In-house: where the buck stops

I moved from the corporate department of a large City firm to a general counsel role at a FTSE 250 financial services company. I did not go in completely ignorant of the changes that would come with the switch – although it was my first in-house job, I had experience from a secondment at the new employer, plus a lot of advice from peers on both sides of the fence. But the change was even greater than I anticipated.

The thing that really brought the difference home to me was the first time I was asked by the chief financial officer ‘what should we do?’. I gave him a concise but compelling legal answer, setting out his options and referring to relevant parts of the law. He listened, nodded and then asked: ‘OK, but what should we actually do?’.

Instead of advice, what the situation needed was a recommendation, even a decision; and one that was based not just on the legal situation but on the commercial importance of the project. All good private practice lawyers face this situation, indeed I had a hundred times; but this was the first time my word would effectively be the last word. And not just to one client among many – in private practice, I had built close working relationships with a number of clients over a period of several years, and I liked to think that they trusted my advice.

But in this case, I was actually going to be employed by the company, hopefully for a number of years, and live with this every day if it was wrong. It was a real decision to be made that would affect ‘us’ on an ongoing basis. There was not another lawyer in the next office to talk it over with, or a more specialist partner to email. It was just me and I had to give the right recommendation to inform the decision. So I did.

General counsel as decision-maker

I quite enjoyed the feeling; I do not think one could exist for long in a general counsel role if one didn’t. The scene has been replicated many times since, with different participants in the discussion and materiality of subject matter, but the one constant I find as a general counsel is the need to make decisions in the best interest of the company on a long-term basis. 

This is not just a legal consideration. Where contracts, statutes or precedents can be interpreted in a variety of ways, there is a compelling need to balance legal risk with business needs. All private practice lawyers are encouraged to think commercially, but working in-house gives one an appreciation of what that really means. On more than one occasion, I have seen colleagues with their hands tied by an overly cautious approach from external counsel, and seeing this really makes one understand why lawyers can get a reputation for lack of pragmatism.

Being in a decision-making role can be very challenging on occasion. Telling an enthusiastic staff member that we cannot take the regulatory risk to do their project needs careful and clear communication, and the ability to make people see the legal downside as well as the commercial case. 

However, I learned a valuable lesson early in my time in-house. In a desire to get a good commercial outcome for the company, I gave a fairly bullish reading to a clause in a contract we were disputing with a supplier. Later, calmer reflection made me realise we were probably on slightly shakier ground than I had intimated, but by then the horse had bolted. A strong negotiating stance and some other, better considered, legal points meant we ended up with a satisfactory outcome, but the temporary feeling of having overplayed my hand was not a pleasant one. The ability to find a way to say ‘no’ or explain to colleagues why the company’s position is not as they hoped is a crucial one for senior in-house counsel. I am glad to have learned that lesson early. 

The scope of decision-making can be surprising at times. In the last three years, I have advised on everything from refinancing worth several hundred million pounds to the contract with the event organiser for the office Christmas party – and at all levels of materiality in between. I am primarily a corporate and commercial lawyer by experience, but being the general counsel requires the ability to fairly quickly absorb at least the key aspects of new areas of law (and, for those operating in multinationals, new jurisdictions). One needs to be able to consider and advise on whatever issues the company faces, and (other than for those who work in a very large company) there is unlikely to be a specialist lawyer who can be brought in.

Reaching out to specialist external counsel is an option of course, but this needs to be done in a way that allows the answer to be translated to the situation at hand quickly. A surprisingly large part of the role is adapting this advice to what faces you. The wide variety of questions that come through my office door each day has been one of the most unexpected aspects of a move in-house, but is also one of the most refreshing. This variety does present another challenge – that of colleagues who want things to be ‘signed off by legal’, whether or not they really have much to do with the team. Although this can be frustrating at times, I encourage my team to be open and responsive to these requests. I would rather that we are involved too much, and sometimes unnecessarily, than too little and have to pick up the pieces later.

Work-life balance – myth or reality?

For many people, a perceived attraction of moving to an in-house role from private practice is the fabled chance to improve ‘work-life balance’. A common theme among hard-billing associates at City law firms is how much more work they do than anyone else, mainly based on how late they stay in the office. The longer hours are certainly true, but this narrative can overlook the fact that most people at my current organisation are in early and have clocked up a couple of hours of work at about the time many private practice lawyers are picking up their coffee on the way in from the tube. I find myself in the office for fewer hours, but actually working in a more focused and efficient way than previously.

I have come to realise that the culture of law firms, and in particular the billable hours model, can drive inefficiency (especially at associate level) and increase the number of hours spent in the office without real need. This is not always the case – private practice lawyers do often work very hard and for long hours, and I do not miss that side of it. However, I have certainly noticed an improvement in my own performance, job satisfaction and work-life balance from working in-house.

While I have greatly enjoyed the transition, I know from peers and former colleagues in other industry roles that this is not always the case. I have been lucky enough to come into a general counsel role with interesting and varied work. However, many in-house legal teams are small, with little hope for internal promotion, and deal with standard issues day to day, while much of the interesting work is farmed out to external counsel. Anybody looking to make the leap should consider very carefully what their career development will be from the point of moving, and should be aware that it is a constant challenge for general counsel to make sure one’s team members develop well and have the right opportunities (even if this means supporting them to apply for jobs elsewhere in due course).

Relationships

Working in a smaller team without a great deal of legal resource is also something former private practice lawyers may find hard to get used to. The likes of Shell or General Electric employ large legal teams, but many companies do not. I rather miss having a wide variety of qualified lawyers around – peers to bounce things off, those more senior to give advice, the opportunity to mentor juniors, and a range of professional support lawyers and specialists on hand for when things have gone beyond your immediate expertise. The training opportunities and systems of a large firm are also rather taken for granted until one does not have them.

Of course, any sensible general counsel will make it a priority to cultivate relationships with their panel firms to provide at least a close substitute – someone you can call to ‘sanity-check’ your query. But it is not quite the same. I sense this feeling in others who have recently departed private practice. We are the ones who attend training breakfasts and seminars at City firms, trying to ensure that our knowledge does not fall behind and that we have the same breadth of network that we used to.

Partners of law firms are, of course, always keen to help, but that can come at a price. I have found it incredibly helpful through various initiatives to start to build a network with other general counsel, who understand the challenges of the role. The Law Society’s General Counsel 350 (GC350) engagement programme has been particularly helpful, and I would encourage all in-house lawyers to find out about this and similar groups. It is definitely not as easy to pick up knowledge and connections in-house compared with private practice, but a small amount of effort can have very useful results.

Improving the landscape

There are two things I think would improve the landscape for those of us in-house.

The first is an increase in communication between members of the in-house community. Confidentiality is obviously paramount, but with the right peer group of senior in-house lawyers I have found, time and again, that we face many similar challenges. Greater collaboration and cohesiveness as a body can only help the general counsel community, whether by making it easy for talented people to find the right roles or by sharing issues and solutions (under the Chatham House Rule, of course).

The second is in terms of law firm relationships. The most impressive firms seek to understand the business and work out where they can really add value, rather than continually attempt to cross-sell to areas where we do not need their help. Firms moving towards a model of relationship teams would be very useful. Having the same lawyers who already understand the company involved the next time we give an instruction saves the need for (and cost of) rebriefing.

I also wonder if there is more scope for value-based billing. Often the support from an external lawyer can save a fortune in time and effort, whether it took five hours or 50, and should be appropriately rewarded. Similarly, paying for a unit of time every time I make a quick phone call to confirm my understanding of a particular clause rather misses the point of the relationship we are trying to create. Firms want to grow a relationship as trusted advisers. Understanding that they care about your business as well as their billing is a great way to increase this trust.

Advice for the new general counsel

To others seeking a move to a general counsel role, my key piece of advice is to be ready to make decisions. Not necessarily at the drop of a hat – they need to be considered and with appropriate push-back, but the option of deferring to others after presenting the pros and cons of a debate is much less available than when in private practice.

I think the other very necessary character trait is flexibility. Whatever is important to the company at a particular moment is the most important thing to you, whether or not it is in your specialism. I would strongly recommend that those seeking a move out of private practice try a secondment first to test these character traits; they should also be very alert to how their career may progress. A move to a role below GC level may require sideways moves to enable one to progress up the ladder.

Andrew Lewis is general counsel at Intermediate Capital Group plc

• This is the latest in a series of thought leadership articles on the in-house lawyer sector. It is an edited version of a chapter in The Future of the In-House Lawyer: The General Counsel Revolution, published by The Law Society (£79).