. Also, we hope you have enjoyed today’s discussion and that it has shed some light on the work of in house legal in terms of integrating sound legal advice with business strategy.

But if you have any questions, please do reach out to us, we would be delighted to help you.

Thank you.

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