Foreword: Bridging the Gap—The New Legal

At the beginning of my career, I became a lawyer. A key reason for taking that direction was that I have always believed that this profession along with the other functions in legal systems plays a key role in the cohesion, balancing, and evolution of societies.

Yes, lawyers pursue the particular objectives of their clients, and yes, there are many legal and professional boundary conditions—both for good reasons—but I still believe there is quite some room for lawyers to actively shape how we serve our clients and society at large. Much of that potential is still to be realized in particular when it comes to the legal function in enterprises and organizations.

I therefore applaud how this book purports to lure legal professionals out of their comfort zone. For me, the concept of liquid legal means dissolving the rigid demarcation lines of what legal is and does. It is about bridging the gap between on the one hand the legal, compliance, and risk management departments¹ and on the other hand all the adjacent functions in corporations, especially the customer­facing ones.

Compliance and protecting our organizations against risk, as true stewards do, have always been and will remain the core tasks of legal, and we have to keep delivering these services against the regulatory backdrop, in the most effective and efficient way possible. The law is the law, and we have to observe it. Period. That core remains stable.

But there are ways to better bridge what legal is doing and the efforts of the rest of the enterprise, without compromising the steward role.

We are able to and are increasingly called upon to enlarge our contributions to the organization we work in and for. We must go the extra mile, cross the bridge, ^[1] and fully understand both the business and the culture we serve in. If we manage to do that, the traditional corporate lines of defense can turn into enablers that add more value than ever before and even become sources of competitive edge. And we are not the only so-called enabling function that is hearing that call.

If we look at corporate culture as an expression of who we are and what we believe—often codified in purposes, values, missions—then it becomes clear that legal does not have to remain a reactive defender of the law, but can turn into a proactive leader that drives not only financial performance but corporate reputation as well, simply by “enacting” corporate culture.

I believe there is an inherent potential in the role of the legal function, of general counsels and lawyers in a company, as well as of the legal firms working for them: Every move we make in these functions has both a business side (which easily translates into money to be earned or saved) and a reputational side. That latter aspect deserves much more attention than it is currently receiving.

For too long we have neglected the influence of legal on how the companies they serve are perceived. The way a company deals with legal issues, the language it uses in legal contexts, in contracts and clauses tells a story that we are often not aware of. So do our legal decisions: when and how we negotiate, litigate, settle, and appeal and when we “interpret” the rules—all of that constantly produces context that employees and the outside world read as indicators of our corporate culture. Legal decisions and discourse clearly have strong ramifications in what the external codified law requires and what financial gains or losses may come with them for our companies, but they also have a lot to do with what a company stands for or rather would like to stand for, that is, with its purpose and its values.

Hence, legal is an actor not just in court rooms, but on the stage of corporate culture and reputation. Culture is about what people think and do, and so is legal. The link is evident. When we see large corporations in legal trouble today, often enough their corporate culture is pulled into the limelight, and their reputations incur severe damages. Corporate culture can easily become the accused these days, especially when a single human culprit cannot be identified. Especially in such highly public scenarios, the question is not just whether a company will be sentenced or acquitted in court but also what will either do to its reputation. And to make things worse, the correlation is not clear-cut—on the contrary: It is highly ambiguous.

Looking at legal in seemingly nonfinancial terms as I am suggesting here is in line with a fast-spreading trend to look at business holistically. Many companies today have started to do that. They report not just on financial KPIs, but also look at factors relating to people and corporate culture and reputation. The financial communities have an increasing interest in this full story. Investing in such KPIs is a win-win proposition. Metrics such as employee retention and employee engagement come into the focus, all of them very much related to corporate values and culture. How legal speaks, acts, and decides can be viewed as contributing to these. Hence efforts to simplify and humanize legal can be expected to make a real difference, particularly when it comes to integrity, trust, fairness, equality, and sustainability as core values. Living up to them takes more than abiding by the rules.

Again, when I say legal I of course mean any function that is somehow part of a company's set of lines of defense, including compliance offices and stewards of integrity of any ilk. My call is for these functions to pass two tests whenever they act or speak: the legal boundary conditions, of course, but also the cultural bound­ary conditions within a company.

In the end—you probably guessed it—we can safely close the loop, because culture, corporate values, and employee engagement are linked to business performance.

What in the beginning looked like a dichotomy or conflict really is not. Business is culture and culture is business. And legal is both. We need to run legal as a business, founded in a distinct corporate culture and purpose.

We have an incredible opportunity in front of us to open up and reach the next level of our profession and of the value we deliver by breaking down the walls around that very profession. I am convinced we will win that case. It is our own.

Chief Financial Officer, SAP SE Luka Mucic

Walldorf, Germany

Luka Mucic is a member of the Executive Board and chief financial officer of SAP SE and has served in this function since July 2014. He is responsible for finance and administration as well as for IT and processes of the com­pany. He began his career at SAP in 1996 as a member of SAP’s Corporate Legal department, where he focused on corporate and commercial law. Mucic holds a joint execu­tive MBA from ESSEC, France, and Mannheim Business School, Germany, and a master’s degree in law from the University of Heidelberg, Germany. He has completed the second legal state examination in Germany.