In-house Counsel Need to Be Proactive About Internal Lawyering

I know I've failed as in-house counsel when I hear by accident about a new project or transaction of my non-profit organization. If that happens I haven't done my job. One of the primary reasons for having and paying for inside counsel is to keep the organization on the legal straight and narrow as efficiently as possible. If the in-house lawyer is finding out about new projects only as they are about to launch, much of the advantage of being in-house is lost. You might as well be outside counsel. It's not a good position to be in either for the lawyer or the organization.

Over the years I have preached to my colleagues, in the words of the old Fram oil filter commercials, to "pay me now, or pay me later." By that I mean they should bring in the lawyer early for every new project or transaction. Because, again in the words of Fram, if they don't "pay me now" (so to speak) they will surely "pay me later" as I try to play catch-up in identifying, then heading off, any legal complications.

No in-house lawyer wants the reputation of being the Abominable No Man on new initiatives. If he gets that reputation, it is probably because he has not integrated himself fully into the operations of his only client. He is passively waiting for issues to come to him rather than actively monitoring what's going on. That approach greatly increases the chances of having to say "no." That answer may be legally correct and thereby protect the organization, but a more engaged lawyer could have been a partner at the outset who worked to get to "yes."

The passive lawyer creates not only wasted time, money and irritated staff (including bosses), but he is also shirking his legal duties by sitting in his office. No doubt he drafted the organization's board-approved antitrust policy requiring legal review of all new projects at their inception. He should look again at the organization's insurance policies that almost certainly require the same kind of legal attention. And if he is lax about those obligations created long ago, he should certainly want to avoid being tagged in the regular internal or external audits his organization is subjected to. The lesson: Being a professional in-house lawyer means getting away from the desk, walking down the hall and getting engaged.

But that is only the minimum requirement. It is much better for the in-house lawyer to train the staff at regular intervals in how he can help them do their jobs. For my part, I should probably drop my Fram oil filter speech in favor of a more up-to-date reference that younger people actually understand. Really, who younger than 40 has ever heard of Fram oil filters?

Such training helps, and my experience with it is all positive. Project leaders actually welcome early legal input because they know it smoothes the way to success. They learn to identify issues I might never have thought of otherwise. For example, one department head asked me if he should keep using a license agreement I approved two years ago. The answer was "no" because technology had changed. I updated it in about 20 minutes, and future angst was avoided.

Still, engagement is the key. Years ago I discovered by visiting with the HR department head that we had hired a consultant to revamp many of our technical operations. Unfortunately, the consultant's method of dealing with our employees was (to me) a clear violation of the Labor Act. We quickly shifted gears enough to fix the violation without losing the advantages of the project. I have a few other examples, but I am done admitting any more of my lapses for now.

In the meantime, I'm working on a replacement for my Fram oil filter metaphor. I am open to suggestions on this. Any ideas?

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