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Sailing Through a Rough Economy: An Opportunity to Shape the Future of Legal Services

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In a challenging economy, in-house lawyers face higher expectations from their clients. On one hand, legal costs are usually seen by businesses as a strong candidate for potential savings. With that in mind, in-house counsels must navigate budget limitations through different measures, including curbing external spend.

In this article, I aim to outline how, from an in-house counsel’s point of view, law firms can provide stronger support to in-house teams. I will also briefly tackle the increasing and changing demands of internal clients and my thoughts on how in-house counsels can continue to meet, or even exceed, client expectations.

From discussions with external counsels in different countries, I see the majority are already looking into ways to align their business models with the new expectations of in-house counsels, influenced as they are by the demands of their internal clients. In-house counsel candidly sharing their ideas, expectations, and needs could further assist law firms in accomplishing this business model change.

The challenge with external spend is not only saving but also accurate budgeting. Compromising on service quality is not an option. Finance departments now insist more than ever on accurate forecasting of external legal spends. It is fair to say that many companies have been successful at navigating the difficulty of forecasting legal spends pertaining to emergencies, dispute resolution, and special projects. Nevertheless, a large portion of legal spend still goes to other types of external instructions that, from a Finance department standpoint, can be anticipated.

Law firms can, in my view, be of great assistance to in-house counsel in that respect by finding innovative, flexible, and transparent ways to reach a win-win solution. For example, an in-house counsel who is responsible for multiple jurisdictions may prefer working with a law firm that can offer quality legal advice in more than one jurisdiction for an all-in annually-revisable fee cap covering a mutually-agreed and clearly-defined scope of legal services.

In addition to receiving legal advice that is professional, practical, and provided with a great sense of urgency, most in-house counsels will appreciate a law firm’s proposition that offers value-added services, which may include one or more of the following:

  • A tool to provide up-to-date information on local law and legislative/regulatory developments
  • Contributing to orientation of new in-house lawyers
  • Designing and hosting a database of legal opinions provided to the client free of charge
  • Reasonably-priced contingent legal support during the process of replacing departed in-house counsels
  • Low Cost Centers for handling routine and relatively low value matters

On the other hand, the demands of internal clients for in-house lawyers to act as “partners” have been on the rise. Internal clients now tend to look beyond our statements that we understand the business’s strategic goals, plans, needs, and challenges, into our actions and sometimes even the way we address them (as clients or as colleagues/partners).

The key solution to meet those expectations is to, simply, to walk the talk. To listen to our clients and then make our actions a true reflection of what they expect – and not what we believe they expect. To build trust and personal rapport with our clients by showing that we truly understand the challenges they face and genuinely care for the business. To belong to the organization and not work in silos. To participate and share valuable input on general business matters and not only confine our contributions to the legal scope. To make ourselves accessible and available.

Obviously, these suggestions may not be feasible for all. The key takeaway, in my opinion, is the importance of open discussion between in-house and external lawyers as well as between in-house lawyers and their internal clients. A discussion that aims at providing an understanding of the realities of the current environment and finding ways to overcome the challenges it poses. Through that discussion, we can seize this opportunity together to modernize the way we serve our clients and ensure continued appreciation of the pivotal role that lawyers have long played in international business.

This Article was originally published in Issue 4.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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