How GCs can prove their worth and why the ‘zero sum game’ played with external firms should stop were hot topics at our recent summit in Portugal
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The Lawyer’s annual General Counsel Strategy Summit, in association with Thomson Reuters, held last month in Portugal, focused more than ever on how general counsel should measure, quantify and prove their value within their companies.
Amid jokes that in-housers should pray for crises to prove their value and that many are “too busy to think about efficiency”, the significant message emanating from all the sessions at the conference was that today’s general counsel need to get serious about reorganising their teams, harnessing technology strategically and promoting their work both internally and externally if they are to keep up with the increasing demands on their time and budgets.
A smarter model
All these themes were brought together by Ernst & Young global leader of legal services Trevor Faure, who talked to delegates about his Smarter Legal Model: More for Less theory, which posits that lawyers are behind the curve in terms of operational sophistication and integration.
Faure kicked off his ‘Modernising legal services: done by us or to us?’ session with an analysis of the general counsel job. The in-house lawyer is a “leader, statesperson, salesperson, surrogate judge, coach, conscience, best friend…” the list went on.
“Only the omniscient and omnipresent need apply,” Faure added, with only a hint of irony.
He told the audience how in-housers could increase workload without increasing cost, improve client satisfaction and reduce the traditional tension between law firms and in-house counsel.
Faure has no truck with the ‘I’m too busy for that rubbish’ approach to efficiency. His model is all about balancing the competing imperatives of workload, headcount and net cost, and combining common sense with data collection. Data collection can start on a pretty small scale, by defining a list of “essentials”, roles and responsibilities, though this might not be as easy as it sounds – it emerged that few in the audience had a list of essential work and responsibilities agreed with stakeholders.
Next up was working out how to reorganise and disaggregate the legal team. According to Faure’s model, legal tasks should be divided into core, cream and commodity work.
In the past the system might have involved going externally for complex issues and leaving in-house lawyers to do the day-to-day work, but Faure called for a paradigm shift in working methods, including in-house up-skilling, commoditisation and using technology strategically. The result is “not more for less,” said Faure, “but better for less.”
“Law firms are finding it harder to make a profit at the commodity end, so the focus is on how to get further up the chain and leave the commodity behind,” he said.
Using technology to monitor and commoditise is all well and good, said Scottish Water senior counsel Ramsay Milne, but when it comes to collecting data and logging hours, you need to know why you are doing it.
Data must add value
Leading the third plenary session on the first day along with Lloyds Banking Group corporate real estate lawyer Kumar Tewari, Milne told the audience that data had to add value to be of use to general counsel.
Scottish Water uses productivity-based management systems and the room murmured in agreement that uniform task-based management systems are increasingly on the cards, but others balked at the idea of logging hours.
Tewari posed the question: “Is it really worth collecting all this data?” and “should general counsel spend time pulling together metrics?” Yes, he said, if it meant you could use it to demonstrate your value within your company.
Milne’s view on proving value was a little more controversial.
“Pray for a mini-crisis,” he said. That way your hard work is noticed and visible without being the cause of a multimillion-pound court case.
Another hot topic was building effective relationships with external firms and internal management.
Faure talked in depth about the need to “end the zero sum game” between in-housers and external firms, whereby both go into a deal trying to score points off the other. Neither, he said, ends up a winner.
This was something Milne and Tewari also raised in their session, concluding that there is a need to bridge a gap between in-house and private practice attitudes.
External lawyers are behind the curve in understanding the challenges that in-house counsels face, they said. Tewari said the traditional lawyer mindset is being challenged by being consulted on a broad range of matters.
Private practice lawyers
Private practice lawyers also came in for criticism in a roundtable session dedicated to dispute resolution. In-housers voiced concerns about losing control of cases when they are handed over to private practice and want to go further down the direct instruction road.
Brick Court Chambers’ Harry Matovu QC suggested in-house lawyers are keen to cling on to control of their cases and have a clear vision about how that should work.
The Jackson reforms have had a major impact on how companies approach litigation work, with an increased threat of punitive costs for those who do not accept settlements or decline to mediate.
The consensus among the general counsel present was that their project management skills were better than those of external counsel, and they need to take hold of case strategy and cost budgeting.
Litigation and arbitration were also under the microscope in a stream session on international arbitration. Atos head of litigation Jonathan Stevens took those in attendance on a whistlestop tour of where to (and where not to) litigate around the world.
Avoid Mexico, he said, but despite knowing laughter around the room, that jurisdiction has crept into the top 10 most popular places to litigate.
Russia and China are also among the least popular places to litigate. And a few nightmare stories were shared about 16-year case predictions coming out of South America.
The most popular places to litigate are still the UK, the US, Paris and Switzerland, with the established London International Arbitration Centre and the International Court of Arbitration in Paris remaining favoured. But the Singapore International Arbitration Centre and Hong Kong International Arbitration Centre are the “two most well-known kids on the block” according to Stevens.
Looking to the future was the theme of a session on in-house career planning and succession.
Lockton Companies general counsel Sam Clark pointed out that more lawyers are now choosing a career in-house. Clark said that in-house teams are becoming more specialised and working more closely with the business than ever before.
But this has led to more demand and competition for talent between private practice and in-house.
“A flat team structure is no longer appropriate,” Clark told the audience.
He believes general counsel should have a business plan to ensure that there is a steady flow of people moving up the career ladder, and should ask themselves if there is someone they can develop to become a future head of legal.
“Soft skills are key,” added Clark. “How do [general counsel] interact with the business?”
At Lockton, Clark involves his junior lawyers in the recruitment process, asking them to sift through CVs with the aim of finding candidates who would be a good fit with the team.
Clark also told the audience that more in-housers should look at offering training contracts, a sentiment shared by many delegates.
He believes that any in-house team can take on a trainee, using reverse secondments to external advisers to meet the different seat requirements if need be, and that trainees are a great investment.
In-housers left the summit with plenty to think about, much knowledge shared and a distinct sense that they will have to deploy commercial nous if they are to prove the importance of their teams and maximise their resources in future.
Live tweets from the summit
“Secondments a great way of getting under skin of client’s business”#discussion #lawyersummit
How do you measure the value of legal team? Some seem to get in-house lawyers to record time!! #scary #lawyersummit
Fees greatest frustration with private practice law firms, lack of commercial awareness next #lawyersummit
Industry has changed since crisis – in-house more specialist, more collaborative. GCs are heroes of the business. #lawyersummit
Mediation: like a therapy session? Getting it all out is good for clients #lawyersummit
#lawyersummit lawyers bring skill sets to the table as a trusted #advisor as there is tension between the board and the executive committee
Quite a division in the room over whether a GC should be on the board. Some vehemently opposed to the idea, others vice versa. #lawyersummit
#lawyersummit Many general counsels are responsible for #data #protection; how will #Regulation from Brussels impact the way GCs work?
Ernst & Young says no such thing as “too busy to be efficient”. Commonsense + data is all you need! #lawyersummit
28% of people trust law firms, 29% don’t. 53% of people don’t trust banks! #lawyersummit