The role of a business lawyer in Volatile, Uncertain, Complex and Ambiguous situations
Canosa Abogados, Buenos Aires
I had started thinking about an article on the role of business lawyers in Volatile, Uncertain, Complex and Ambiguous (VUCA) situations by mid-2018, when the Argentine economic crisis of the previous government arose.
The legal reality in Argentina has changed so quickly since August 2018 that I could not find a moment to write that article. In 2019, we went through an exacerbation of the economic crisis; the economic consequences of the Primary, Mandatory and Simultaneous Elections (‘PASO’); political uncertainty and, finally, the crisis after the outbreak of Covid-19. Who would have imagined in 2017 that we would be standing at this point in 2020?
The term VUCA was conceived by the United States Army (specifically by the US Army War College) to describe the volatile, uncertain, complex and ambiguous scenarios that developed around the world after the Cold War, where there were two clearly defined blocks. Zigmunt Baumant then coined the term ‘liquid’ modernity, based on concepts like fluidity, plasticity, change, flexibility and adaptation. Reality is ‘liquid’ and not tied to time. It moves rapidly and cannot be stopped.
In Argentina we have been immersed in a ‘liquid’ reality for as long as I can remember. I recall going through the debt crisis of the 1980s; the hyperinflation and political crisis of 1989 (with Alfonsin’s anticipated exit); the Bonex plan; the intangibility of the Deposits Law; all sorts of banking curbs and restrictions; ‘corralito’ and ‘corralón’ (that is, the freezing of financial assets); three presidents in one week; default; holdouts; constant high inflation; the 2018/2019 crisis; and now Covid-19.
For the past 20 years we have been in a state of emergency, declared by Congress for 14 years. As legal operators and users of the Argentine legal system, we have extremely advanced training in crisis and VUCA contexts, but it is always useful (for those young lawyers who have not been through the 1989/1990 or 2001/2002 crises) to be reminded of some concepts and ideas that will help them face these ever-changing and unpredictable realities.
I will now develop some ideas, having taken advantage of this time that quarantine has provided us with, to contemplate. First, I will refer to internal crises (our law firm staff and partners), looking at how we maintain solidarity and motivation and keep the machine working. Then, I will devote some paragraphs to analysing how we can help our clients —whose interests we protect and who justify our activities — not only during the crisis peak (as we are now in quarantine), but also before any crisis, examining how we can foresee situations that, though they may seem unlikely, are not impossible (at least not in Argentina).
I will propose some ideas to make the best out of this crisis period (which will not be the last). As Nassim Nicolas Taleb says in his book ‘Antifragile’, ‘we learn to love the wind, which can extinguish a candle but also start a fire’. That is to say, we can embrace and benefit from uncertainty and chaos.
I would like to make a final clarification — which some may consider unnecessary, but which, I think, is appropriate. This is not an academic or scientific article: I will try to provide some practical examples from my own experience and some learnings gleaned under pressure. These are thoughts that I have developed after living through many crisis situations, having seen lots of frustration and many broken dreams. Most of these ideas occurred to me after the failure of Mauricio Macri’s government. I could see, at that time, a lot of disappointment and mistakes in calculations. This helped to develop some of the ideas included in this article.
The internal front
Internal front refers to the psyche of the lawyer/partner of a law firm and, in general, to their relationship with other partners, lawyers and collaborators. The leader or leaders of the team must develop — in a very short time — a great adaptability, allowing them to overcome adversity and all the stress generated by a crisis in order to ride its wave and end up even stronger and closer than before. Leadership will be shown through issues of containment and logistics, such as being able to communicate, print, sign and submit documents while the firm adapts to a new scenario.
On this matter, I also propose some ideas I have developed in the course of my work.
The tiredness that originates in taking too many consecutive decisions can lead to apathy and a lack of will. This has happened to me: it consists of a feeling where we lose hope. In stressful times, our wills and abilities to think clearly and strategically may be impaired. It becomes difficult to focus when the factual, external scenarios change drastically or when we face uncertainty.
During a crisis it is difficult to recognise (and accept) the cost of such tiredness. We believe (wrongly) that thinking and acting fast are the only options. My suggestion is to stop working — although I know that this is counterintuitive. It is not necessary to respond immediately to all enquiries. Exhaustion will often lead to poor decisions and affect the decision-making process overall. We are reminded that, during flights, we must look after ourselves before helping others. Our troops will soon realise that we are tired and may get tired in the same way, imitating the leader’s behaviour. This is why, during these times, we must commit ourselves to the new reality by maximising our work without reaching high levels of tiredness.
Trust in the team
It is very difficult to delegate but, after some time, I have realised that it is best to delegate as much as possible and that, in many situations, outcomes can be better when I am not involved. It is very common to believe that you are the only one who can solve problems, and that you can solve all the problems of the business yourself. I learnt that there is nothing better than trust in partners and collaborators during crisis. Each one of us deals with stress in a different way and could surely offer different answers to the same matter, creating a heterogeneous vision and providing a variety of solutions that one person alone may not have been able to find.
It is essential to change roles, be those administrative or legal work itself (as long as we have previously proven the abilities to take on that role), so that each one of the members of the law firm is able to occupy any space, or at least have basic training in that space. This will be helpful during a crisis, as everyone can deal with any kind of work and delegation is therefore easier.
In order to avoid frustrations on both sides (that is, on the parts of the one who delegates and the one to whom the work is delegated) it is important to remember — especially in these circumstances where we cannot give instructions personally or follow up on the work — that delegation does not mean we forget or neglect. We have to support the results of the delegated task by offering positive feedback (even when there is much to improve on).
Keep an open mind
We should always keep an open attitude and be tolerant with mistakes. Tolerable mistakes must always be welcomed, predicted and should have minimal impact on the routine of the law firm. It is also useful to share fears and acknowledge that this is an unprecedented moment for the leaders of the firm, too. It would be strange if we were to continue as though nothing had happened and as if this situation does not affect us.
An open attitude, allowing mistakes and communicating candidly will be greatly appreciated and welcome in the law firm. It will provide energy and resilience to face a long crisis process (it is clear that the crisis will continue after Covid-19 infections have diminished). To know that we are together in the same boat can help us move forward with strength and optimism. It is important for us to know that, if one of the team has an emotional breakdown, the rest of the members of the organisation will be there to help them.
Communicate with others and each other
In our law firm we communicate via Zoom every working day at 1100, as well as participating in other calls for different matters. The purpose of the call is to keep ourselves connected, to see how we are and discuss the tasks we are working on. Spending our days in lockdown is not the same and we are a lot more conscious of our moods. In order to maintain solidarity and keep in good spirits, it is important to communicate and share recommendations on how to deal with these difficult times.
Explaining, on a daily basis, the decisions that we are making contributes peace of mind to the team. This gives us the strength to work for our clients, whom we shall help more than ever for the continuity of their businesses. They rely on us during these difficult times and we must be there for them. In the following paragraphs, I will consider our clients.
I refer to clients here broadly and include not only those who pay for our services, but also all those who ask our help to take strategic, legal or commercial decisions. Sometimes these are friends or family. There are two books that helped me to put together the ideas I express here: ‘Antifragile’, which I have already mentioned above, by Nassim Nicolas Taleb; and ‘The Lost Lawyer’ by Anthony Kronman. This brief article, I repeat, is not intended to be an academic report, but instead a collection of ideas, which I hope may be useful to all of us.
I think that both books sum up, in some way, the ideas I am trying to express. On the one hand, Taleb proposes not only dominating uncertainty, but also embracing crisis and making the best out of it – that is to say, becoming better after a crisis. Being ‘antifragile' is not being robust. Something robust ‘bears’ a crisis but it does not become better after it. The antifragile individual loves random facts and uncertainty, which also means loving mistakes — some of which are easy to solve and allow us to learn a lot. Kronman’s book – key for any lawyer — deals with the role of the lawyer in society and suggests that our profession is similar to an art, in that we provide a service to the community, and proposes that we perform our role with responsibility in the times we are going through (the ‘status’ lawyer, who is not to be confused with ‘statesman’).
What I would like to show is how we can help our clients to think following these principles and see how we can help them to make the best of the crisis by using our knowledge and structure. It is clear that our clients (whether they are Argentine themselves or have invested in Argentina and have read briefly about the history of our country) must be aware of the situation and must have taken some measures, if they either are in Argentina or have come to Argentina. Regardless, we can always experience further crises. Remember the ideas we had back in 2016: I remember being at a meeting of the American Bar Association in April 2016 in New York, where everyone was talking about the new Latin American star: Argentina. Argentina was ready for its new 1990s.
With all that excitement in mind, we must adopt Taleb’s advice and seek to become antifragile. We must consider our advice and expectations to be like the Hydra, the mythical creature that has many heads. Each time one of its heads is chopped off, it grows two more, as a result of which it is seeking to be hurt. The Hydra represents the concept of antifragility described by Taleb. At the same time, Damocles’ sword (which hangs above his head by a horse’s hair) represents the other side of antifragility. Damocles enjoys a huge and spectacular feast, to which he was invited by Dionysius. When he finishes, he looks up and sees the sword hanging by the hair of a horse. This offers us a different vision of the same issue: even for the most powerful, danger is silent, inexorable and ever-present: it can fall on us unexpectedly, even after long periods of calm. We should always keep alert, especially when everything is quiet. Taleb also teaches us that those situations of extreme crisis are fertile ground for innovation, creativity and the development of new businesses. Burnt houses allow us to build something new from scratch.
I finish this article with great optimism, because I think that the Argentine people and Argentine lawyers are antifragility experts. We have fallen so many times and our skin is so thick that we remain calm in a crisis. We will survive and be stronger for this crisis — until the next one comes.