EEF Gives U.K. Law Firms A Run For Their Money

When Elster Meetering Ltd. announced in October 2001 it would close its facilities in Leeds, England and move production to its plant in Luton, Ian Stewart, the company's vice president of human resources, knew that lengthy negotiations with union representatives were inevitable. He also knew he would need sophisticated legal help for a process he expected to be long and protracted.

Although Elster has no legal department, Stewart didn't have to worry about the cost of hiring external counsel. In fact, he didn't have to worry about legal costs at all.

Elster was a member of EEF, the Engineering Employers Federation, a British association for manufacturing, engineering and technology-based businesses. Included in its annual membership fee is access to EEF's team of 60 attorneys and 25 paralegals who specialize in employment law.

The icing on the cake for Stewart was that he wouldn't have to spend a lot of time getting EEF lawyers up to speed.

"You don't have to do a lot of scene setting with EEF," Stewart says. "You phone them up as often as you like about any employment law problem, which is all they do, and they run with it until the problem is solved at no additional cost to the membership fee."

Inside Services

EEF provides the kind of service that most law firms and in-house departments only dream of achieving. EEF's 12 regional offices, for instance, all have 24-hour help lines. But their services go well beyond telephone advice.

In 2004, EEF's legal team took 2,100 cases to the United Kingdom's employment tribunals, which adjudicate the vast majority of disputes between employers and employees, including wrongful dismissal cases. EEF also handles appeals from employment tribunals, including Copsey v. WBB Minerals, currently on reserve on the issue of whether requiring an employee to work on a Sunday was a breach of human rights; Nelson v. Carillion Services, on pay discrimination against women; Anglian Home Improvement v. Kelly, a wrongful dismissal case; and Pioneer Technology v. Jowitt, which dealt with employers' liabilities under Britain's public health insurance scheme.

EEF lawyers even have appeared before the ECJ, most notably in Smith v. Avdel Systems, a landmark case on pension equalization. In addition, the organization offers compliance advice relating to occupational health and safety, and lobbies the government on behalf of members.

"EEF provided the legal advice in July 2002 when I moved all our blue-collar workers, who were on hourly and weekly pay regimes, onto a monthly pay scheme that harmonized their benefits with those our white-collar workers enjoyed," Stewart says.

Because employment law is one of the largest legal expense items for British employers, EEF's "all-you-can-eat" approach to legal services represents substantial savings for many of them.

It's a unique approach, not duplicated on a similar scale elsewhere.

Keeping Pace

EEF began in 1897 and was designed as an employers' trade union for engineering companies. Its primary business was collective bargaining on behalf of its members. "Employers needed institutions that could counter the growing might of the trade-union movement," Peter Schofield, EEF's director of employment and legal affairs explains.

Over time, membership expanded to include manufacturing companies, and EEF became known as "the manufacturers' organisation." But more recently, other organizations as diverse as utility companies, financial services organizations and even soccer clubs have joined EEF.

As the membership changed so did the legal and economic environment and EEF's mandate.

Perhaps the most significant development occurred in the 1960s when the United Kingdom took employment disputes out of the courts and moved them to employment tribunals. Intended originally as streamlined, informal forums in which parties could represent themselves, the tribunals--faced with an ever-growing web of employment-related legislation--became far more structured and procedurally complex. And when the United Kingdom joined the European Union, the integration of EU law into domestic law added to the complexity.

"The standard text on English employment law is more than 2,000 pages long," says Schofield. "So the employment tribunals bear a far greater resemblance to courts than the legislators contemplated."

And where there are courts, or bodies resembling courts, there are lawyers.

"When employment tribunals started up, EEF began advising its members in a small way," Schofield says. "But toward the mid-1970s, when it became harder for non-lawyers to present cases effectively, our role increased. By the end of the 1980s, providing employment law counsel became one of EEF's major features."

The rise of EEF's law function corresponded with the diminishing importance of unions in the private sector.

"Our role as negotiators and collective-bargaining representatives has diminished, but we continue to fulfill our historical function in the employment relations sphere through the employment law advice that we give," Schofield says.

The shift, however, hasn't affected EEF's growth.

Members Only

EEF currently has 6,000 members that collectively employ 900,000 people. The member companies range in size from giants such as Caterpillar and Siemens, to organizations with only a handful of employees.

EEF is a mutual organization, which means the members own the organization and trustees hold the EEF's property and pension fund on their behalf. Although EEF wouldn't disclose its fee structure, the organization's revenues of approximately $60 million suggests an average membership fee of about $1,000. And according to government figures, the average employment tribunal complaint costs an employer $4,000 in legal expenses and lost management time.

In other words, it's not difficult for most EEF members to get their money's worth.

"Most of our members get a great bargain," Schofield says. "When clients go to law firms, they're on the clock. Our members can call us and keep on talking."

The way Schofield puts it sounds a tad simplistic, but the truth is there's nothing complicated about the process. Any member with an employment problem can contact EEF at any time; regardless of how frequently the member has already used EEF's legal team or how complex the matter is, the organization will handle it.

According to Schofield, that's why even members with significant in-house departments refer problems and difficult employment cases to EEF's lawyers.

Billing Bliss

Overall, Schofield believes members have an "easier relationship" with EEF than clients have with law firms because fees are not an issue. Similarly, EEF's lawyers aren't required to justify their existence, as in-house departments must do.

"Once a member has paid that one check in advance each year, we're there to serve them, period," he says.

And--unlike office-bound lawyers from private firms--EEF lawyers, who are fully qualified and on EEF's payroll, regularly visit members' premises to get instructions, obtain evidence, discuss briefs and familiarize themselves with a client's operations.

"It's not unusual to see an EEF lawyer on the factory floor," Stewart says.

It all sounds a bit idyllic. But Schofield admits he does face members who "want to monopolize our attention."

Arguably, that can make life difficult for EEF's lawyers. Still, Schofield maintains he has no trouble finding and keeping recruits. "It's true that lawyers don't get cheaper by the year, and if you wanted to be a wealthy lawyer, you wouldn't come to work here," he says.

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Julius Melnitzer

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