Interview with Gonzalo Smith Ferrer

Following experience working at law firms in Santiago de Chile, New York and Madrid, with an LLM at Harvard in between, I became General Counsel of a major supermarket chain which was eventually purchased by Walmart. Looking back, I was probably a trailblazer in altering perceptions of the importance, value and prestige of the in-house leadership role. I now lead a legal team of around 200 people at Falabella.

Working in-house is about competencies and aptitude. The main role of any legal team is to shape conduct to encapsulate the values and purpose of the company.

The structural hierarchy of any GC role defines the level of freedom entrusted by the company to mould the team to promote its values. My role includes ethics, company secretary, legal advice, compliance and governance of Falabella.

The reporting line of the GC is a critical issue for me.

I report to the Chief Legal Officer who reports to the Chief Executive Officer. I once refused a General Counsel role on the basis that the hierarchical structure would require me to report to the Chief Financial Officer.

A company has three key legal ‘essences’:

1. A legal entity with corporate life, which is concerned with the rights, obligations and duties of the company.
2. An organisation as a business, which entails the business’ day-to-day legal operations.
3. A company as a corporate citizen, which involves governance, compliance and ethics.

Every document produced by a legal team should be simple and clearly set out its objectives.

My team knows that the most effective way of gaining my attention and approval is by ensuring that their advice is no longer than three lines, with the overall text less than three sentences. The documents produced by my team need to communicate the behaviour expected of employees and set out the consequences of failing to meet those expected behaviours. When I started working for Falabella I spent the first ninety days thinking about the best method to achieve what I wanted from the business and its subsidiaries. The style of the agreements and policies that my team drafts ensure the ethics of Falabella form the substance of everything that we do.

The win / play / show philosophy seeks to empower people within the business and equip them to be able to recognise when they should hand over some control to others.

It is not possible to lead a team with a vertical structure; I think it is important to empower people and embrace their role in the team by being clear about each of their responsibilities. I seek to empower my team by asking them to focus and be mindful of 3 things:

Win – The area the team specialises in and what most resources are dedicated to.

Play – Areas which will never form the expertise of the team and that should be outsourced to external legal counsel.

Show – Collaborating with external counsel to demonstrate the breadth of any knowledge which has the potential to be developed into a ‘win’.

The strategy of shaping behaviour becomes independent of the individual lawyers so that other company employees have the tools to carry out their roles and maximise their talent. The employees can do these roles better than any lawyer, or an in house legal team. To safeguard this approach, I value the ability to adapt and flexibly modify internal programmes by keeping them under constant review. The further people progress in the business the more difficult it is to value what the role of that individual is worth because, unlike in private practice, there is no clear market price for in-house legal work.

This means rewards are derived from the outcomes achieved by the in-house team. This can create unwanted changes in team personnel as there is no clear route of progression. The outcome is that the decision as to whether to stay in the role lies with the individual lawyer.

In-house progression is different because there is no sale of services and talent cannot be charged to a client.

It is particularly challenging to retain junior lawyers, but a transparent approach means helping to place those individuals in different roles because there may be no other opportunities within the company for them to grow.

The workplace should be somewhere where work is an activity. If it is simply a ‘place’ then people will not engage. To this end, I encourage an aggressive flexi time approach where employees can shift time across the week as they choose. Our flexible working policy is on a no-questions-asked basis. We cannot ask people to give 110% of themselves at work if we do not allow them to be themselves in the workplace.