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During the past 20 years, when lawyers could rely on a steady stream of work from in-house counsel, this answer was pretty easy. If you had a relationship with a GC, you were set, and you protected it. Now, though, the game has changed, and it’s time for lawyers to reconsider their loyalties.

I always read Joyce Smiley’s excellent newsletteVerbatim: What Clients Say. One edition, “In-House Counsel Say It’s About Relationships,” features quotes from GCs citing specific lawyers’ relationship-building behaviors.

IMO, one lawyer cited has taken GC-loyalty too far. The GC says that “it’s not uncommon for outside counsel to curry favor with management, but [lawyer] never breaks rank. ‘Law firms aren’t always that way with in-house counsel.’”

Personally, I’d describe communicating solely with the Law Dept. as myopic. Doing so subjects outside counsel to some very real risks and constraints, such as being:

  • trapped in the past, largely ignorant of emerging issues, 
  • aligned with those who must follow the rules instead of those who make the rules,
  • aligned with a cost center instead of a profit center,
  • feeding solely from the legal budget instead of operating budgets, which are much, much larger, and
  • vulnerable to a change of GC.

In-house counsel are employees of the company. The company pays your fees. You represent the company. Your job is to help the company achieve its  

  • strategic aims, 
  • operational goals, and
  • financial objectives.

Once you’ve done all that to the degree that you’re able and permitted, you’ll naturally want to help employees succeed professionally. That’s where “watching someone’s back” comes in.

This cuts both ways. In-house counsel who prohibit or discourage outside counsel contact with operating executives are short-sighted, too. 

One of the client teams we guided faced just this type of choke-hold, i.e., they were only allowed to speak with in-house counsel. They earned their way out of this constraint by initiating discussions about high-impact emerging industry issues too new for the Law Dept. to be knowledgeable about. In-house counsel, uncomfortable with their potential blind spot, recognized that their self-interest was best served by including relevant operating executives in the discussion. This produced three winners:

  • Operating executives could engage their inside/outside lawyers on the most important topics, avoiding minefields
  • In-house counsel’s status was raised with operating executives, who saw them as more relevant to the issues that counted most
  • Outside counsel earned access to operating executives, reinforcing their intelligence-gathering-and-sharing capability

The Law Dept. is not the company. It is one functional unit, no more. Limiting your relationship-building to them is as narrow and short-sighted as would be focusing solely on any other single entity, e.g., Finance, or Engineering. Your job is to help the business succeed.

Mike O’Horo

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