With an eagle eye on costs and the need for help meeting their own goals, in-house counsel are looking for outside law firm relationships they can rely on and when they do, they tend to stay loyal.
Speaking as part of a session called In-house Counsel to External Counsel: What we need that you don’t deliver during the Federation of Asian Canadian Lawyers conference Nov. 10 two Canadian and one U.S. in-house counsel talked about the challenges they face.
“It speaks to the challenges that still exist that we’re still having this kind of panel discussion,” said moderator Jonathan Lau, legal counsel with TV Ontario.
“When you look at why in-house counsel change firms, yes there’s price — costs are extremely important — but it’s not just our legal budget. Even though people think we don’t make revenue, we definitely save money but they see us as overhead,” said Jin Hwang, staff counsel, Northeast Area, legal department Verizon Wireless who works in a department of about 100 lawyers. “So there are limited funds for outside counsel and that’s why so crucial that the outside counsel we do use provide the results we need.”
Hwang said the legal department at Verizon refuses to pay for work done by first years, junior, or mid-level associates.
“I tell partners at the law firms we work with that I don’t want anyone more junior than six-to-seven years out of law school because they’re not efficient, they’re going to have to talk to the partner about everything and can’t make a decision on their own. I still don’t know that they know how to do research correctly. It’s a waste of my time and my company’s money,” she said.
Hwang said external law firms should act as a business partner in the same way the in-house legal department is the business partner to the entire company.
“To have outside counsel that doesn’t help you become more efficient is my biggest pet peeve.”
As the only lawyer in his department, Will Chang, vice president, general counsel, and corporate secretary with Granite Global Solutions, uses 10 different law firms of varying size for different needs such as litigation, acquisitions, and employment law.
In terms of choosing external counsel, Chang said in some cases they are lawyers he worked with at two previous law firms he was employed at, while for other matters he sticks with a corporate-commercial lawyer who left a large firm and is now at a boutique offering “Bay Street services at less than Bay Street rates.”
“His billable rate is about 60 per cent of what it was before,” said Chang.
In another instance, he uses a lawyer he saw at a conference and was impressed with his knowledge in a particular area of law.
Chang echoed Hwang’s comments on law firms billing for junior staffers.
“If you’re bringing a junior and a student to a meeting but don’t plan on billing me for their time make sure you say that. The person on the other side is always going to think you’re billing them unless you tell them otherwise.”
In some cases, external firms seem to be missing the opportunity to work with in-house lawyers who can use their services, said Julie Wong Barker, a bilingual senior counsel at MTS Allstream, which has 12 lawyers in its legal department.
While the director of Wong Barker’s law department recommends lawyers he has worked with, she has opportunities to choose lawyers for certain files.
“I think it’s interesting that I’ll go to different networking events and meet private practice lawyers but I find it interesting that I often get the impression people aren’t trying to work a relationship with me and I have work to give out. What I would say is you’re meeting an in-house lawyer so make the effort to get to know them. They may be very happy to send work your way,” she said.