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The evolving role of legal counsel

The role of a legal counsel is no longer limited to managing the legal risk associated with the business that they work within.

Effective legal counsels now need to partner with the business, understand its issues and produce viable and tangible solutions.

What are the current challenges facing in-house legal teams?

Managing legal risk

There can be a tendency within some organisations for business units to transfer risk to their in-house legal teams by encouraging or placing pressure on the general counsel (GC) to make commercial decisions. The role of in-house legal counsel is to understand the pressure points, strategy and objectives of the business and effectively communicate the risks and legal issues involved in any decision to management. This enables management to make informed strategic choices within an acceptable legal risk profile.

Managing efficiency when the bottom line is what matters

Responding to increased pressure on legal costs whilst managing risk requires a deep understanding of what drives the cost base and influences the profit line of the business. In-house legal counsel need to proactively initiate proposals for cost reduction and identify appropriate benchmarks to measure efficiency. The challenge as an in house lawyer is to ensure there is an optimum balance between cost efficiency and effectiveness and to educate the business about the balance.

Transition and resource

When making the transition from private practice to an in-house role many lawyers go from a specialist background to having to perform a generalist role with responsibility for areas in which they have less experience. This, coupled with less support, fewer systems, precedents and general ‘know how’ at their disposal, presents fundamental resource challenges for in-house lawyers particularly in developing markets.

What are the opportunities facing in-house legal teams?

Strong relationships with external advisors

Relationships between external lawyers and in-house legal counsel are becoming increasingly important. The successful appointment of a panel of preferred legal advisors and the development of close working relationship with those firms can be a significant opportunity for in-house legal teams and can help save both time and money.

How can in-house counsel ensure their role is valued by their business?

Demonstrating value

GCs need to be influential in the boardroom and their value needs to be recognised by the chairman, independent directors, the CFO and the CEO. GCs can add specific value by encouraging a greater understanding of non-financial risk. They should be able to provide context to every legal decision made through their knowledge of the staff and company objectives: what drives the company and understanding the pressure points.

What is added-value legal advice?

Lawyers add value to their business in a number of ways – providing a responsive service; delivering technical know-how in a way that has a transformative impact on the business; providing commercially astute advice; and contributing to developing the strategic direction of the business within the relative legal frameworks.

In-house legal counsel expertise versus commercial understanding

Lawyers who demonstrate the ability to be business ‘enablers’ and make commercially savvy decisions arguably find it easier to connect with the business teams and will be more successful in their careers. Management increasingly look to legal teams to help make strategic decisions based on both commercial and legal analysis. The ability to provide this combined advice is where GCs can really add value to a business.

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