With the North American economy still stuck in low gear, debt crises continuing to wreak havoc in Europe, and growth in China’s gross domestic product dropping into the single digits, corporate Canada is keeping its belt tightly notched. Forget about adding staff: lean and flexible is today’s corporate mantra. At the same time, general counsel are thinking twice before they turn to legal firms where experienced partners charge $600 and more an hour.
So what do you do when the stack of contracts requiring your attention keeps getting higher, the due diligence on your company’s new acquisition was due yesterday, and your senior legal counsel just came down with the flu?
For more and more Canadian legal departments the answer lies in hired guns. Project lawyers, contract lawyers, temps, freelancers — call them what you will. The key is they can work as many or as few hours as you need — often remotely and at rates less than half what a typical law firm would charge.
If you are inclined to think these free agents are fit only for mundane document reviews or e-discovery, it’s time to wake up to the breadth and depth of legal talent on tap.
Across Canada, highly qualified lawyers are setting up shop as counsel on call, offering expertise in everything from intellectual property to corporate restructuring. Yes, a few are simply trying to pay the mortgage while they’re between “real” jobs. Many, though, have deliberately chosen a freelance career.
Take the example of Natalie le Cavalier. After serving seven years as in-house counsel for GE Capital — and earning her Six Sigma Green Belt certification in the process — she said goodbye to her 500-hour-a-year commute in 2004 and hung out her shingle as a project lawyer. Today, le Cavalier, who is based in the Montreal area, works with global companies, guiding them through new regulatory frameworks, negotiating multimillion-dollar contracts, and contributing to compliance projects.
For her clients, like McKesson Canada’s Jennifer Zerczy, the appeal is clear. “It’s a very simple matter of economics,” says the vice president of legal affairs for the healthcare solutions company. “Somebody like Natalie is a more economical alternative for an in-house law department than farming out additional hours to an outside law firm.”
When Zerczy faces a spike in workload or a project too time-consuming to handle in-house, she turns to project lawyers like le Cavalier.
Toronto’s Joe Milstone has taken the idea of corporate counsel on demand a step further, gathering together more than two dozen project lawyers under the umbrella of Cognition LLP. Yes, the firm does have a bricks-and-mortar presence, but you won’t find any oak-panelled boardrooms, art collections, or armies of articling students in the company’s converted warehouse on Adelaide Street West.
What you will find are seasoned lawyers with in-house experience who charge $225–275 an hour, depending on the nature of the task, or $1,500 a day.
Milstone points to a Cognition lawyer who spent 14 years at Cassels Brock & Blackwell LLP and subsequently headed up the legal department at Canadian Tire. “You’re going to get him at a rate that’s less than what the large firms would charge out even a first year,” he says.
It’s a concept that intrigued Marta Lewycky, vice president of legal affairs for First Capital Realty. So when a portfolio of acquisitions that need to be reviewed hit her desk a few years ago, she called Cognition rather than pull her staff away from their regular responsibilities.
She wanted someone who could take on the task with very little supervision, without charging big bucks. Cognition delivered. “It was fantastic,” says Lewycky. The firm sent a highly experienced, knowledgeable lawyer who worked on site once or twice a week and remotely the rest of time, communicating by phone or e-mail.
According to Lewycky, the arrangement proved very efficient and far less costly than turning to a traditional law firm.
The reasons for hiring project lawyers extend beyond impressive savings, however. “Cost is always a factor. Don’t get me wrong,” says Janice Spencer, vice president, legal counsel at Rogers Communications Inc. “But what’s important here is the value that’s added by the nature of their work.”
She relies on Cognition an average of 20 hours a month to review RFPs and contracts for business customers that her team is too busy to handle: the monthly and quarterly overflow that doesn’t add up to a full-time position.
“It’s just been ideal,” she says. “They have the familiarity because they’re doing it time after time. They understand our business pressures and our business needs.”
Continuity is also key for Zerczy. “[Project lawyers] have the opportunity to build up knowledge about your company, as opposed to outside counsel who often will come in cold,” she says.
Unlike law firms, most project lawyers bring an in-house mentality. “They’re very senior and very capable and really understand the issues,” says Lewycky. “They understand how business functions.”
For smaller firms, project lawyers can serve as part-time general counsel, working one or two days a week. For companies with legal departments, they can take on projects, seeing them through from start to finish, or cover maternity leaves, sick leaves, or disability leaves. And whenever the workload threatens to swamp your in-house staff, project lawyers can step in to cover the overflow.
“It’s basically an extension of your department that you can ratchet up and down depending on your own needs,” says Milstone.
Of course, this isn’t a new phenomenon. “I’ve been recruiting for over 16 years now, and I’ve always seen contract lawyers,” says Warren Bongard, president and co-founder of ZSA Legal Recruitment. “What’s new is the number of them.”
These days, project and contract lawyers account for 10 to 20 per cent of ZSA’s business. “The use of contract lawyers is more prominent in difficult times,” he explains.
Billie Watkins, regional vice president of Robert Half Legal, is also seeing greater demand for project and contract lawyers, especially for large projects such as due diligence and mergers and acquisitions, as well as e-discovery. She is also getting more calls from financial institutions facing increasingly onerous regulations but reluctant to add permanent staff.
Numbers in Canada still lag those in the U.S. and the U.K., where project lawyers are a well-established option. However, Watkins predicts that will change.“I think the practice is becoming more and more accepted and more common,” she says. “It’s just a matter of general counsels and law firms being a bit more educated about the benefits.”
Milstone agrees. In seven years Cognition has expanded to 31 lawyers. Meanwhile, more no-frills firms like ATD Legal Services and LexLocom Recruitment Ltd. have entered the scene, offering “associates on demand,” project counsel, and consulting and document review services.
According to Milstone, the role of general counsel is shifting to that of a strategic manager who unbundles legal projects and assigns different components to the most appropriate person, whether that’s someone in-house, a top-tier Bay Street firm, a document review shop, or a project lawyer.
Even when the economy improves, he foresees demand will remain strong for lower-priced legal options.“I don’t think we will ever get back to where we were, where people were willing to just take legal services at whatever price they came,” he says.
Ready to Test the Waters?
Yes, turning to on-call counsel can save you dollars, but only if you marry the right person with the right task. Start with a small, discrete project that’s easy to hand off.
Next, find someone who understands your industry and has the legal skills you need. Ask colleagues for referrals, go through a recruiting agency, or turn to a no-frills firm like Cognition, ATD, or LexLocom. In Ontario, you can also consult the Law Society of Upper Canada’s online registry of contract lawyers.
Don’t ignore due diligence. “I would certainly check references,” says Jennifer Zerczy, vice president of legal affairs for McKesson Canada. “And I would absolutely make sure that I’ve had a clear discussion with the project lawyer at the outset about what our mutual expectations are.”
Think through the logistics. Will the lawyer work on site or off? What files will she need access to? Who will she report to and how?
Once your counsel-for-hire is off to the races, be sure you provide real-time feedback, suggests Billie Watkins, regional vice president of Robert Half Legal. As well, make her feel part of the team.
“You have to set up an environment for success,” she says. “You can’t just bring someone in and just throw work at them and say, ‘Do it as fast as you can.’”