Finding Effective Business Solutions to Complex Legal Challenges
Last week, I moderated a General Counsel Roundtable at Georgetown University’s Corporate Counsel Institute, an annual gathering attended by both in-house counsel and outside counsel from around the country. During our panel, top General Counsel from different industries addressed both the challenges they face and elaborated on some of their success stories. The underlying theme of the roundtable focused on doing more with less, more efficiently, and with a more business-oriented focus. I was joined at the event by four General Counsel, each managing their own unique law department: 1) Walter Bardenwerper, Vice President & General Counsel at Watson Wyatt Worldwide 2) Robert Bostrom, Executive Vice President & General Counsel at Freddie Mac 3) Manik Rath, Vice President & General Counsel & Corporate Secretary, Logistics Management Institute and 4) Louis Briskman, Executive Vice President and General Counsel of CBS Corporation.
Contrary to traditional perceptions, attorneys are not just involved to thwart risk and say “no” to every new idea but rather are fully engaged in the business objectives and can objectively assess potential obstacles. Manik Rath, GC at Logistics Management Institute reiterated this notion, as he made the case that in-house counsel are uniquely situated to provide strategic insights to help business units prevent problems and add value to their projects. He has his in-house counsel sit on many committees at the company, not just for legal activities but also for business purposes. He wants his attorneys to understand the core business and to bring their legal tool kit to these activities to share their thinking and perspectives with other units.
All of the participants acknowledged an ongoing emphasis on cost-savings, as their law department budgets continue to shrink. To address this reality, Robert Bostrom at Freddie Mac has responded by bringing more work in-house and by reallocating budget to hire contract attorneys in certain instances. In leveraging its relationship with its outside counsel, one of Freddie Mac’s law firm’s has seconded three attorneys, on salary from the firm, to work on-site at Freddie Mac at no charge to the client as a way of remaining experts in the client’s business even during a downturn. This farsighted approach provides Freddie Mac with a cost saving service while the outside counsel gains knowledge and understanding of the clients business that should bring future benefits to the firm as well as the client should the economy and client’s budget improve.
Walter Bardenwerper, like many GCs, has taken a fresh approach to Watson Wyatt’s relationship with outside counsel. His law department has started to look to mid-tier and smaller markets for counsel instead of going to the traditionally more expensive firms located in big cities. Often partners in smaller offices can perform the work needed at almost half the price, with just as much expertise. In addition to the search for quality less expensive legal services, the panel agreed that alternative billing is a consideration but as Lou Briskman (from CBS) said, there is no one-size-fits all for outside legal work.
To search for outside counsel, ACC’s Value Index, a tool for in-house counsel to review law firms and share evaluations, was mentioned as one method. Other methods mentioned to find a good outside firm are at conferences, where speakers demonstrate their expertise and through referrals and word-of-mouth.
Finally, one of the most effective tools these GCs found in terms of law department success was educating others in their own company about the metrics of success coming from the legal department. While in the past, preventing legal action has been a challenging benefit to quantify, GCs are now taking the time to collect data to promote their department in terms of proactive business contributions. When Robert Bostrom was asked by a key executive, “What are all of these lawyers doing?,” he instigated a quarterly report presenting specific data on his legal staff’s results – such as number of loans completed, number of board meetings attended, number of documents produced – all of which helped his executives see in hard metrics what they had accomplished. This type of proactive reporting out was embraced by all four participants.
My own takeaway from this discussion is that in-house counsel, now more than ever need to adopt a business approach to their legal work. They must proactively represent themselves -- their business as well as legal acumen -- within their own companies. In this way, even under the constraints of increasing workload with a reduced budget, they will become true strategic partners with their in-house colleagues and outside firms and will be well-positioned to succeed regardless of when the global economy rebounds.
