Articles Posted in Clients

Brian Armstrong, the progressive general counsel of Canada’s Bruce Power, was informative and candid about his efforts to demonstrate the performance and value of his department. His 200-page annual report is a compendium of nearly every metric imaginable, according to the long profile of him in CCCA Magazine, Fall 2011 at 28, including results from client satisfaction surveys.

Not surprisingly, senior management rated the department higher than lower-ranking clients. That much could be expected. But Armstrong gave numbers: an overall score of 81 by the top clients compared to a 67 by the rest. That gap of almost one-third makes the point clearly: in-house lawyers snap to much more for the officers of the company than for the non-coms. Armstrong concludes that “if we want to drive these results higher, we have to pay more attention to the other people.” That’s true mathematically, but in the real world, where resources are very finite, I would go with keeping the big chiefs smiling.

The article has lots of other good points and even a picture of this blogger. Click here for the CCCA article.

“We’re not buying pencils!” the implication being that Procurement may know how to buy trivial objects by bullying fungible providers, but sophisticated legal brains far overmatch their petty purview.

“Costs matter less than quality and results!” Procurement wants cheap; law wants brilliance and victory, and the twain can ne’er o’erlap.

“They aren’t lawyers!” so how could they possible understand the subtle mysteries of the Most Great and Noble Profession.

Paraphrased in a recent profile, the General Counsel of AOL, Julie Jacobs, “sees the role of corporate counsel as establishing trust both inside and outside the company.” She makes other points in the long piece about expectations for inside counsel, but this one made me sit back and try to figure out what she meant.

No doubt, if an executive doesn’t trust a lawyer, either for the accuracy of advice or fundamental loyalty, directness, and ethical compass, then the attorney-client relationship collapses. Essential trust missing, all is lost, but presumably such doubts arise rarely (well, execs may wonder about the sharpness of their internal lawyers but hopefully not their bona fides).

Jacobs may have said something regarding her expectations of her 50-lawyer team about respect and reliability or professional integrity, which got boiled down by the journalist to “trust.” You can decide for yourself from SuperLawyers, Bus. Ed. 2011 at 143. For everyone, your word should be your bond.

A recent book states that “when counsel does not act as counsel there are potential issues around professional indemnity insurance and whether or not the indemnity policy will respond.” The quote comes from Benny Tabalujan, ed. Leadership and Management Challenges of In-House Legal Counsel (LexisNexis Australia 2008) at 11. That poses a provocative question for which I wish there were some feedback and input (See my post of April 25, 2009: malpractice and in-house lawyers with 6 references.).

If readers can enlighten me on this subject, I would appreciate it. One part of my ignorance is how many in-house lawyers are covered by professional indemnity insurance (and, the metrics guy in me wants to know what that coverage costs and who pays for it). Another desire would be for some facts and figures about know how often the issue has arisen in recent years.

A long-time observer of the corporate legal scene in Australia, Peter Turner believes that “Maintaining professional standards and independence in an increasingly tough and unforgiving business environment is perhaps the greatest single challenge that the in-house profession will face in coming years.” Turner is the former CEO of the venerable Australian Corporate Lawyers Association (ACLA) and before that the general counsel of Fosters, so his views cannot be taken lightly. He wrote this for his chapter in Benny Tabalujan, ed. Leadership and Management Challenges of In-House Legal Counsel(LexisNexis Australia 2008) at 10.

Remaining professional as a lawyer counts significantly and poses periodic challenges, I will concede. Even so, as compared to productivity, cost, knowledge of the business, and team contribution, is independence the Achilles heel of in-side lawyers? Do outside counsel tout their supposed independence and objectivity, and make much of the employed lawyer as bending under pressure, as a significant truth or more as a marketing ploy? If business executives want pliant lawyers, why would they see stiff-necked hardliners outside as attractive?

Has anyone encountered or heard of such a strange request?

A lawyer from a fair-sized department wrote me with a strange story. The Board of Directors is looking for “compliance certificates” from each area of the Law Department. My email friend wrote that “While other parts of the Law department can sign off on a compliance certificate because it is most likely they receive every matter that falls within their purview, I as head of the commercial group have refused to sign anything regarding commercial work.

My friend explained why she couldn’t sign such a certificate. “The commercial lawyers see only a very small percentage of the contracts that the organization enters into. We have prepared a number of templates for use by other departments but these documents are not locked down, so we know that they are changed, and, as well, many contracts are entered that don’t even use one of the templates. Because we are subject to specific legislative limitations, if someone in the organization signs off on a deal using vendor paper, we will without a doubt be in breach of at least one of those limitations (respecting indemnification).”

Some legal problems left in baskets on the doorstep of a law department come from the corporate compliance line. Hotlines, as they are called, generate some wheat for lawyers but mostly chaff. This post offers some snippets I have gathered about help lines.

From a small sample of experience, it seems that many calls are trivial. For example, a large chunk allege favoritism. Relatively small numbers of calls come; at one company they averaged 3-7 per month. Most of the services that handle calls use a template to gather the facts and allegations. One company added a step for themselves, to code each item afterward: “was this a valid complaint?”, and estimated that only half were valid.

Callers can remain anonymous at all companies and some 90 percent or so choose anonymity. If anonymous they get a call back number and call within a week or two to hear what was done. While on the call the person will tell you what to call and when. Some companies create a website to let someone fill in the same information they would have been asked for by a person

Two of the in-house lawyers profiled in the Columbia L. School Mag., Summer 2011 at 28, singled out the explosion of intellectual property issues. You could say that being a lawyer for Warner Music Group and the Jacksonville Jaguars football team would obviously entail extensive intellectual property rights. True, but they both stressed the spiraling amount, prominence, and complexity of those issues. They and many other in-house lawyers want to maximize the value of the intellectual capital and property owned by their companies and that campaign has taken on more prominence.

Global commerce and the internet, cited frequently as forces that have compounded legal needs and complexity, both link closely to IP rights. As trade spreads you have to be more protective in more areas; as technology untethers physical products to online domains (and abuses), IP advice takes on ever more importance. IP as a strategic tool looks set to soak up increasing amounts of law department time.

An article packed with sound advice gracefully written cautions in-house lawyers to call meetings with their clients judiciously. Writing in ACC Docket, Nov. 2010 at 82, the authors urge you to have a clear purpose “and not be overly long (you should generally not schedule a meeting longer than 30 minutes.). Meetings tend to expand to fill the available time, so this is good advice.

This reminds me of analogous advice about brevity. Keep memos short; stop loquacity in e-mails, prune PowerPoint decks; and give clear, crisp answers. Smaller is better.

The law department looks to reduce its budget or headcount by shifting some tasks back to clients, such as minor contracts, administrative help (terminate a secretary in a remote office and have the lawyer there double up on a business unit secretary), review of some marketing material, IT support, etc.). At the same time, a business unit or staff function that has to cut back wants to terminate a contract administrator who had helped the law department, cut back on preventive law training, reduce anti-counterfeiting efforts, or have sales people request contract reviews prematurely.

Both sides want to slough off on the other some of their former obligations. Unlike me to have no opinion, but I do not have any overall sense how the back and forth transfer of costs or work nets out.