Opening up the house

Susan Ward believes that after the introduction of the Bar Council's new code of conduct rules for barristers, greater opportunities for in-house counsel will see companies reviewing their in-house legal requirements. Susan Ward is senior vice chairman of the Bar Association for Commerce Finance and Industry.

On 11 December, the Bar Council made significant and historic changes to the code of conduct for the bar. These changes resulted from the Access to Justice Act passed by Parliament earlier this year. At last, a clear path has been laid for employed barristers in industry, the Crown Prosecution Service and public service, to obtain full rights of audience when representing their employers. And soon, barristers employed by firms of solicitors will also be able to represent their firms' clients in the higher courts.

There is still some way to go before full modernisation of legal services is achieved. But now that the first bridge has been crossed, the future looks much brighter for consumers. Not only are rights of audience being extended, but the Bar Council is taking steps to give employed barristers rights to conduct litigation. Another exciting development is the birth of BarDirect, which will open up more avenues to industry for direct instructions to barristers in independent practice.

As a result of these innovations, employers in industry should now take time to review their in-house legal requirements and resources. In the past there was little point in resourcing the legal department with a view to carrying out litigation in-house - it simply was not possible to do it all in-house, no matter how big the department was. Once the litigation arrived in the higher courts, the rules would not allow anyone other than a barrister in independent practice to conduct the advocacy. But it is now possible for the in-house barrister to offer a new range of services to internal clients and for litigation to be handled fully within the in-house legal department.

Only the largest will choose to resource themselves to this extent. But even smaller companies will spot opportunities to make savings in their legal budget. Businesses with a significant and active intellectual property portfolio might well see the advantages of utilising in-house counsel to protect their rights.

Employed advocates have a detailed knowledge of the business and the products, and savings can be made in avoiding instructing and briefing external lawyers every time trouble starts. Companies with significant amounts of debt recovery work will appreciate the possibilities of running this in-house with a small team of litigators who have rights of audience and rights to conduct litigation.

Above all, savings can be made, even for the smaller companies with a modest amount of litigation, in having the capacity to handle short matters and interlocutory applications internally. Many in-house counsel have commented on the frustrations of instructing a junior counsel to support a silk when the in-house counsel would be by far the most appropriate person to fulfil that role.

Another exciting development is the growth of alternative dispute resolution methods. The use of skilled arbitrators or mediators to avoid the hefty costs of litigation not only results in considerable financial savings but also reduces the risk of losing client or supplier goodwill. Internal clients often favour the less formal atmosphere of arbitration or mediation. In-house lawyers can benefit from undergoing mediation and arbitration training too. The skills learned can be useful in dealing with internal disputes between departments, and in advising how to handle and avoid potential discrimination issues which sometimes arise.

Many possibilities are opening up for in-house legal departments. But in order to feel the real benefit it will be necessary for each department to review its current staff profile and its requirements for external legal services. There are opportunities within easy reach of in-house legal departments, and companies should not ignore them.