Articles Posted in Clients

Far from the truth is it that in-house lawyers can just relax and let the work flow in. When you are in-house and only have one customer (business unit Widget or function HR) who can freeze you out or not come to you or turn to outside counsel, “marketing” means your paycheck.

Marketing – getting and keeping satisfied clients – matters more to an in-house lawyer than to an outside partner, who can find replacement clients. In-house lawyers do not have a monopoly, a patent, on serving captive clients (See my post of Aug. 21, 2005: trumpet your successes; Sept. 21, 2005: marketing at the firm versus managing clients of the department; April 30, 2006: myth that internal clients don’t need to market; May 10, 2006: Kraft and marketing; June 30, 2006: law department’s marketing themselves; Sept. 22, 2006: consequences of a law department marketing its services; Nov. 13, 2006: three ways to encourage clients to still use internal lawyers; June 25, 2007: expand the “surface area” of your department’s contacts with internal clients; Aug. 27, 2008: Belgian department’s priorities; and Dec. 15, 2009: ask your company’s marketing department to help your brand image.).

Of the multitude of other topics that pertain to marketing yourself internally I think of newsletters, client satisfaction surveys; status reports; and charging time back to clients. Many more management decisions by general counsel and everyone else in a legal department pertain to the constant effort to sell the services of the legal department to corporate clients.

An article in Compliance Week (July 7, 2010) by José Tabuena, SVP of governance and compliance with PhyServe Physician Services, mentions a function I have never seen. “One example of where legal and audit teams can cooperate is in financial statement disclosures. Does (or should) the company have a special litigation committee to approve high-cost legal services or pending litigation containing high-risk exposure?”

Having never heard of such a committee or role, I add this post to my brew. Who could be on such a committee? Are there such creatures as special litigation committees?

This quote, from a recent article, baffles me.

“Auditors should be familiar with control criteria involving the legal department under the

COSO framework. For example, to test the implementation and effectiveness of the control environment, auditors can compile a list of significant instances of misconduct that occurred in recent years, and then review board or committee minutes and reports to determine whether directors and executive management were apprised of such misconduct in a timely manner. Auditors can also review the minutes to see whether the board or committee followed up on allegations of a breach in internal controls, such as ordering special investigations, hiring outside advisers, requesting follow-up reports, and so forth.”

A French consultant, Hélène Trink, teamed with the legal search firm Equiteam to survey French legal departments. They obtained responses from 81 general counsel (Directeurs juridiques) in the fall of 2009.

Surprisingly, a bit more than half of the respondents said that their 2009 budget had increased. Asked to explain why the legal budget had gone up, they selected four principal explanations. The most commonly chosen was new litigation (nouveaux contentieux, 43% selected) followed by external crisis (operation de croissance externe, 29%) and more responsibilities assigned to the general counsel (perimeter de la Direction juridique elargi en 2009, 20%). General counsel everywhere would nod in agreement. They might have more to spend if something blows up, if plaintiffs take up arms, or if the scope of their charge increases.

A French consultant, Hélène Trink, teamed with the legal search firm Equiteam to survey French legal departments. They obtained responses from 81 general counsel (Directeurs juridiques) in the fall of 2009.

Surprisingly, a bit more than half of the respondents said that their 2009 budget had increased. Asked to explain why the legal budget had gone up, they selected four principal explanations. The most commonly chosen was new litigation (nouveaux contentieux, 43% selected) followed by external crisis (operation de croissance externe, 29%) and more responsibilities assigned to the general counsel (perimeter de la Direction juridique elargi en 2009, 20%). General counsel everywhere would nod in agreement. They might have more to spend if something blows up, if plaintiffs take up arms, or if the scope of their charge increases.

David Bleich, the general counsel of Ford Motor, made many excellent points during a panel at the SuperConference. One of his statements was about how very important it is for a general counsel to be “an advocate for the role of the law department.” Build respect throughout the organization for the lawyers and what they bring to the table.

Bleich’s goal sounds trite: improve perceptions about the value of the in-house legal group. But as a management fundamental for the top lawyer, the legal department’s ambassador, its potency is obvious.

Jeff Carr, the general counsel of FMC Technologies, held forth on a panel at the SuperConference yesterday. In the context of billing arrangements by law firms other than hourly billing (and discounted hourly rates), Carr speculated out loud.

He wondered whether a general counsel who has not actively explored and tested some of the performance-based payment methods might be derelict in the obligation that executive has to steward the company’s funds and resources. Might there be a breach of fiduciary duty to the company, he asked the audience?

Seeking authoritative guidance of what this might mean, I found US Legal.

Baidu, the Internet colossus of China, boasts a team of 16 corporate lawyers, including two in Japan, who counsel the $625 million revenue company. An article in Corp. Counsel, May 2010 at 68, includes these facts in its profile of Victor Liang, the company’s general counsel. What struck me, however, was that the reporter commented more generally on the role of legal departments in China.

He wrote “However, private Chinese companies often either dispense with in-house lawyers altogether, or relegate them to minor tasks.” That dismissive comment followed a sentence to the effect that China’s large State Owned Enterprises (SEOs) “are by their nature hierarchical and bureaucratic.” It is not clear whether that means to him that they have large and officious legal teams, compared to private companies that eschew them.

Someone has estimated that there may be 50,000 in-house counsel in China (See my post of Oct. 19, 2005 #2: in-house lawyers in China estimated at 50,000.). I have written before about law departments of Chinese companies (See my post of July 30, 2005: measuring legal risks and spend benchmarks in China; Aug. 14, 2005: the vagueness of the terms; Aug. 26, 2005: Aug. 4, 2007: BYD Co. and litigation; and June 13, 2006: Haier hires firms first, then specific lawyers; July 30, 2006: metrics on the spending of Chinese law departments; April 27, 2008: law departments of Chinese companies, including Haier, Huawei, and Lenovo; Dec. 11, 2008: Synnex; and Jan. 25, 2010: article by in-house lawyer in China.).

For all but a tiny handful of enormous legal departments, a newsletter leaves a musty, old-fashioned impression. The same material put on an intranet may be somewhat more acceptable, but even then whatever effort the publishing requires may be wasted.

But, stop the presses! The ACC Docket, March 2010 at 32, exhorts: “Do not hesitate to write articles in the company newsletter to sensitize your clients on important legal issues.” Ah, if the company carries the load and someone in the legal department only has to write the column, that is a different and more palatable matter (See my post of July 20, 2009: newsletters by legal departments with 6 references.).