In-house lawyers: an evolving sector

In-house lawyers: an evolving sector

  • Filippo Ferri

I am often asked which sector of the legal market has undergone the greatest and most significant changes in the last fifteen to twenty years. Well, although the answer may come as a surprise, I am sincerely convinced that the sector which has evolved, which has changed the most, is not at all that of lawyers - that is, of a particular practice - rather that of companies’ in-house lawyers.

When I started my career, I clearly remember that the world of in-house lawyers was nothing like it is today. Even in the largest and most structured multinational companies, it was not uncommon to encounter extremely hybrid figures from a professional point of view, often lacking a specific and solid legal background, indeed often assigned to legal departments despite coming from extremely different sectors (in some cases, even from the commercial sector). In other words, there wasn’t - at least on a large scale and with the exception of a few companies that had begun to 'look far ahead' ahead of their time - an actual legal department with specific expertise.


This situation had very significant consequences. On the one hand, this meant that lawyers frequently had no precise interlocutor with whom to manage the case, with whom to share choices and strategies, but also to whom to ask for support in case of need (documents, witnesses, information, etc.). Not surprisingly, at the time, lawyers would liaise, for example, directly with the plant manager or the director rather than with the head of the legal department. On the other hand, for in-house lawyers this meant the total outsourcing of legal services. Legal departments often did nothing more than assign files to external consultants, without directly handling a single step of legal issues (whether judicial or advisory). Lastly, companies had to bear a high cost for the full outsourcing of legal services, without being able to have any actual control (and sometimes even full transparency) over the type and quality of services rendered by outside lawyers.
However, as mentioned above, this sector has undergone a tremendous revolution over the last fifteen years or so.

It is no exaggeration to say, in my opinion, that today the in-house counsel sector of companies has undergone a real 'surge' upwards, especially in terms of quality. Companies - especially companies within multinational groups - have well-structured and solid legal departments made up of highly selected individuals with specific legal backgrounds, often with past experience in high-level law firms. These departments, moreover, have a rich internal diversification - depending on the size of the company - with figures dedicated to specific branches of various corporate legal issues: litigation, commercial & IP, compliance, tax, and others.

The 'revolution' we are talking about has had a very incisive effect on the very picture we briefly gave above. Today, companies no longer outsource the full range of legal services they need; rather, they have largely internalised them, leading - in my opinion - to a virtuous effect, i.e. the 'outsourcing of what really needs to be outsourced'. Put differently, outside lawyers are involved only in truly sensitive and serious matters, where their intervention is also necessary for internal governance reasons. What is more, this new scenario should lead to an increase in the 'average quality' of outside lawyers too: lawyers today interact with a well-prepared interlocutor, who speaks the same language as them and who is able to assess the type, value and accuracy of the service rendered.

I am a criminal lawyer and view this change in companies’ in-house legal departments as an extraordinary improvement and a formidable resource. In the world of corporate criminal law - with its extremely delicate and difficult issues - the in-house counsel has in fact become an irreplaceable partner for outside lawyers. A true 'ally' in the company, someone with whom to discuss trial choices, strategies, and share the construction of the case, from gathering evidence to choosing arguments, though also an indispensable contact person for liaising with other corporate functions that may be related to the matter (such as H&R, anti-fraud, etc.). It is undisputed that the criminal trials in which the best results were achieved are precisely those in which the support of a good in-house counsel, who assisted the lawyer in handling the case, was available.

In short, general counsel, senior legal counsel, chief compliance officer and many other figures are the new, undisputed protagonists of today's legal market. Whenever - though very rarely now - I come across a company without an in-house legal department, the comparison is merciless. There is no doubt that, on this front, things have definitely changed for the better.

 

Article published by "Forbes" magazine, November 2022
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