An evening with corporate counsel

Last week a group of leading senior in-house and general counsel gathered at the Renaissance Chancery Court Hotel, central London, to discuss some of the critical issues currently facing in-house legal departments.

The underlying theme of the discussion was the shifting role of corporate counsel, not to mention mounting workloads in the light of global economic turmoil. Other issues on the agenda included the strengthening of the corporate counsel role within company hierarchies, team management and handling of tough cost constraints. Below is the pick of the evening's debate.

Has the role of general counsel (GC) changed as a result of the economic crisis?

Toby Hornett, corporate counsel, Canon Europe: I'm not sure it actually has. Okay, we are seeing harder negotiations over issues that wouldn't have been deal-breakers even a few months ago, but at the end of the day the job is still the same.

Julian Allen, divisional head of legal, Capita Financial Group: I'd agree that the role has stayed the same, but I would add that the balance of power has shifted. It is a combination of the status changing and people's appetite for risk changing.

Jeremy Ogden, general counsel, Barclays: What we are having to do even more than before is justify what we do and consistently prove our worth.

Lynton Boardman, group general counsel and company secretary, QinetiQ: The economic crisis has not brought about a fundamental change in the GC role - what has happened is that an opportunity has been presented to demonstrate the 'value add' of the legal function, whether as trusted advisers, experienced deal-doers or, at its most basic, a source of support.

How important is the risk management aspect of a GC's job?

LB: As a lawyer, you automatically tick a lot of those risk function requirements, advising on what is sensible and what is not, both legally and commercially. So it is logical that we are involved in looking at the risk aspect of key company decisions.

Michael Pitt, managing director, head of legal, JP Morgan Cazenove: I agree. And on top of that, I have noticed the legal department is increasingly being used as a kind of legal-ethical confessional, where individuals know the right course of action but want a non-business line view to give them moral support. Therefore, we are not only risk managers but have a positive reinforcement role within the organisation.

How do you keep those under you motivated given that in-house is a relatively flat career trajectory?

MP: It can be a struggle to manage career development in a small department. During the downturn, the situation looks after itself to an extent because people are happy to put their heads down and get on with it. Looking ahead, there may be issues with people wanting to move once the economy improves. It is a difficult question - one that I don't have an answer to, I'm afraid.

JA: It comes down to managing people - making sure that you are giving them work that you think will motivate them. Secondments can also be quite useful.

TH: It is hard, but I think that it is important to continue to do the right things irrespective of the economic climate. For example, we do things like seat swaps with law firms and secondments between head office and national sales organisations. Other options include giving people a specialist area of law, or giving them responsibility for a country that does not have a lawyer. We also allow people to present to a senior audience and host the department monthly calls on a rotational basis.

How can you get better value for money from law firms?

TH: Discounts tend to be easier to get if it is not a zero sum game - by that I mean in return for something like reducing the size of the panel, a guarantee of a higher volume of work or offering to take some secondees.

JA: I often use junior barristers rather than law firms for certain smaller pieces of work, as they offer extremely good value for money.

Should GCs sit on the board?

JO: I don't think it is necessary for GCs to sit on the board as long as they attend board meetings and receive all the relevant papers.

LB: There has never been a better opportunity in the current economic climate for GCs to justify a seat on the main board - the main issue though is access, both to members of the board and key decision-makers across the organisation.

MP: I'm against it on the philosophical basis that the board contains business people who make decisions about the business. Lawyers advise to help those people reach those decisions, but a non-legal business should not be run by lawyers. At the same time, the business people - in our case investment bankers - need to take ownership of and responsibility for risk issues including legal and reputational risk, and there is a danger of over-reliance on the legal representative for this.