In-house lawyers – A strategic role for the profession

January 2, 2012

In-house lawyers in the UK are the best in the world.

No other sector of the legal profession delivers more value to business, more consistently and more innovatively than in-house lawyers and the General Counsel who lead the in-house teams are some of the most entrepreneurial and thoughtful leaders of lawyers in the world.

The US is often held up as the exemplar for in-house practice, but their legal market is less innovative and more restricted, while law firms are more powerful and companies more cautious. Elsewhere in Europe, and further afield in Africa and Asia, the in-house role is sometimes less well understood, is often still maturing and in some cases is not fully recognised by their country Law Societies and Bars.

In the UK however the Law Society fully recognises the value and importance of the profession’s in-house community. The legal market here is also highly developed and a world centre. Companies based here who employ in-house lawyers can recruit from the best firms in the world and the lawyers that rise to the top in these companies combine not just great legal skills, but commercial skills, great leadership credentials and business acumen.

For the last twelve years I have been fortunate enough to work with some of the most talented in-house teams in the UK and globally and in my judgement the role of the in-house lawyer has never been more important and the talent more impressive.

However there is SO much more that needs to be done.

Most city law firms, notwithstanding their impressive glass towers and their global presence, are still stuck with a largely outdated model of service delivery and pricing. The top firms may be stock full of brilliant minds, but for the most part law firms frustrate. They are machines built to make money for partners and only reluctantly invest in innovation or diversification. In-house teams therefore have to become more demanding, but this is not about posturing for lower fees (leave this to procurement professionals) it is about partnering with their key legal services suppliers to drive long term innovation and investment in sustainable change.

This is really important because only General Counsel can fully appreciate what their businesses need from lawyers, how legal services should be developed, how risk management strategies and processes should filter and facilitate business decisions and how competitive advantage requires the fluid combination of accessibility, speed, judgement and wisdom.

The challenge for General Counsel in the UK is therefore not the challenge of many in-house lawyers around the world. Here they do not have to fight for a voice, to be seen as independent or risk being chronically under-resourced for the risks their businesses run.

In the UK General Counsel have a different challenge; it is the challenge of making a once-in-a-generation shift that will change the profession for ever and have repercussions, done well, for legal services around the world.

Businesses need legal services that are designed to make business better, not lawyers richer. This means legal services (including advice, know-how, training, tools, systems and processes) that are available when needed, in a format and through channels that best suit each situation and at a price that is proportionate, transparent, reasonable and for value.

This will not be achieved however by posturing for change or asserting demands like a four-year old child in a toy shop. General Counsel have got to step up and change the game; they have go to work closely with their chosen law firms, insist that all self-interest is put aside and commit to a two to three year horizon that will see investment in systems, processes and people. In effect to build partnerships that ensure the very best of what in-house teams offer is seamlessly configured with the best of what law firms offer.

According to the Law Society there are 11000 in-house solicitors working in commercial and industrial organisations in England and Wales and a further 4000 in Local Government. Around 80000 work in private practice. So, very nearly 20% of the profession is not in private practice. If one-in-five lawyers are in in-house roles this means they are not just a significant constituency of legal advisors in their own right, but because they largely appoint the law firms their companies use, they are the biggest purchasers of legal services as well.

The time has come for General Counsel to be the architects of new services and new models for the delivery of those services; not the tenants in a world built by the law firms.

Given the excellent standing of the most senior lawyers in the most important in-house roles, this generation of General Counsel now carries the responsibility to help build a future that is good for business and good for the long term sustainability of the legal profession.

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