In-House Counsel: Best Practices

In-House Counsel: Trusted Advisors

Corporate lawyers are often portrayed as professionals whose function is solely to evaluate risk and often restrain businesses from actions that may enable their growth and creativity. Yet this is decidedly not the role of an in-house lawyer. Rather, a lawyer who goes in-house is an expert in their business. They can provide their colleagues with the benefit of valuable, specialist knowledge to propel the business forward and produce success. 

The Role of General Counsel

General counsel is at once a primary member of a corporation’s senior management team, yet their role, by its very legal nature, demands an element of caution that their colleagues lack in their approach. Yet it is their colleagues and superiors; the company’s CEO and the board of directors, who will routinely request both their legal and business advice. It might even be asserted that they will be reliant on the guidance of the in-house lawyer in major business matters. In this increasingly fast and complex age of globalization, in-house counsel must have the ability to provide practical yet intellectually sophisticated advice in response to a huge variety of issues, often under great pressure. 

There are great benefits for companies in having counsel on their team, rather than consulting an outside lawyer. There’s no one who knows the business better than one who works in it every day, and over the course of the past few years, the role has increasingly become a vital one to business management teams, with their presence having been proven to result in more accurate business forecasts, as well as massively reducing legal risk.

A skilled and knowledgeable in-house lawyer is, therefore, a huge benefit to a management team. However, just like business, whatever the sector, the role is constantly evolving. As such, in-house counsel must be flexible and able to adapt to whatever situations are thrown at them.

That’s because, unlike in the past, in-house teams are not chosen solely for the provision of their legal acumen, or their ability to draft contracts – although these skills are of course still very much required. Rather, the role played by in-house counsel these days is more of a strategic partner that supports the business in whatever way required, whether that be the provision of legal advice, the improvement of systems and processes, ensuring compliance with regulations, or responding to client and supplier problems.

Best Practices for In-House Counsel

In-House Counsel: A Guiding Figure 

In-house counsel does not provide, therefore, only a legal role, but acts as a guiding figure for other executives in highlighting issues in the context of the bigger business picture. In the completion of their work, in-house counsel should always simultaneously keep in mind the business, its management, clients, and corporate development. This, in addition to the necessary consideration of legal issues, is undoubtedly difficult. Yet it is necessary.

A Focus on the Big Picture 

This leads to the vital importance for in-house counsel of looking at the big picture; that is, considering the business as a whole. Lawyers must always ensure thoroughness and a focus on details; however, as in-house counsel, they must also consider what their company’s business team really needs them to do. That means not only the standard diligence that is involved in checking all documentation but really reflecting upon and understanding where the business is going and how any potential impediments standing in its way might be resolved.

The Interpreter

A key role for in-house counsel is as a liaison between the company and its clients or business partners. That means taking on a number of roles, from facilitator to interpreter. The lawyer’s purpose is to understand the complexity of legal issues and resolve them.  Furthermore, a company’s business team is likely to have neither the time nor the legal training to understand certain legal complications, regardless of their intelligence or business experience. They will expect their in-house counsel to solve legal related matters that arise, without being required to listen to any prolonged explanations of any issues. For in-house counsel, this means that they must be skilled at identifying the key legal issues which they must be able to deal with alone, and identify those which must be considered together with the business team – and then have the skilled capacity to discuss those issues in such a way that they can translate, as it were, the legal jargon into straightforward business English. Essentially, in-house counsel best practice in this regard is to collaborate with the wider team as business partners, bringing their own unique legal skills to the table to achieve the resolution that’s the best result for the business.

Risk Identification and the Courage to Say No 

The identification of material risks is, of course, a major function of lawyers, and in-house counsel are no different. One problem lawyers often experience is the need to tell their clients “no”. A client might arrive at a meeting with enthusiastic plans for expansion into certain jurisdictions or markets, for example, but there can be valid reasons why these plans are just not possible; legal, regulatory, financial or simply property-related. In such regular instances, lawyers are placed in the role of the negative member of the team who is the blocker of plans. Whilst that may not always be the most exciting position to occupy, it is the role of in-house counsel to identify these risks and warn their colleagues against making expensive or even unlawful mistakes that could jeopardize the business in any way. In-house counsel must be prepared to warn their business colleagues against moving forward with any transactions that have the potential to cause economic, legal, or reputational damages.

Acting as a Business Guardian

The best practices for in-house counsel are quite fundamental. Consider the business and its functions in the wider context, and not merely the legal issues. Act as the translator for the business team, breaking down legal issues into plain language and explaining what they mean for business development. Consider economic, legal, social and reputational risks and, where necessary, have the mettle to stand their ground and refuse to support hazardous business plans, even where colleagues are enthusiastic. Essentially, acting as a guardian for the business, guiding it away from harmful transactions, and protecting it from risk.

Evidently, these three key functions are closely interrelated, and in-house counsel must achieve the delicate balance of applying their judgment, legal knowledge, and experience, as well as business pragmatism. Yet these insights do not take into account the importance of factors such as building relationships and gaining a real understanding of company culture. In-house counsel should get to know their colleagues – introducing oneself, making conversation, and appreciating what they love about the company. Building personal relationships is crucial, and, like in so many areas of life, the ultimate key to success in business. Professional acumen is important, but communication is fundamental to successfully acting for a company as in-house counsel.