In-house Lawyers Research Articles

Institutional professionalization of lawyers in state-socialism and post-socialism: Poland and Russia compared

ABSTRACTThe paper compares institutional professionalization of advocates (licensed private-practice lawyers) and in-house lawyers during the state-socialist and the post-socialist periods in Poland and Russia. The comparative analysis uses the conceptual framework of the sociology of professions. It shows that: (1) advocates were able to preserve a certain degree of collective autonomy and self-regulation during most of the socialist period in both countries; (2) Polish advocates were better integrated at the national level than their Soviet/Russian counterparts; (3) these institutional path dependencies determined the degree of autonomy and self-regulation in the post-socialist period; (4) the discrepancy between both countries is particularly pronounced in the case of in-house lawyers who were able to establish themselves as a self-regulated profession in Poland, but never made such an attempt in Russia; and (5) there was a process of partial ‘advocatization' of legal professionals who practiced in-house during the state-socialist period. The term ‘advocatization' means a change in the form of professional practice from employment relationship to service-for-fee practice. This process could be observed in both countries, but it took very different forms due to the institutional differences described above.

Corporate Lawyers: Values, Institutional Logics and Ethics

Corporate Scandals involving the misconduct of private practitioners and in-house lawyers appear increasingly prevalent - is the apparent flawed institutional logic the result of a shift in professional ethics and values?

Legal Risk: Definition, Management and Ethics

The report raises key questions about the role of in-house lawyers in balancing commercial and professional considerations; the readiness of in-house lawyers for the complex leadership and management tasks involved in legal risk management; and the extent to which professional ethics are embedded within those teams.Key Findings Include:• There was no shared sense of the correct approach to legal risk. • The in-housers we spoke to were not always clear or confident about their approach, or the best approach, to legal risk management• There is a clear divide between those who take a, ‘I know it when I see it’ approach to legal risk and those who deliberately applied systems, foresight, thematic and strategic thinking around legal risk.• Those interviewees with the most developed systems seemed most likely to see cultural dimensions to legal risk, with some emphasising the need to be authentically committed to the spirit as well as the letter of the law as part of a business commitment to compliance, legality and business ethics.• There is a need for in-house teams to reflect on the extent to which processes of legal risk engage rigorously in assessment, mitigation, communication, monitoring and overall evaluation of legal risk management. Many of our interviewees did not have well developed approaches to each of these elements of a risk strategy.• Some aspects of risk management may lead to overconfidence and approaches to mitigation which shift risk from the company to third parties, with the potential to raise questions about the appropriateness of this in certain circumstances.• There is the potential for risk management to change risk appetite by altering perceptions of, and appetites for, risk. In general, risk management increased the appetite for risk because it increased confidence that risk was both understood and manageable. This opens up for debate the question: is risk management as robust as such confidence suggests?• Objectivity and independence are necessary for risk assessment to be accurate and useful to the business but are in tension with the pressures on in-house lawyers to be commercial team players. These tensions are both overt and implicit. There are overt pressures and implicit biases at work which may sometimes undermine objectivity.• Appetite for legal risk involves accepting, even welcoming, tolerance for conduct which may be, or even may be likely to be, unlawful. This is sometimes in tension with the professional obligation to promote the rule of law and the guidance to solicitors that they must treat the public interest in the administration of justice as definitive of conflicts between professional obligations.• Such tensions also impact on corporate interests: there are relatively recent, serious conduct risk examples of allegations involving lawyers in and/or instructed by Standard Chartered Bank, the News of the World, Barclays, The Times newspaper, BNP Paribas and General Motors.• The extent and nature of these public interest facing obligations are neither understood, nor well-articulated in professional practice generally, nor in-house practice in particular.

To Be a Lawyer or Not To Be a Lawyer, That is the Question: The German Federal Social Court's Views on In-House Lawyers

(2014). To Be a Lawyer or Not To Be a Lawyer, That is the Question: The German Federal Social Court's Views on In-House Lawyers. Legal Ethics: Vol. 17, No. 3, pp. 448-453.

Legal Risk Management in EU Organizations

English abstract: Legal risk management is a methodology to manage legal norms which apply to the activities of the organization. Lawyers have been applying it to human resources and business law to increase the efficiency of their functions. This methodology may be adapted to the framework of the EU and the specificities of EU organizations since in-house lawyers who work for them are expected to realistically assess legal risks run by the administration. French abstract: La gestion des risques juridiques peut être définie comme une méthodologie de traitement des normes juridiques qui s'appliquent aux activités d'une organisation. Les juristes l'appliquent aux ressources humaines et au droit des affaires afin d'accroître l'efficacité de leurs fonctions. Cette méthodologie peut être adaptée au cadre de l'U.E. et aux particularités des organizations de l'U.E., dans la mesure où les juristes qui travaillent au sein de ces organisations ont pour mission de fournir une évaluation réaliste des risques juridiques encourus par l'administration.

What Ails the Large Law Firm? Will the Real FutureFirm Please Stand Up

“What Ails the Large Law Firm?” was written in the early summer of 2009, shortly after the completion of FutureFirm 1.0 — a “collaborative competition” in which teams of law firm partners, in-house lawyers, and junior associates competed with one another to create a law firm that would survive and thrive over the next 20 years. This essay reported the surprising results of the competition along with my own commentary on how these results could be used by BigLaw to adapt to changing times.Upon completing the essay, however, I filed it away. Back in 2009, law firm leaders had too many emergencies on their hands to listen to the unsolicited advice of a legal academic. Although I thought my analysis had merit, the timing was wrong. A better course of action was to let events play out.Nearly five years have past since FutureFirm 1.0. To our great relief, the fall-out from the 2008 credit crisis is behind us. To the surprise of some, the large law firm sector has come out the other side substantially intact. Headcounts are slightly up from 2008, and the most firms remain quite profitable. Yet, most law firm managers would probably agree with Bruce MacEwen’s sober conclusion that Growth is Dead.I am circulating “What Ails the Large Law Firm? Will the Real FutureFirm Please Stand Up” because I think most large law firm lawyers would be interested in revisiting the crisis of 2008-2009. Since that time, many short- and medium-term strategies have been tried, and many were successful. But they were also short- or medium-term. Lawyers at many firms are ready to have a conversation about longer-term ideas. Politicians may long for a crisis to make change. Prolonged ruts, in contrast, appear to bring out the best in big firm lawyers.With this brief prologue in place, it is my hope that “What Ails the Large Law Firm?” may be a useful and well-timed message.

Conning the IADC Newsletters:Protecting The Corporate Counsel Communications Shield: The Attorney-Client Privilege Is Alive and Well for Company Lawyers

This article originally appeared in April 2013 Business Litigation Committee newsletter. IN THE CURRENT electronic era, one of substantial challenges facing defense lawyers is protecting written communications involving corporate counsel. In many companies, corporate counsel are now often part of business management team, no longer only relegated to providing legal advice when asked to do so. Frequently, legal department attorneys are located with business unit and are actively engaged with company executives and product managers in both legal aspects of business and day-to-day business decisions. In fact, company titles for in-house lawyers sound like those of executives rather than lawyers, including Executive Vice-President, Chief Compliance Officer, Senior Vice-President, Chief Privacy Officer or Corporate Secretary. These positions bring our company lawyers directly into cross-hairs of business litigation involving company decisions ranging from intellectual property and contract disputes to product liability and environmental contamination matters. The various scenarios raise interesting factual questions for traditional protections afforded to clients in attorney-client relationship, particularly when it comes to assertion of attorney-client privilege or attorney work product protection. This sacrosanct principle is the oldest of privileges for confidential communications known to common law. (1) As all are aware, with certain exceptions, privilege protects against disclosure of confidential communications between attorney and client within context of seeking legal advice from a lawyer. The privilege necessarily encourages candid and open conversations between clients and their attorneys, allowing attorneys to more effectively represent their clients' interests by understanding inner-most workings of company operations, errors made in judgment, discussions surrounding correction of problems and liabilities that might flow from those decisions, and issues relating to damage control. These kinds of lawyer-related communications likely would be deemed relevant to any litigation concerning such issues and these communications are often accomplished electronically and become central to discovery disputes when placed on a privilege log. Discoverability of these written communications is challenged through motion practice with communications initially described generally along with names of those sending, receiving and copied. The object of defense is to keep these communications from being produced, even for review by trial judge or magistrate judge or discovery master. To do so, defense lawyers must have detailed substantive knowledge of communications, electronic history of communications, inter-relationship between those involved in communications, particularly lawyers, and motivations for communications. Since It]he burden of establishing existence of privilege is on person asserting it, (2) it will be necessary to prepare affidavits from those involved explaining factual basis for assertion of privilege, so that those making legal decision understand how and whether privilege or protection comes into play. For most part, since outside lawyers are invariably consulted for legal advice, they rarely will be asked to disclose information provided to them by clients, and since communication is almost always protected, we will not address outside counsel in this article. (3) The greater challenge comes when in house counsel are involved because those seeking communications argue that privilege is inapplicable or waived and cannot shield them from disclosure. To be sure, courts acknowledge that the need to apply [the attorney-client] privilege cautiously and narrowly is heightened in case of corporate staff counsel, lest mere participation of an attorney be used to seal off disclosure. …

How do Firms Make-and-Buy? The Case of Legal Services Sourcing by Fortune 500 Companies

Recent strategy research explains why firms sometimes make-and-buy (not make-or-buy)products simultaneously, but lacks explanations of how they strike the make-buy balance. We respond by developing a framework featuring two determinants of the balance: resource cospecialization and supplier portfolio selection. Analyses of in-house lawyers at, and law firms doing work for, Fortune 500 firms provide evidence that firms tilt the balance in favor of ‘make’ whenever opportunities for resource co-specialization exist, and in favor of ‘buy’ when they can reduce contracting costs by selecting a concentrated portfolio of suppliers with broad capabilities. We contribute new insight on firm boundaries by integrating capabilities and transaction cost theories of the firm, and by examining inter-related transactions within a corporate function to determine the make-buy balance.

Resource Co-specialization and Supplier Selection in Concurrent Sourcing

Recent research on concurrent sourcing has identified the preconditions for the simultaneous use of multiple sourcing modes (i.e. make-and-buy). However, little progress has been made to address this question: in the presence of such preconditions, how do firms decide how much to make and how much to buy? Our paper fills this gap by identifying two mechanisms that explain the make-buy balance in concurrent sourcing. First, opportunities for resource co-specialization within the firm enhance the benefits of internalization (i.e. make). Second, the supplier portfolio design affects the make-buy balance. In particular, a firm using a small number of suppliers benefits from relational contracting and consequently relies more on externalization (i.e. buy). Using a panel dataset of in-house lawyers at Fortune 500 firms, we demonstrate that concurrent sourcing strategies are tilted in favor of ‘make’ when firms have resources for co- specialization in the form of R&D, advertising, international presence, and legal expertise in their top management team. We also find that firms rely more on ‘make’ when they have a large number of suppliers of legal services. This paper contributes to theories of the firm by identifying reasons for variation in concurrent sourcing strategies, and by extending the enquiry to the domain of corporate functions.

Self-Regulation of Legal Professions in State-Socialism

The paper analyzes how the self-regulatory institutions of two legal professions – attorneys-at-law and in-house lawyers – developed in Poland and Russia from the second half of the 19th century until the collapse of state socialism at the beginning of the 1990s. These two countries constitute the most contrasting cases of socialist transformation in the region in terms of legal traditions and of the broader socio-political context. To adequately grasp the case differences it is necessary to include the formative period of the modern legal profession in the region. The comparative analysis uses the conceptual framework of the sociology of professions. It shows that (1) attorneys-at-law were able to preserve a certain degree of collective autonomy and self-regulation during most of the time; (2) institutional path dependencies reaching back into the pre-socialist past determine the degree of autonomy and self-regulation; (3) the discrepancy between both countries is particularly pronounced in the case of the occupational group of in-house lawyers; (4) the state-socialist regimes were, therefore, not as unifying and homogenizing as it is sometimes assumed.

Delawyering the Corporation

This article shows how in-house lawyers' role has evolved to address the high cost of legal services and the traditional information asymmetry between lawyers and clients. The first stage of this evolution involved the expanding role of in-house counsel from intermediary between corporate executives and the corporation's outside law firm to the corporation's purchasing agent in a broader market for legal services. The second stage could see legal work distributed among employees with and without legal expertise throughout the corporation. The article also shows how evolving legal information technology could facilitate corporations' full-fledged integration of legal information into business decisions. These developments have potential implications for the corporate and general markets for legal services and for legal education.

Invaluable for trade mark owners, in-house, specialist, and non-specialist trade mark lawyers

Invaluable for trade mark owners, in-house, specialist, and non-specialist trade mark lawyers

Just Another Brick in the Wall: Communications with In-house Lawyers Remain Unprotected by Legal Privilege at the European Union Level

As decided by the ECJ, legal privilege does not extend to in-house lawyers in antitrust investigations carried out by the Commission. The decision creates a discrepancy with national investigations as that extension is accepted in some countries. It further creates unease for companies taking advice from in-house lawyers, which may compromise their role in ensuring compliance. It raises questions as to why ‘enrolled in-house lawyers’ should remain subject to ethical and discipline rules applicable to external lawyers as their communications do not benefit from the same protection.

A private practitioner's guide to the perils of dealing with in-house IP lawyers

A private practitioner's guide to the perils of dealing with in-house IP lawyers

Asymmetric reimbursement system in an environmental conflict

This article explores how a fair-minded regulator has to set policy through an asymmetric reimbursement. The lawyer for a citizen group works on a contingent-fee basis, whereas a polluting firm has either in-house legal advice or lawyers on retainer. Under an asymmetric reimbursement rule we show: (i) the case goes to settlement if the objective merits of the case favour the citizen group; (ii) whereas it goes to trial, the probability winning the citizen group has is less than 50%, and the reimbursement policy incurs the total effort in trial to increase if the merits of the case favour the firm.

The role of in-house counsel in post-Soviet Russia in the wake of privatization

The mass privatization of Russian industrial enterprises in the early 1990s would seem to have provided an opportunity for in-house lawyers to enhance their role within the enterprise. Drawing on a series of in-depth case studies, the article argues that the shift from state socialism to the market had minimal impact on Russian in-house counsel. The lawyers themselves made little effort to take on new duties in the areas of commercial paper or corporate governance, and were often sidelined even in their traditional areas of competence, such as contractual relations with suppliers and customers. The case studies reveal variation, which are driven by institutional history and barter levels.

EU court clarifies legal privilege in European investigations

In its judgment on 17 September 2007 in Joined Cases T–125/03 and T–253/03 Akzo Nobel, the European Court of First Instance has:• rejected any extension of legal professional privilege to cover communications between a company and its in-house lawyers. This means that it is open to the European Commission to call for production of such communications during its investigations;• confirmed that privilege does protect written communications regarding the subject-matter of a Commission investigation exchanged between a client and its external lawyer after the Commission has started that investigation – and clarified that the protection applies to prior written communications prepared exclusively for the purposes of obtaining external legal advice related to the subject matter of that investigation; and• specified the procedure to be followed at Commission dawn raids where there is a dispute as to whether a document is protected by privilege.

Hired professional to hired gun: An identity theory approach to understanding the ethical behaviour of professionals in non-professional organizations

Most recent major financial scandals have come about with the assistance, tacit or active, of highly trained professionals whose ethical responsibilities were thereby violated. This article addresses the question of why this might happen. It argues that the problem may lie in the adoption of a common prescription, namely that to be effective, in-house lawyers need to be part of the corporation's strategic decision-making process. But, paradoxically, in so doing, the lawyers' identities might become modified such that the approach they take to handling ethical dilemmas becomes more like that of their non-lawyer colleagues, thus losing some of the benefits of their professionalism. The results of a postal survey of Canadian corporate counsel provide supporting evidence for this conclusion.

Blowing the whistle

Set out below are the guidelines on whistleblowing recently published by the Corporate Governance Committee of the Commerce & Industry Group (see Editorial, pages 189-90). The document is addressed to in-house lawyers in England and Wales, and references to “you” and “your” are to this audience. This and other publications of the Committee are available at www.cigroup.org.uk.

Criminal Risk in Corporate Practice - Balancing Duties and Risk While Ensuring Corporate Compliance as an In-House Lawyer

What are the duties of in-house lawyers in general and to ensure the Board is fully informed under the Corporations Act, in particular? What are the risks? How can those risks be ameliorated?