Building the legal department of the future

In-house counsel should focus on specific challenging areas to ensure success

With 22 years as a general counsel soon coming to a close, I felt that this was an appropriate time to speculate on the future of the in-house legal department. Through the past 22 years, much has changed for in-house lawyers and the clients they serve. Some of the main areas that will challenge in-house departments in the short- and long-term are:

Ethics. The future of the legal department is, first and foremost, ­dependent on the success or failure of the business it serves. With the Great Recession ­transforming into a rather lackluster recovery, businesses—particularly those that are publicly traded—try to perform according to the stock market’s expectations. The economic viability of any company seems to be tied to short-term gains or losses, rather than its long-term development.

Corporate expediency and resorting to short-cuts will become the modus operandi of the business world. As a result, business people may increasingly expect lawyers to give the answers they want to hear rather than the ones they should hear. We are not just “hired guns.” In-house counsel must continue to advocate that businesses strive to focus on doing the right thing for their employees, their customers, the public and the environment, even if that is not the desired answer. The attorney’s ethical role will inevitably come under increased scrutiny by those outside the corporate world as these pressures from the business team escalate.

Legal Costs. There seems to be no end in sight to the increasing pressure to cut costs and improve ­efficiency. Every legal department will be struggling with demands to reduce headcount, particularly for a department that does not appear to bring in revenue.

The business team will impose the use of metrics on the legal team. Although metrics of a quantitative nature serve a purpose, they do not take into account the qualitative nature and added value of the in-house counsel’s work. In-house counsel should be neither defensive nor apologetic when discussing the value they bring to the business.

Technology. The future will bring a continued reliance on technology by attorneys and business people. As companies move their businesses into the virtual realm, in-house counsel will need to be cognizant of advances in the technological world, not just in hardware but in social media and the software and applications used on the hardware. However, having the latest tech toy only benefits the ­company and its counsel when it is used to enhance the in-house experience.

In some respects, the virtual office environment may work to isolate the in-house counsel from her clients. In-house counsel should never become so immersed in the virtual world that they lose sight of their role as legal advisers to business people. An attorney can avoid this by practicing the art of verbal communication with clients—in person or by telephone. There will never be a technological alternative that functions as well.

Diversity. Due to the increased emphasis on diversity in the law school admission process, the pool of candidates for in-house legal positions will by necessity become more diverse.

Diversity remains an issue in the overall corporate setting that must be focused upon. Lawyers need to be advocates for change in their companies. Diversity requires nurturing on the part of the general counsel, who should act as a role model for the business.

There are some land mines ahead for in-house counsel. However, being aware of them will help to minimize or eliminate any issues that they raise.

Thomas Lalla is SVP and GC of Pernod Ricard USA.

Thomas Lalla

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