Editorial Board Roundtable 2015
For this year’s annual compendium edition, we bring together four members of Who’s Who Legal’s editorial board. Drawing on different experiences, they discuss a range of issues affecting in-house practice and how their in-house team has responded to these emerging trends.
They also explore the evolving relationships between in-house teams and law firms, and compare the work of an in-house lawyer with that of a private practitioner
In recent years many major law firms have recognised the importance of diversity in the workplace, and many now have dedicated programmes aimed at promoting a culture of equality and increasing the representation of trainees and qualified lawyers from varying socio-economic backgrounds. This also being the case with in-house teams, what steps or measures have been introduced at your organisation to encourage a culture of diversity?
Clemens Heusch, head of European litigation, Nokia, Germany:
We are absolutely open to all diversities. Most important are legal qualifications and the ability to work in a team while at the same time being willing to accept responsibility. Our team is spread over the world, so it goes without saying that we also have lawyers and paralegals from all kind of different social backgrounds, gender, age, cultural and ethnical background in our team.
José Alberto Cerutti, senior corporate counsel, Bristol-Myers Squibb, Italy:
Our company is genuinely committed to diversity. Diversity in the workplace is to assure leveraging of differences to create a competitive advantage; it goes beyond race, ethnicity and gender, including age, sexual orientation, educational background and cognitive style. It means treating everyone with dignity and respect and learning from others. The company’s has implemented several programs to enhance diversity such as specific summer internship programs and mentoring programs and we have also included diversity throughout our engagement of outside counsels.
Juan García Montúfar, head of legal, Anglo American Peru, Peru:
Anglo American is highly committed to promoting diversity and encourages its different business units and group functions to increase the representation of lawyers from varying socio-economic backgrounds.
In Group Legal Peru the team comprises people from different social backgrounds, genders, law schools, and life experiences.
This diversity has proved to be very effective in enhancing our perception of the problems at hand that contribute to a dynamic discussion. This enables a stronger understanding of the underlying issues, and thus facilitates solutions.
Artyom Podshibyakin, Head of Legal Department, INDITEX, Russia:
Our legal team welcomes people of different cultures, religions, nations and races to work with us. The only thing they need is to have strong legal and other professional skills. This idea is supported by society in Russia, partially, probably, because of the experience of USSR, where a diversity of nations and cultures, as well as so called people’s friendship, was one of the top priorities.
There is great competition among law firms when companies decide to conduct formal reviews of their law panel. What is your company’s approach to the selection of its panel- is it better to be able to draw from a range of firms or to have a smaller circle of firms to build closer relationships with?
We believe that a smaller circle of firms is usually preferable. With a smaller circle of firms to consult, there is the opportunity to build an understanding with the firm in question, and subsequently it is usually easier to negotiate better conditions with regard to fees.
Another benefit of working with a small number of firms is the decreased likelihood of conflict issues arising with regard to the firm’s existing clients who may be active in the same industry. We find that the company’s business need are better served by limiting the number of firms we work with, and this also provides the opportunity to build closer relationships with the firms in question.
José Alberto Cerutti:
We have a list of preferred law firms which give support to our law department. This list is formed by a first group consisting of a few global firms that give advice worldwide, and a second group of small firms dedicated to specific local issues. The company’s corporate law department regularly enters into general agreements with the global firms while the in-house counsels of the different regions usually choose the local firms. The recent trend is to reduce the number of outside counsels we work with and to constantly review both groups through an intense audit of their services.
Juan García Montúfar:
My preference is to work with a smaller circle of firms and to build a close relationship with them.
Certainly, if a very specialised issue arises or a conflict of interest prevents a firm from participating we could seek support from another suitable firm, but that in my view should be the exception and not the rule.
By working closely with law firms we get to know each other well and the firms get to understand our policies, the way we operate and the needs we have. That almost personal knowledge is what allows the work to be more efficient for the benefit of both sides.
Our approach is to have a smaller circle of firms to build closer relationships with. It is better when a provider and a client know each other very well: a great deal of time is saved because the instructed firm is familiar with our business and its specific aims. They will also have an existing knowledge of previous, similar cases which can inform their advice to us.
From our perspective, working with a smaller group of firms means that we are very familiar with the abilities and specific skills of particular lawyers, and having developed long-term relationships with external firms it is possible to integrate them into your business work flow. Additionally, we can always ask for fee discounts because of the scale of the business given to a provider.
Are there currently plans at your organisation to expand the in-house capacity? Does this have any correlation with the aforementioned panel reviews?
At the moment we have a great team and have no immediate plans for expansion.
José Alberto Cerutti:
Apart from some specific normal changes; for the present year, we do not have plans to substantially expand the number of our in-house lawyers.
There is no correlation between in-house lawyers and panel reviews; both lawyers have different (and complementary) responsibilities in giving legal advice to support the business.
Juan García Montúfar:
We are not currently considering an expansion of the in-house capacity for Peru.
Although in the future we might increase our number, that should not be significant and so we will still be relying on our law firms to help us carry on the work.
No, we do not have such plans now since the number of in-house lawyers is relevant to the scale of the business. There is no correlation between legal headcount and panel reviews usually since in-house lawyers and externals lawyers in our company perform separate, different tasks.
Comparing your current in-house role with your time spent as a private practitioner, what would you say are the key differences between the two areas, in terms of the day-to-day demands of the role and requisite skills for success in each field?
Well, it is the move from a service provider to a service receiver, with all the consequences that entails. As a private practitioner, my role was more to draft submissions, to develop legal arguments, to phrase it. Now my role is more litigation management. Unfortunately I don’t always have the capacities to read every single document, to dive into each legal or technical argument. But I need to streamline, have the overall picture, report to management, make (or prepare) decisions, and keep this all within budget. That is a totally different job, but it of course helps having been a private practitioner. And the nicest thing: I don’t have to keep time records anymore.
José Alberto Cerutti:
Generally, in-house lawyers are not only legal advisors but also managers in the companies where they work; they have a generalist vision and give competent advice related to the particular business of those companies. Outside counsels, instead, are mainly engaged to complement the internal teams for very specific projects that require a high level of specialization or to handle very complex litigation matters.
Both of them need to have the necessary empathy to understand the interest of the client and the best ways to give appropriate, efficient and rapid legal advice, by reducing risks or enhancing opportunities.
Juan García Montúfar:
Probably the main difference between one role (in-house) and the other (private practitioner) is the level of commitment.
A good analogy that I heard from a founding partner of the firm I worked for in the past is the one about the bacon and eggs, where the hen is involved while the pork is committed. When you practice law the in-house counsel is committed, while the private practitioner is involved.
The consequence of this is that an in-house counsel not only needs to have a clear understanding of the legal matters (which is expected of him), but also of the underlying business issue so that he can not only provide a legal advice, but eventually identify commercially viable solutions to a situation.
While a private practitioner is required to give a professional opinion on a matter, which could be yes or no, many times managers expect from an in-house counsel a different answer which could be “you cannot do it that way, but we can do it this other way”. It usually means going one step further.
On the one hand an in-house lawyer must have business expertise and skills wider than a private practitioner, because he is often performing business (not purely legal) tasks. A private practitioner usually must have deeper knowledge in law (or in a particular area of law) since it is a primary skill for lawyers of legal firms.
But both of them have, of course, much in common, for instance they have to be good in communication with their clients (internal or external). This is an important skill because there is not much sense to do the job well if you can not ‘sell’ it to a client. Selling does not mean cheating on the client. This means explaining to the client about the value added by legal service to a business.
In your area of expertise have there been any recent trends which have affected your practice, and what steps have the in-house team taken to respond to such changes?
In the field of patent litigation, we see that the disputes get bigger and more aggressive (more patents disputed, more jurisdictions, increase in actions like border seizures, criminal complaints and so on), and also more arbitration offers to find an overall solution. We have adjusted our team to these changes.
José Alberto Cerutti:
There is a considerable and very rapid development of the pharmaceutical industry with significant new discoveries in many therapeutic areas: extraordinarily innovative specialties are arriving to the market; the regulatory environment is also changing fast; the access to market, health-economics and the competition at all levels increase the complexity of the sector. Today it is necessary to have an additional and profound knowledge of all the issues and the right balance between legal risks and business opportunities. The Law Department is conscious of the crucial importance of this correct balance and is providing legal advice timely, solution-oriented and consistent with law and ethics.
Juan García Montúfar:
As is public knowledge, the mining industry is going through a different cycle in which the prices of metals have dropped while the companies are still looking to generate value for their shareholders.
In this environment my team is working with the rest of the organisation in being more efficient in the use of all our resources and to help the business to effectively generate value.
However we should all understand that we live in times of change and although it sounds like an oxymoron, the only thing we can certainly expect is change which as Isaac Asimov put it “…is the dominant factor in society today”.
Only by having a real understanding that we need to prepare ourselves and our teams for change, is that we will be in a position to truly contribute to the successful development of the institutions we work for.
There is a clear new trend in Russia – the hiring of private practitioners through social networks or special intermediary web-sites for particular legal tasks. Legal firms are almost not involved here. Especially such an option may be useful when a client does not have any in-house lawyers in certain area of country but has to perform some legal work there. Advantages: cheaper prices when compared to law firms (at times), comparatively high speed of action. Risks: risk of working with an unknown service provider. Such risks can be partially mitigated by rankings on special websites dedicated to the hiring of individuals.