Law Department or Unicorn? Does a Company Need Either One?

My first blog post asked the question, “Why do companies have their own legal departments.”  Embedded in that question is does a company need a law department.  The lawyerly answer is, “it depends.”

You are a big multinational company, and S&P 500 company, and the like, which means you probably already have a law department.  Your company is big and probably generates lots of legal issues.  So, it’s a given that you have a legal department.

There are still some big questions for these in-house legal departments.  Do you have the right number of lawyers?  Are you balancing internal lawyer costs with outside options?  Do you really need a fourth lawyer, or do you need three in-house lawyers and some external support?  Is it better to pay hourly for that external support or use a subscription-based model that gives you more certainty on your monthly spend and may well be cheaper than the all-in costs of an additional attorney?

You are a smaller company or business, asking should I have an in-house team.  You may not be ready for an in-house lawyer, much less a law department.  Or what you want is a unicorn to be your in-house lawyer.  What's a unicorn?  You are looking for a lawyer that is 20% corporate, 20% commercial contract expert, 10% IP expert, and so on.  Here is a recent LinkedIn job listing for a general counsel:

“You will have proven business savvy and strategic vision, as well as experience with commercial contracts, corporate governance, finance, privacy, marketing, regulatory/legal compliance matters, labor and employment, litigation management, and intellectual property management (protection of trademarks, brands).”

You get the point.  A hard to find unicorn.

Maybe your needs are different than you think.  Perhaps you are stuck thinking about the law firm model where you have to pay different lawyers different hourly rates to cover all these legal bases.  Or, maybe you should find a subscription-based firm that gives you access to experts in all these areas, serves as your general counsel, gets to know your business – and may even be cheaper than salary and benefits for a unicorn – if you can even find one.

 

The Four Pillars of an In-House Law Department

Why do companies have their own law departments?  It is an important question for leaders of law departments to ask themselves and their teams.  It is an important question for in-house or want-to-be in-house lawyers to understand.  However, it is a question that is not asked nearly enough.

Do a quick Google search for why companies have law departments.  You will find legal websites that say various versions of “to provide preventative legal management,” “to help the business avoid costly mistakes,” or to avoid punitive impacts of decisions made without legal counsel.”  These answers are framed from a risk mitigation or risk elimination perspective.

You will also find websites that approach the question from the business’s side.  They say things like “be a trusted partner to the business,” “help the business understand legal risks as we make decisions,” “be a key resource,” and “help create parameters within which the business can operate.”

In conversations with lots of chief legal officers and general counsel as well as business people who rely on their law departments, the aims of an in-house law department distill down to about four pillars:

·   Quality legal advice timely. 

·    Position the business for positive outcomes. 

·    Develop people. 

·    Cost effectiveness.

Need some help thinking about the application of these pillars to your law department?  Watch for more posts.  And, second, let’s talk.