Changing role of in-house lawyers

Senior in-house lawyers must deliver efficiency as well as legal excellence in an increasingly challenging corporate climate, writes Ben Rigby

In-house lawyers are adapting to meet internal demands for greater efficiency, while also advising on strategy – not to mention the law.

A 2013 survey undertaken by City law firm RPC showed that 68 per cent of general counsel (GC) respondents were involved in formulating commercial strategy.

Mark Harvey, head of legal at charity Age UK and chairman of the Commerce & Industry Group, says GCs should be “heard and listened to”, and have “sufficient involvement before commercial decisions are made which may have strong legal impact”.

How they do so is also changing. Tim Bratton, practice development director of Lawyers on Demand and formerly an in-house lawyer at the Financial Times, says there is a trend for GCs to focus on “advisory not execution”, spending their time providing strategic advice to move the business forward.

Mr Bratton says GCs are redeploying time-consuming tasks to a combination of junior resources, on-shore law firms or alternative legal service providers to promote efficiency.

While GCs used to focus on keeping as much work as possible in-house, now many are concentrating on “right-sourcing”, keeping the right work in-house, adding value at the boardroom table, and so are not bogged down on minutiae which can be resourced elsewhere, he says.

Sara Scott, vice-chairman of the Law Society of Scotland’s In-House Lawyers Group, adds that GCs in financial services are “facing a huge volume of regulatory change, the bedding in of new regulatory approaches and continuing litigation challenges”.

Gordon Youngson, head of legal services at UK Payments Administration, sees regulation as posing a constant challenge in “keeping up with changes and in turn ensuring that colleagues are up to speed”.

Nina Barakzai, group head of data protection at Sky, says the speed at which in-house counsel needs to move with business is no different now than ever before, but “the depth to which an in-house lawyer must stretch to deliver sound commercial, risk-based advice has grown”.

Regulation also poses in-house IT challenges. Given the sheer scale of data to be managed in financial services cases, for example, in-house lawyers are increasingly working with external service providers.

General counsels are redeploying time-consuming tasks to a combination of junior resources, on-shore law firms or alternative legal service providers to promote efficiency

This can be through near-shoring to lower-cost areas in the UK or off-shoring overseas to more cost-efficient jurisdictions to process the work. Ms Scott says there are “innovative new law firm models encouraging flexible outsourcing of legal services and depending on [their] costs and expertise internally, the balance of what to outsource and what to keep in-house may change”.

Businesses, meanwhile, are responding to a recovery in world markets to compete not only effectively, but also with renewed efficiency.

Some 70 per cent of respondents to Hogan Lovells’ 2013 Evolution report identified enhanced efficiency as a key investment driver.

Paul Gilbert, chief executive of LBC Wise Counsel and an ex-GC, says: “The key to everything is to define the role so that it is proportionate to the resources available, aligned to strategy and with credible value articulation.”

RPC’s The Changing Role of General Counsel survey found that 23 per cent of respondents were concerned about managing legal expenditure. As Ms Scott says, there is an “all-important need to demonstrate value for money to the internal client, including through reporting to management on quantified results achieved”.

Anthony Kenny, UK chapter representative for the Association of Corporate Counsel, says UK and US colleagues “talk positively about how such tools capture metrics relating to spend, tracking matters, and both the internal and external legal resources [allocated], which also enhance project management, collaboration and the sharing of information”.

Using IT to track legal costs enables the GC to see cost fluctuations or “where there is limited interaction and routine reports which do not provide enough detail to identify types of costs, and detail of work carried out against each cost heading”, says Ms Barakzai.

Where this information is available, online and in real time, management becomes smoother and more efficient, she says.

Mr Gilbert agrees that “good management information is essential” as the pre-requisite of any relationship. However, while management need not always require real-time visibility, he advocates the use of trends analysis that converts to process improvement and better risk-profiling.

Some 22 per cent of RPC respondents said they aimed to improve use of technology, in adopting new solutions for data retention, contract management and in e-discovery, as well as enabling better business advice.

According to Mr Youngson: “Ease of access to technology will fundamentally change how in-house teams interact with colleagues.”

One aspect of this, says Ms Barakzai, is the need for speed in relevant data analysis, which provides supporting evidence for conclusions reached and legal mitigation routes chosen for critical matters.

IT infrastructure, she says, can help senior management teams reach collaborative decisions where the systems deliver similar information to a specific audience.

She gives a specific example of outsourced service providers delivering more transaction-based activities, adding: “Real-time, portal-based information provides GCs with real value as it is much easier to manage tight budgets and critical issues with up-to-date information.”

Mr Bratton, however, points out: “While there is undoubtedly a role for technology to play, it is always likely to be a facilitator, rather than a solution in itself.”

He says one area in-house teams could improve is in the management of information, both internally and globally within the wider company. “The emergence of cloud-based technology solutions is making it easier for GCs to focus on improving information governance within their organisations,” he says.

“The question every GC should ask themselves, when considering whether the company’s information is adequately organised, is ‘Could I quickly create a dataroom if the company was sold?’”

If the answer is “no’, Mr Bratton concludes, then improvement is needed. The changing role of the general counsel demands no less.