THE BALANCE BETWEEN PROVIDING COUNSEL AND AIDING THE CULTIVATION OF BUSINESS — A VIEW FROM THE TRENCHES

THE BALANCE BETWEEN PROVIDING COUNSEL AND AIDING THE CULTIVATION OF BUSINESS — A VIEW FROM THE TRENCHES

 

By: Kathy A. Metzger

 

I have practiced law for thirty-two years. I spent the first sixteen years as a litigator and last sixteen years as Vice President and Corporate Counsel for a food company with multiple affiliates and operations around the globe.  Our legal department consists of thirteen lawyers of which five hold company officer positions.  We are basically split into three primary areas of coverage: (1) litigation, (2) real estate, and (3) commercial/corporate matters.  The commercial/corporate legal team provides legal services for each of our multiple affiliates and every department therein.  We are jacks of all trades and masters of some.  To those of which we are masters of none, we outsource.

 

As an in-house legal department to a global enterprise, our mission is to provide effective and proactive legal services, while serving as both lawyers and members of the business team. We must enable the company to achieve its objectives in a legal and ethical manner and protect the company’s legal rights and reputation. We are the conscience of the company.  We possess broad knowledge of the business strategies, issues and policies of the company and at times, serve as the most reliable institutional memory in the company. We are the station into which all trains pull, putting us in the unique position of knowing the routes of the inbound and outbound traffic, thereby avoiding collisions.  As our company is privately held, we are also stewards of our ownership’s assets and reputation and are charged with protecting both to the fullest extent possible. Lastly, and perhaps most importantly, we help people think things through.

 

At times, it is a challenge to find the proper balance between working to support business goals, acting as the control function for the company, and wearing the hats of both company lawyer and business team member.  Sometimes business teams want the legal department to make a business decision, yet at other times, challenge advice if they perceive it to be beyond legal in nature. In those instances, the business team is reminded that the role of the legal department in a privately held company (particularly for those legal department members who are also company officers) is not limited to providing legal advice, but extends to acting on behalf of the ownership and carrying out their directives and achieving their goals accordingly.

 

It is important for each member of an in-house legal department to recognize that (1) a company’s goal is to sell its products or services at a profit and (2) the business team wants to achieve this goal promptly, while avoiding any obstacles. Any business’s highest and best purpose is to profitably sell its products or services, not to have the best contract on the face of the planet. Yet, in-house counsel can lose sight of that.  As lawyers, it is easy to find risk in just about everything.  However, the role of in-house counsel is not to identify every potential risk, no matter how remote.  Its job is not to jeopardize operations by arguing over a minor contract clause that likely would have little impact on the business regardless of whether or not the clause was included in the contract.  Its job is to notify the business team of credible risks, advise them as to the probability of the risk occurring, and advise them of the financial impact to the business should the risk occur.  The lawyer may not necessarily agree with the particular decision, but as long as there is a reasonable basis for the business team’s desired action and it is consistent with owners’ directives, the decision should be left to the client.

 

By delivering quality legal advice in an efficient manner, the in-house legal department adds value to the business of the corporation.  Although an in-house legal department is not a “profit center” and does not generate revenue, it does have a positive impact on the company’s bottom line. Certainly, if the services of the legal department were instead provided by outside counsel, the expense to the company would triple if not quadruple. However, more significantly, the biggest impact an in-house legal department makes on a company’s bottom line is, putting it simply, disaster avoidance.  In-house counsel must be proactive daily in recognizing situations that could go awry, putting in place proper control policies and procedures and taking other such steps to make sure that all inbound and outbound trains do not veer off the tracks. While it may be difficult to quantify the expense of a potential disaster, one may look to other companies that have experienced such avoidable disasters for an approximation.

 

Being an effective in-house counsel requires a few things. First and foremost, the lawyer must be very knowledgeable about all aspects of the business’s operations and have an excellent understanding of the products or services its employer sells. The lawyer needs to approach each project with a “can do” attitude.  An effective in-house counsel also needs to be efficient and communicative with the client. She should let the client know when he or she can expect a response. The lawyer should not pontificate or be pedantic, but instead, explain to the client in plain words the genuine issues inherent in the matter under review.  Lastly, an effective in-house counsel needs to be a human being – a few minutes of asking her colleague about his vacation or telling her colleague a little something about herself can help facilitate a positive and trusting working relationship.

 

New graduates interested in pursuing an in-house position should determine what focus they would like to have in an organization’s legal department – litigation, real estate, commerce – and then work to get a few years of experience practicing law in that area. Typically, opportunities for new graduates to start as in-house legal counsel are limited as in-house legal departments are spread very thin with little time to mentor new graduates.  However, as businesses continue to expand internationally and in the online sector, the role of in-house counsel will continue to expand. This will require in-house counsel to be savvy with not only many areas of the law beyond the lawyer’s home country, but also with many newly developing areas of the law.  This, coupled with continually rising fees of outside counsel, will likely result in companies expanding their in-house presence, which could increase the opportunities for young lawyers to fill jobs in those departments.  New graduates may wish to consult the Association of Corporate Counsel (http://jobline.acc.com/jobs) for a list of in-house attorney positions.

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