Game Changer Insights Detail
5 big questions on innovation
Lance Lee, Head of Litigation and Arbitration
Dispute resolution between companies has traditionally been viewed simply as a legal tussle in M&A processes. But what if the arbitration of the dispute itself could be innovated to actually trigger a competitive advantage for those companies in the market?
Lance Lee, Head of Litigation and Arbitration for the Lee International IP and Law Group, is a pioneer in turning the traditional legal headache of disputes into…
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How is your team changing the game within your industry sector?
We are redefining the game in arbitration by incorporating innovative corporate growth strategies to resolve arbitrations. Previously, the handling of arbitration was often perceived as a separate function of a company, outside of the company value chain. In viewing a dispute solely as a dispute instead of a corporate growth opportunity, what organizations faced was a myriad of legal procedures, sometimes time-consuming and outside of the scope of a company’s overall goals. Consequently, arbitrations could easily fall out of the hands of the company and individuals who are actual parties to arbitration and who have the most at stake in the arbitration.
In response to increasing practical challenges in the arbitration space, what I have developed is the Dispute Innovation Practice, which essentially seeks to make disputes innovative, rather than conventional. Dispute innovation changes the game in arbitration by turning arbitration into a dynamic opportunity for long-term corporate growth, rather than limiting it to the confines of the traditional in-box. This is done by introducing new M&A technologies, strategies and methods into the space of arbitration. To not just accept the status quo as it is, but to make things better by doing things differently and disrupting factors that create legal and procedural saturation in the arbitration space.
The ultimate question is: How can a company engaged in arbitration transform it into a major growth opportunity? In fact, when viewing the forest through the trees, arbitrations can pave the way for commercial growth that can far exceed day-to-day processes to increase company revenue. For example, the case of Microsoft Corporation vs. Samsung Electronics Co., Ltd. before the International Chamber of Commerce (ICC), has the potential to impact the extent to which new products involving patented technology can be introduced into new global markets spanning different continents.
In this backdrop, the message is simple and straightforward: Let’s look ahead of the game, and discover facts and reinvent strategies now that will invariably be highly relevant later, post-arbitration. With the application of M&A technology to disputes to conduct factual and legal due diligence that would ordinarily be applied to an acquisition process, highly commercially relevant facts can be identified and discovered in the process of arbitration, and an assessment can be made as to how those facts can be linked to future growth opportunities in a given market. In a prior arbitration of Hanwha/ORIX/Macquarie v. KDIC before the ICC, an important issue was whether a party could exercise a put and call option to acquire shares in a company. Foreseeably, facts that could have been identified through M&A methods and software during the document discovery process in that arbitration could have had major relevance toward the successful acquisition of a company’s shares, as well as the successful growth of that company post-acquisition. Facts showed that if the purchase of shares had taken place earlier than later, then this would have mutually benefitted the parties involved. This process prompted a quicker win-win solution.
The vision is in furtherance of redefining how arbitration is viewed, and thus handled. Companies who have adopted and shared this vision have transcended previously placed limitations of a ‘legal dispute’, and have transformed the challenge of an arbitration into a major opportunity for commercial growth.
What are some of the biggest impediments to innovation in your organization or industry sector?
A major hurdle for innovation in the legal industry is the inherent fear of “stepping out of the box.” I have seen too many talented, energetic, and highly optimistic practitioners coming out of law school, ready to apply their creativity for the betterment of their communities – only to become quickly resigned to what they assume to be ‘standard operating procedure’ of following a pre-drafted legal script. In interpreting what they perceive as traditionally accepted methods of lawyering, legal hierarchy and strict professional guidelines, an assumption seems to prevail that there is only one acceptable way to arbitrate or litigate; only one acceptable standard of winning or losing, and only one standard for writing a good brief and arguing a case. If they meet the standard operating procedure, they succeed, and if not, they fail; thus, leaving very little room for creativity and innovation. Simply put, many facets of the industry have become inadvertently resistant to innovation because of these preconceived notions of the practice. However, lawyering is not a linear process, and there is always a better way to do something.
How has innovation become engrained in your organization’s culture, and how is it being optimized?
There are three things that I encourage my colleagues and associates to do when completing tasks on a daily level: Pause, think, transform. In other words, an internally and externally-based brainstorming session in the practice group is fostered to take a step out of the daily routine, and ponder on those things that can make a longer-term impact beyond what sits on a desk or a computer screen. The legal practice is full of cutting-edge issues driven by new technologies and products, which makes it fertile grounds for innovation.
When an issue emerges, what is encouraged is not just to formulate a by-the-book response from a purely legal perspective, but also to stop and ponder how one can do something differently. In other words, what does this new issue represent in the market and what other larger issues are likely to emanate from that issue? For example, if technology is subject to patent infringement in a new market, what lessons can be learned and what measures can the originating company take for their global platform of maximizing success for new products, and entering into new markets where conventional forms of infringement may occur.Another method by which innovation is encouraged is to foster the practice of “cross-practice.” In other words, rather than sticking to one legal practice and not looking back, to expose oneself to other practice areas so as to develop better ideas of improving one’s main area of practice. As a former general counsel of a global company, I found that exposure to the other side of the corporate fence, i.e., what is truly important to the company and how major decisions are made in the company, allows for better service and solutions coming from the side of the fence as external counsel. Finally, application of ideas is critical, independent of circumstances. In other words, even if in current immediate circumstances, it may appear untimely to raise larger issues of concern, disrupting daily convention and typical routine by taking some form of concrete action, small or large, to promote a transformational idea often results in the day-to-day affairs naturally being resolved in that overall process.
What technologies, business models, and trends will drive the biggest changes in your industry over the next two years?
Newly developed internet search engines, online discussion forums and legal software solutions will completely change the picture over the next two years. Technological advancements outside of the arbitration space are improving the internal administration of justice and fairness in arbitration. Current changes to the arbitration landscape to improve the system within are going hand-in-hand with developments in online technology and software. As one example, the recently adopted UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (the “Rules on Transparency”) has set a new precedent toward how arbitration is handled. Prior to the Rules on Transparency, arbitration proceedings were largely confidential, and privately resolved between commercial parties through regulated proceedings. However, the Rules on Transparency have changed the picture by making investor-state arbitration public. Thus, public access and discussions online will subject investor-state arbitration proceedings to a greater level of transparency and improvement. The heightened level of public debate and analysis emerging from disclosure will in turn likely have a significant impact on the manner in which the arbitration is conducted, to be more fair, transparent and judicious.
Legal software solutions will also continue to be a major driving force of innovation in the industry. While not everything can be packaged and patented in software, through legal software the public is gaining greater access to overall guidelines and methods as to how to resolve a legal issue, points to consider in contract drafting, and the basic process of a merger and acquisition. These overall guidelines will lead the legal industry to become more streamlined, practical and competitive in resolving issues. Further, current software applications applied to arbitrations, such as electronic discovery tools that identify and categorize company documents based on discovery requests, can be taken one step further. Currently available e-discovery applications categorize documents as to whether they respond to a specific arbitral tribunal document request; what is being done to make disputes more innovative is to take matters one step further by identifying how those selected categories of documents are commercially relevant for the future growth of the company.
Can you share a specific innovation strategy you’ve recently encountered which you find compelling?
A compelling innovation strategy I have encountered is a customer-oriented process of identifying the originating source, and tackling that source first and foremost. In the rush of business, a clear picture of cause and effect often gets lost. This is especially the case with large corporations with global operations investing in different markets worldwide.
Multinational companies I have worked with have faced the recurring issue of losing sight of their key original goal of desiring to create and provide the best product specifically tailored to the needs of a particular country’s customer base. To return back to the basics, certain companies investing overseas have developed innovative customer-oriented strategies. The focus has been on proactive research and development closely done in conjunction with leaders and experts in the industry. Some corporations have developed regular programs with hand-picked industry experts to conceptualize with corporate teams new models for business growth and product development. In particular, an emphasis has been placed on breaking out of the traditional orthodox methods of growth, and focusing on promoting game-changing ideas to redefine the picture for the customer and the organization.
This approach also applies to arbitrations and other disputes. The questions to ask include: What are the main goals of entering into a new market, how did this arbitration emerge in the context of pursuing those goals, and how can this arbitration be innovatively applied in furtherance of achieving those goals in a given market. In this rapidly changing environment, innovation has become an essential element toward helping companies successfully achieve their goals. In the case of dispute resolution, the global landscape is changing, and how we view emerging new issues will determine success or failure going forward. By introducing innovation into the equation, we can go beyond simply resolving the dispute, and can pave the way for a commercial quantum leap to take place in the form of positive transformational growth.