Good judgment is critical for a global pharmaceutical company—particularly when applying national and international regulation, managing patents, and when a diverse and at the same time highly specific consumer base is paramount.
Those are just some of the considerations that have legal departments working overtime. Still, Dan Troy, senior vice president and general counsel of global pharmaceutical company GSK, says the most interesting conversations take place when judgment has to be applied.
“It’s not that most questions fall into that gray,” Troy explains. “But most questions that come to the legal department are gray. In the gray, you have to apply judgment. You have to look at the strength of the legal position, the risk of enforcement, and the potential reputational or financial harm of a decision.”
The gray that Troy speaks of is not just figurative. He’s referring to the color of a box that falls between a green colored one to its left and a red colored one to its right. It forms a color-coded tool that Troy incorporated throughout GSK to help its lawyers and its business partners understand the legal implications of decisions the company wants to make. If the decision falls into the green area, then it’s clearly legal and they can proceed. If it’s in the red area, then it’s illegal and impermissible. So that middle gray ground brings a lot of questions with it.
“Different businesses will come to different conclusions about different risks, but when legal says it’s in the red and it’s a no-go, it’s gratifying when everyone understands that. It shows we’ve helped to clarify decision-making.
As Troy explains, the system’s inspiration is two-pronged. On one hand, it’s a way to find that middle ground for a corporate lawyer between being an enabler who allows the business to do what it wants while also protecting it. At the same time, it’s also finding a happy medium between the lawyers who say no too much and those who say yes too often. Troy says to picture Enron and ask where the lawyers were in that situation.
“For a younger lawyer, the easiest thing to do is say ‘no’ or ‘I’m uncomfortable,’ or ‘I wouldn’t do that,’” Troy says. “There can sometimes be a lack of clarity around decision-making.”
In an effort to not only provide accountability but to also make clear to any party why the company would or wouldn’t proceed with a particular idea, the color-coded rectangle formed the basis of a system that also includes GSK’s Business Partner Guardian survey. The company tested the survey in the United States and found enough success with it to take it global in 2017.
GSK’s Eight Business
Partner Guardian Capabilities
- Technically proficient
- Effective communicators
- Clear in their decision-making
- Demonstrate good business knowledge
- Act with a sense of urgency
- Solution oriented
- Respectful of colleagues
- Strong guardians of GSK
The survey also examines eight different capabilities in its attorneys and surveys the company’s stakeholders in order to identify how its attorneys are performing on a scale of one to five in each of the eight different categories.
“It provides us a basis to say, ‘Your clients think you’re great, but the one thing where they ranked you lower is, say, demonstrating good business knowledge. So let’s talk about that,’” Troy explains. “It’s not that we automatically translate these rankings into a performance rating; that would be wrong, especially since the sample sizes are small. But it’s a good basis for having a systematic, standard way of having a conversation about development.”
Instead of being a simple performance review, Troy says the survey provides the company with the ability to share case studies about difficult problems and how the team navigated through them. It not only helps a lawyer’s own development, but it also helps clients understand why lawyers have to say no to certain ideas.
Despite the system’s success thus far, Troy says the legal department can’t sit on its heels. The company frequently hires new lawyers and has hundreds of existing attorneys across more than fifty countries. “The conversation will always have to be on the table to ensure GSK’s legal department gets it right,” he says.
That sense of working toward 100 percent success is a concept Troy says was fostered early in his career when he was counsel for the Food and Drug Administration. His work at the FDA even influenced him to ultimately move to GSK rather than go into a private practice.
“The FDA wakes up every morning and says, ‘How can we promote public health?’” Troy says. “Now, GSK is not a government regulator, but we’re answering questions like, ‘How can we discover new drugs, manufacture them safely, and get them to patients?’ What gets me up in the morning is that I’m not just out there trying to help individual clients. We’re moving toward something like a new medicine that makes the world better. I find that very gratifying.”
Making the world better takes buy-in from all the players and understanding the legal role and importance in putting patients before profits. That all goes back to determining the difference between green and red and knowing how to make sense of the gray. Troy says he’s not the only one who’s making that distinction anymore.
“When senior executives say to me, ‘So this is a no-go or can I make the decision,’ I feel gratified because I see that they’ve learned the difference between a no-go and where they have more latitude,” Troy says. “Different businesses will come to different conclusions about different risks, but when legal says it’s in the red and it’s a no-go, it’s gratifying when everyone understands that. It shows we’ve helped to clarify decision-making.”
Shook, Hardy & Bacon is proud to partner with Dan Troy and GSK. We know that successful resolution of complex legal matters requires comprehensive and creative strategies developed in partnership with our clients. Thank you, Dan and congratulations on this well-deserved recognition.
Photo: Tom Whipps