觀點 | 06-07-20

Going In-house: Beyond Lawyering

Based on the article, Going In-house: A Changing Marketplace, first published in Legal Business World - 2020 here. SSQ’s expert APAC Senior Adviser Kenneth Tung explores the dynamic in-house market in the third of a series of articles. The first three editions are in SSQ’s publications archive here.

 

Taking It To the Next Level – Beyond Lawyering

First, lawyers do not go in-house to practice law, and this is a nuance that is definitional.  Lawyers’ core competence may be to navigate the law, spot issues, and marshal the evidence to generate solutions to legal problems, but businesses hire lawyers in-house to advance their purposes and not merely to practice law.  The lawyering skills may form the vertical pillar of a T-shape lawyer [1] but without the horizontal skills and intent, an in-house lawyer would not really be “in-house” and a member of an integrated “pit-stop” [2] team.

 

Being a corporate counsel surely goes beyond spotting issues and ending with equivocal, difficult-to-comprehend, client-you-decide recommendations.  Solving and anticipating problems are the goods of trade, and resorting to laws [3] may be one way to do so. More often than not, the solutions are not legal in nature, and the legal department should, albeit ironically, “do less law.” [4] This may be against the visceral instinct or purpose of the legal vertical which often ends up over-lawyering an issue, from long winded memos to going down sub-optimizing rabbit holes and missing the bigger picture in the problem solutions.

 

Going in-house pivots the drivers of value proposition from inputs to throughputs and outputs.  In other words, the reform concerns a shift from the overt hourly pricing and shadow cost accounting in terms of headcount and fulltime equivalents (FTEs) [5] to measurements on being an active corporate resource in shaping and executing an organization’s strategy, i.e., its reason of existence.  Hence the legal function aspires to be a strategic function, beyond just another cost center.

 

The word strategy, too often, has been thrown around and may indeed have been used in vain.  It is not limited to minimizing risk, whether in bet-the-farm transactions, routine contract reviews or existential dispute resolutions and regulatory threats.  

 

B. The Problem With “Make Me Look Good”

Many would have come across this innocuous ask from the GC when she engages outside counsel or assigns a staff lawyer to work directly with a business client.  Sometime the corporate counsel needs expertise that is not available in-house, and sometimes it reflects a critical need in the face of an over-extended in-house resources.  If this mind frame in providing legal services is the norm rather than the exception, some client may indeed ask: why hire the in-house lawyer or why not replace the in-house or more senior generalist by the outside specialist or junior lawyer.

This illustrates why if the purpose of an in-house counsel is merely to lawyer a problem, then the “rise” of the in-house lawyer may just be a cost arbitrage exercise.

One way to think of this is to revisit the concept of the T-shaped lawyer.  The purpose of the in-house lawyer should require the horizontal competence to be so strong and critical to the enterprise that it is symbiotic with the legal vertical.  This is so much so that the “T” may be better described as an “H” tilted on its side, with the legal generalist connecting the range of business organizations goals and activities on the top and the range of legal resources spread, across the people-process-technology spectrum, at the bottom.  Even within this job description, the in-house lawyer can declare majors and minors that best serve the strategy of the business and the legal department as opposed being the equivalent of a Swiss army knife.

 

 

 

The 21st-century T-shaped Lawyer, R.A. Smathers, ABA Law Practice Magazine, Vol.40, No.4 (2014).

9 Lessons Product Teams Can Learn From Formula 1 Pit Stops, R. Seamons, Hackernoon, Jun. 28, 2018.

3 Contracts too generally stipulate rules between and among parties.  Many a clause in agreements save the day in negotiations, but many just deal with short term consideration and “kick the can down the road” without enhancing clarity and addressing issues and solutions.  Worse, some lawyers actually play with words that misrepresent the nuance of the rules and manipulate a risk profile that satisfy only the short term needs of stakeholders without accurately pricing the pros and cons in context of available options.  Some merely act for the interest of one or few stakeholders but at the expense of the organizations.

Do Less Law – A Taxonomy of Ideas, R. Friedmann, Prism Legal, Jan. 19 2016.

Org chart, the reason for existence?, K. Tung, Jul. 2019.