A roundtable discussion: Bridging the gap between in-house and outside counsel

Mary E. Doohan, Morton Salt

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Bouldon: Personally, it’s about 20 percent or more, but I would be watching it as it unfolded and would start to become concerned as we got close to the 10 percent figure, and would start asking questions at that point. Not that I’ve never had anything run over, but I’ve never been surprised. Maybe that’s the key here.

Von Hoene: Just as we want our outside counsel to be our partners, we need to be theirs. We need to understand that when we cross to the other side of the table, remember that there are unexpected events in legal matters, and it’s unfair to outside counsel to draw a line and say, ”You made a commitment for this amount,” if there are extenuating circumstances.

The worst thing for all of us, and this is something I think some people don’t fully appreciate on the outside, is, if you find out that a matter is going over budget, there are two problems. One is you’ve gone through the budget. And in some ways that may be the lesser of the two problems. The other is, you haven’t advised your client of these expenses and the person, in turn, who is budgeting the matter, hasn’t had a chance to make an accommodation.

Susler: That’s actually one of the things I will often remind my business people when discussing — should something become a litigation matter. When you go into litigation, you lose a certain amount of control over what happens. Remember, you get a budget, but nobody can guarantee this case will end at summary judgment.

Findlay: It seems to me that litigation costs are increasing not just because law firms’ rates have gone up — to some extent you can negotiate decent rates and freezes with law firms. It’s the new role of e-discovery in the last few years. The percentage of those sorts of costs in a matter has been going up dramatically just in the last couple years.

I keep finding myself being surprised in litigation when I hear we’ve spent X on it by a certain time. I will think to myself, ”That just doesn’t seem right. This case should have cost Y.” Almost invariably it’s because the cost of collecting, preserving, and getting through all these electronic documents has gone up dramatically.

Von Hoene: And it’s going to be interesting to see in the aftermath of things like WorldCom whether tensions develop between the outside firm and the inside counsel with regards to how comprehensively you do this …

For inside lawyers and law students interested in being in-house someday, what makes a good general counsel?

Findlay: The career path into an in-house job is more complicated obviously than the career path into a firm … Very few places of which I am aware of hire directly out of law school. We don’t.

What we tend to do is find someone either at another company or who is at a point in a law firm where they want to make a switch to in-house. If you are a person in a law firm who wants to go in-house, there is a lot of word-of-mouth involved, a lot of watching the Law Bulletin, or watching monster.com or something, and just being lucky when a job comes open and raising your hand.

Susler: My own path is, I think, very non-traditional. You hear more stories about people moving from a firm to a client, typically in a big firm. I started out doing tort defense litigation at a small insurance defense firm and then switched to doing plaintiffs’ personal injury litigation. I did mostly tort litigation for 12 years and then I got an opportunity to go in-house. I got lucky and it was through networking.

Networking is key, and keeping an open mind. And be aware that there may be more to practicing law than what you’ve done up to that point in your career. Twelve years out of law school I completely reengineered my career from tort litigator to a general practitioner not doing any litigation. And then I switched tracks and did a lot of commercial litigation, but in-house. Now I am a true generalist. There really is no one path that you can tell law students and young lawyers to do.

Von Hoene: In terms of the skills that need to be developed to be an effective in-house lawyer, I think the thing that surprised me the most coming in-house is how important it was to be financially capable. On the outside, I dealt with finance when I had a big malpractice case or something like that.

On the inside, understanding balance sheets, understanding how finance works, is part of almost everything I do. That, in part, is because you are much more a part of the business and not the hired gun. But there is an advantage to being able to hit finance running when you walk in the door — the tables that you sit at and the way you are listened to by others are impacted by that.

The other thing that I think is very, very important — and this is more obvious and not unique to in-house — but there are lots and lots of people who have great skills out there that are available to us. I’m sure all of you get resumes with an amazing degree of frequency.

Judgment is the quality that differentiates a great lawyer from a good one. I always say my criteria for an in-house lawyer is someone who I’m not worried about if they are down in a chairman’s office talking to the chairman about a matter. That really is judgment, and it’s hard to have that right out of law school …

Susler: I would agree that judgment is key, and also a certain amount of practicality and flexibility. You don’t have that right out of law school. It takes a number of years, I think, to get that experience.

Bouldon: I agree with what everyone has said. I think the other thing that is important are the skills: diplomacy, political navigation skills, friendliness, but not overly friendly.

What I mean by that is, I think the role of the lawyer is changing, so you are there in a lot of regards to make sure that there is compliance, to make sure that certain key principles are communicated on a regular basis. So I think you do have to be close to your team and get along very well with the other members of your executive group, but by the same token sometimes, I think, the lawyer feels a little bit different.

I think there is always an extra component to the lawyer’s work because the legal issues could at any time require that you have to have a very frank discussion with the people you are closest to. I think that carries an extra level of responsibility …

It helps to be a generalist or to be open to being a generalist. I think you have to be self-motivated, the kind of person who is willing to go out there and face new challenges. I think a lot of what you do in-house, a lot of what you do as general counsel, you are charged with getting out and seeing what’s going on, putting processes in place if they are not there, tweaking them on a regular basis, keeping up with your outside counsel, keeping up with the tone of your business group, keeping up with their objectives. And you need the personality and desire to get out there and do those things and be the self-starter that you need to be.

Last, but not at all least important, on my list is mentoring. You need a mentor, in my opinion, to really achieve these types of positions …

Findlay: Communication skills are critical. You can’t talk with business people the same way you would talk to lawyers. You can’t assume knowledge or assume that they want to hear all the blow-by-blow of a particular matter or a particular contract. They have a fairly simple business problem and you’ve got to be able to communicate to them what the issue is, what the risks are, and what your recommendation is in a are very straightforward way.

I think if there is anything I would fault both outside and in-house lawyers for is, when you put them on the phone with your CEO or with another business person and they start throwing out the legal jargon … They are providing lots of unnecessary detail and none of the basics of a matter that the business person is really interested in or needs to act on.

Von Hoene: I was a trial lawyer before being in-house and I thought at one point that this is a particularly ill-suited background for being in-house because so little of what we do, relatively speaking, is trial work. And it’s an extremely useful background because our job as trial lawyers is to simplify, and to have a theme, and to enable people to understand complicated things, communicated in an understandable fashion. And that really is a great skill to have if you are able to do so. It is a background that is useful from that standpoint.

Doohan: That is a wonderful thing about law. All kinds of backgrounds are very useful. I was a university professor, and distilling a complicated subject such as natural sciences, into ”it’s this and this and this,” and illuminating it for people, I find I use those skills all the time.

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