When it comes to choosing external firms, within this sector no clear guidelines have yet emerged. But globalisation, consolidation and the dotcom effect – which is steering much investment away from the traditional industries – all play an important part in the decision making.
Geographical location, word-of-mouth reputation, cost, competence and long-term loyalty through repeat business are high on the in-house lawyer’s priority list. The use of big City names is mostly limited to major projects.
Due to globalisation, foreign firms are used in cases where a local understanding of a country’s law is essential. For example, Eurotunnel uses UKand French bilingual lawyers either side of the Channel, while coach company National Express calls on Swedish lawyers to advise on its Scandinavian interests.
Even at a regional level, there is often a need for a widely scattered panel. Railtrack, for example, has appointed lawyers throughout the UK to make sure that wherever and whenever they are needed, suitable lawyers are always within easy reach.
But that is not to say that every company outsources all work. An insider understanding of a company and its competitors’ activities is highly valued in this industry and the in-house counsel’s skills are viewed as invaluable.