What does ‘know the business’ really mean?

In-house counsel today are much more experienced and sophisticated consumers of legal services than they ever have been in the past, and this means they are much more selective when it comes to what they look for in external legal partners.

In-house counsel today are much more experienced and sophisticated consumers of legal services than they ever have been in the past, and this means they are much more selective when it comes to what they look for in external legal partners. 

What better way to provide insight into what in-house counsel actually require than to have a group of talented in-house counsel from diverse organizations with diverse legal needs engage in a candid discussion on what works for them and what doesn’t. This was the focus at an event earlier this year by The Advocates’ Society called Pitch Perfect II: The Incumbent Lawyer. 

Targeting lawyers who have been practicing for 10 or more years, the Pitch Perfect series addresses the needs of mid-career lawyers, including how to advance their careers. The in-house counsel panel members included Shawn Graham, director, regulatory investigations, advisory and insurance at RBC Wealth Management; Amanda Klein, executive vice president and general counsel at Toronto Hydro; Terra Rebick, chief counsel, Canada for Thomson Reuters; and Anthony Ruffolo, manager, legal affairs and counsel at Honda Canada Inc. Each of them shared their views on what they look for in their external counsel, how best to develop relationships with clients and how a lawyer can become a client’s “go to” for legal issues.

A comment lawyers often hear from partners is “know your client’s business.” But what does this really mean? The panelists provided some concrete ideas. For example, if you know the personalities within an organization — from your in-house legal partner to their general counsel to their business partner and other senior executives, you have a real opportunity to not only provide practical, business focused and legally sound advice, but you also learn how best to provide it to different stakeholders. Also, if you know your client’s business and the issues they face, you can be more proactive and identify areas to mitigate legal risk rather than wait to solve a problem when it comes up.

A topic that has been spoken about a lot over the last few years is alternate fee arrangements. Law firms are grappling with the shift away from the traditional hourly billing model. While this may not be easy, in today’s world it is a necessity. Many in-house legal departments work closely with their business lines to maintain budgets, which mean they require greater predictability and transparency for legal spend along with increased value for legal services. The key is to ensure the right balance is reached between the client’s needs and the law firm’s needs (which are to ensure cost effectiveness for the firm). To achieve this, law firms and legal departments need to be more creative and nimble in offering and evaluating AFAs. 

What about a secondment with a client? This is a missed opportunity for senior associates or partners who may view this as a possible distraction to their practice. If external counsel get a taste of what in-house counsel deal with on a daily basis, they will gain valuable insight into how to meet their client’s needs. It is more than just providing legal advice — it is also about providing practical business advice, and engaging in strategic thinking that goes beyond legal expertise. A day in the life of an in-house lawyer is very different from that of a private practice lawyer. What better way to really know the issues your client deals with and how best to solve them than being in your client’s proverbial shoes. Think of secondments as a learning opportunity to not only solve your client’s problems with practical legal advice when you get a call from them but to proactively find solutions to your client’s pain points and help your client get their work done before they even pick up the phone to call you. 

The key takeaways from this event? Know your client’s business, be proactive, and be creative and nimble to meet their needs.

Reena Lalji is senior counsel at the CIBC legal department in Toronto.

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