When Marianne Bolhuis landed at Diageo Canada Inc. as director and senior counsel for Canada she realized pretty quickly she would be handling all matters across the board — more than she anticipated, actually. She was building the legal function at the Canadian office of the premium drink company from the ground up, and at times it was a little daunting.
But she didn’t want to pull the trigger too quickly and involve external counsel at rates beyond her budget. As often happens in companies where there hasn’t been a general counsel before they may not think there’s more work than one lawyer can handle — but the person hired to be that first general counsel quickly discovers there may be work for five lawyers.
While Bolhuis acknowledges there is “a time and a place for traditional law firms” what she really needed was someone like herself to handle the extra work.
“Sometimes you really do need a very senior regulatory lawyer for five or 10 minutes to get a quick answer about something,” she said, speaking in April at the Canadian Corporate Counsel Association’s annual spring
conference in Toronto on a panel called Innovation in Pricing Legal Services: Are General Counsel Overdue?
“Getting additional head count approval is one of the hardest things to justify.”
Instead of sending the work out or calling a firm for a secondment, she considered her options and wondered if a contract lawyer might be the right answer. She approached Cognition LLP, which provides the services of experienced in-house counsel.
Jackie Dinsmore, who is a former corporate securities lawyer with Blake Cassels & Graydon LLP and was assistant general counsel at TorStar for eight years, speaks to many solo in-house counsel and other small departments headed up by lawyers like Bolhuis who find themselves with lots of work to get done. “When I was at TorStar we were a team of three lawyers with what seemed like work for 10,” says Dinsmore, who is now a client services manager with Cognition.
“When I called Jackie I said I felt like I needed a clone of myself,” said Bolhuis.
A lawyer from Cognition now sits side-by-side with Bolhuis at the Diageo Canada office three days a week but Diageo has no long-term commitment.
“People ask if they should come to me or Karen (the Cognition lawyer) which proves it is working,” said Bolhuis. “The role of in-house counsel is evolving. It’s not a one-size-fits-all situation and you need to figure out what will work.”
What was supposed to be a six-month arrangement has turned into a longer stay for the Cognition lawyer and clients from the internal business units now see the lawyer from Cognition as part of the legal department.
Organizations that offer this kind of temporary assistance can be used to bring in help when needed. Some departments choose to have certain projects hived off or an entire practice area.
“Our model is not a staffing agency — it’s really a fractional in-house counsel role where you might not have the head count to hire but you need the help,” says Dinsmore.
Shekhar Parmar of The Counsel Network also works with in-house counsel to find solutions for those who find their departments short-staffed for a variety of reasons.
He says a client, the Alberta Electric System Operator, had three lawyers and needed mat leave coverage several times and opted to hire a contract lawyer each time.
“When we look at those kinds of scenarios, the investigation I do with the client is to ask what is the type and nature of the work that needs to get done and what is the complexity level?” says Parmar. “In some cases the push back to bringing on contractual employees for a period of a year is that if there is a steep learning curve, they don’t want to waste three out of the 12 months teaching somebody the type of work it’s going to be before they get real results.”
The upside is it can be a cheaper option than getting a secondment or farming the work out to external counsel. In the case of Canada Safeway, another client, the reason they went with a secondment was they were able to re-juggle the portfolio so the secondee would be dealing with commercial real estate matters, especially since leasing was their focus.
“They thought that although they could get a contract term employee they could also get a junior student as a secondment and they had a long-term relationship with the firm they worked with so bringing someone from there into the fold made sense,” he says.
Parmar says it’s tough to get junior independent contract counsel who will be experienced enough to take on the role because they haven’t had enough experience. In the U.S it’s become common for lawyers to go down the path of becoming a contract lawyer but it’s a less familiar model here in Canada.
“Unless you want someone at the five-year plus mark it’s challenging. I think one of the other challenges in the market generally, in Canada compared to the U.S., is we have a very underdeveloped legal contractor market in terms of the number of lawyers actively engaging in being employees,” he says.
It is often viewed as a somewhat fragile and risky move for a general counsel to bring in someone unknown for a short period of time.
“Especially in some of the small legal departments, many general counsel are trying to build a sense of value in the organization and they’re very afraid to get someone who will be in there for 10 months and doesn’t really give a damn about how that long-term relationship plays out,” says Parmar. “They may not have the same
understanding of the culture of the organization. They’re very cautious about upsetting what they’ve been building up for a while.”
That’s where the in-house counsel might feel they can control a secondment more than an independent contractor. But secondment was too costly an option for the AESO.
“We tried it early on with a lawyer second to us from one of the firms but the sense I get is they are kind of torn — one foot here and one at the firm. I would rather have somebody fully committed to us,” says Larry Kram, general counsel and corporate secretary at Alberta Electric System Operator in Calgary.
Kram was the only lawyer in-house at AESO for a number of years until about six years ago when the department grew by three additional lawyers, all of whom were women. Over the years there have been six maternity leaves to cover off. “What we’ve done is recruited for someone who was willing to do a term and in most cases we’ve brought them on as an employee for a one year term. It gives them some benefits but it’s a challenge too because the pool of candidates when you’re looking for a term employee as opposed to a full-time employee is much smaller.”
The type of work the AESO needs done is also somewhat unique.
“If you’re an oil and gas legal department and need to fill a mat leave in Alberta there are a lot of people with experience in that area but we can’t really go out and just pick someone to work in the electric industry — there aren’t that many people who know the business,” he says. “We tried to design the job description and function to be more generic legal work. We found that one of the candidates who did that, when she was finishing up her first mat leave another came along so we extended her position for a couple of years.”
Kram says at the end of that lawyer’s term she admitted she didn’t feel as engaged as the rest of the team because she wasn’t doing some of the core work of the business.
“We reallocated some of the work and then she really enjoyed it,” he says. “We’ve realized that to the extent we can, make the job as interesting as we can.”
At the same time Kram has to find the right fit to cover a mat leave he says he also has to try and minimize the disruption to his internal clients at the AESO.
“It takes a while for us to make a solid connection with the internal clients and if you’re going to bring someone new in and it takes a good year to get that going,” he says.
In fact Alberta has been a growth area for contract lawyers.
“In Alberta there is a lot of project- based work,” says Parmar. “Especially with the oil and gas companies there is work in setting up a new plant, for example. There is a lot of regulatory and other work in setting up the plant but once built they don’t have the need for that person anymore. So for that reason we’ve seen more project
counsel used here.”
On the candidate side it’s something Parmar is seeing more people become interested in for the flexibility it offers. “It’s an economic reality that people need to do this and have that flexibility. You also see it with the millennial generation who want to work really hard for eight months and then maybe have a month off. The career path is not as linear as it used to be and people have a lot more options in how to get to their final destination. The really smart employers are embracing that but I know legal is a particularly challenging field to do that in.”
Kram says his advice is to plan for the transition early, let internal clients know a full time lawyer is leaving for a period of time, that continuity will be maintained, and there will be overlap coverage, if possible.