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Presentation summary

Kicking off the webinar’s “best practice” presentations, Geoffrey Timms, Group General Counsel, Legal & General Group Plc offered three key ideas.

The first (10:42) was that the chief legal officer can sometimes take advantage of their reputation for financial illiteracy, when assisting with the risk assessment of potential new products or services. He suggested that one of the possible causes of the credit crunch was that many of those who were supposed to oversee exotic financial products actually did not understand them – the products were simply too complex. As a result, it was impossible to assess what risks such products could expose an organisation too. 

However, by asking some “stupid questions”, and admitting they did not understand a proposed offering, in-house lawyers could articulate what others in their organisation were often thinking – but were embarrassed to admit. In theory, this would lead to greater scrutiny of the viability of what was being proposed.

Mr Timms’ second recommendation (13:00) was that counsel should not avoid delivering difficult messages, when required. While it was often understandable for line managers not to report bad news up the line to their superiors, Mr Timms say it was the role of in-house lawyer to offer a more objective assessment of a particular situation. He said that corporate counsel should “manage expectations”, and also help avoid executives from “being surprised”. As a group, he said that in-house lawyers knew how to “craft words”, and “put them powerfully” – both internally, and externally.

For his third recommendation, Mr Timms reminded the webinar’s audience that in-house lawyers played a vital role as a “trusted advisor” (14:45). That is, someone who people could turn for impartial – and confidential – advice. In some situations, that may simply involve acting as an informal sounding board. In others, counsel may decide to develop informal benchmarks of acceptable industry behaviour, by seeking confidential guidance from their peers.

Rounding off his presentation, (19:00) Mr Timms said that in-house lawyers should always be attuned to their company’s current priorities, and act accordingly. In addition, he suggested that some high level strategies or policies were not always “cascaded” down the company hierarchy. But, because counsel assisted many different parts of the business, they could help communicate such messages throughout the company.

As a quid pro quo, all levels of the company should be prepared to turn to the legal function for advice; on the understanding they would receive a fair and professional hearing. In some situations, the legal function may not be able to give them the answers they might hope to hear – but, if delivered honestly, this advice would be respected.

Delivering her presentation, Hélèna Samaha, General Counsel EMEA, AlixPartners, (28:00), said one of most obvious lessons learned to be learned from the recent financial crisis was that in-house lawyers should use “common sense” when identifying risk. Checks and balances within organisations were essential, she said, in order to allow for sensible reviews of new proposals.

Ms Samaha also agreed with Mr Timm’s suggestion that in-house lawyers should not be afraid of asking “stupid questions” about proposed products and services (32:00) – joking that she did so on a more or less weekly basis. By taking this approach, “You can challenge people in a constructive way,” she said.

Delivering the final presentation, Jeffrey Carr, Vice President, General Counsel & Secretary, FMC Technologies Inc, revealed that the total legal spend with in his organisation had remained broadly flat in recent years – even though overall corporate revenues had increased. This relative cost saving had been achieved – despite the rising costs of legal services generally – by changing the way that the legal department ran its own affairs, he explained.

In general, Mr Carr said it was his preferred approach to keep as much legal work as possible in-house (46:00), on the basis that employed lawyers cost much less than their external equivalents. Where external counsel were used, he said, he expected virtually all of them to work on a “performance-based” payment scheme (48:00). He also revealed that his company made extensive use of technology to help keep costs down, such as internal matter management systems and web-based legal knowledge tools.

However, Mr Carr’s main message related to how in-house legal departments could become more efficient. Specifically, he suggested that in-house counsel should engage in “lessons learned” at the end of every matter.  “You should first plan to do something, then manage it, and then review and learn from it,” he recommended.  Any in-house legal department that was not already following this approach, he suggested, should take advantage of the recent financial crisis to introduce such a scheme. Following a crisis, people tend to be more open to new methods of working or thinking.

If a particular matter or procedure had been handled well by the legal department, Mr Carr explained, where possible, it should be documented, and incorporated into future procedures. Likewise, where matters did not go as planned, any problems encountered were also documented, to ensure they did not happen again. Once lessons have been learned, the whole department should then “move on”, and avoid engaging in any unproductive incriminations. While accepting that many lawyers might not enjoy reviewing their actions in the cold light of day, Mr Carr said it was something they would just  have to “get over”.

For any in-house legal department considering introducing such a scheme, Mr Carr said the head of the legal function should always lead by example – by outlining how they, personally, could have performed better during a particular matter. It also helped if existing systems were adapted to make a lessons learned review mandatory. For example, Mr Carr revealed that his department’s matter management software would not allow a matter to be closed, until a “lessons learned” summary had been submitted to it (50:00).

In concluding the webinar, Derek Benton, Director, International Operations, LexisNexis Martindale-Hubbell, thanked the speakers and viewers for their insights (55:00). He then encouraged interested participants to continue the debate of the webinar’s theme on the Martindale-Hubbell Connected forum. Martindale-Hubbell Connected, he explained, is the new online networking facility for private practice and in-house lawyers.