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In-house for initiative

10 December 18

The changing face of in-house legal teams, and innovations they have brought to their organisations, were the theme of the first in-house round table held at the Society

by Peter Nicholson

In-house lawyers as proactive drivers of change, and experiences delivering innovation within their organisation, were the main themes at the first in-house lawyers’ round table organised by the In-house Lawyers’ Committee.

Chaired by David Bryson, ILC vice convener and senior legal counsel at Baillie Gifford & Co, nine solicitors from the public, commercial and third sectors shared how their teams, in differing ways, have become, and may indeed be expected to be, promoters of change.

“I’ve been in-house for over 20 years,” remarked Christopher Morgan, solicitor at The Weir Group, “and the in-house profession is drastically changed in that time. That’s a reflection of the calibre and intellect of the lawyers who have gone into the in-house environment.” Whatever the sector, “If you’re the sole in-house lawyer or in a small team, your skills are drawn on by the business in all sorts of areas so inevitably you are proactive and you’re seen as such by colleagues.”

From a newer business, Andrew Farquhar, legal director at Skyscanner, observed: “We were the first lawyers the business had recruited and I suspect they didn’t quite know what we’d do beyond the usual stereotypes of courtrooms and contracts.” Over time his team has attained a unique position of visibility across the business: “We’re always horizon scanning and looking out for opportunities as well as risks. We’re in a unique position where we can help pull the business together and focus minds on opportunities for innovation when others in more specialised or siloed departments don’t necessarily have that bigger-picture awareness.”

“That’s a really good point,” agreed Leigh Chalmers, director of legal services at the University of Edinburgh. “We’re advising across the whole spectrum of the university which is massive; we are able to spot connections and pull things together and innovate in that way.” She set out to build a team that was a proactive driver for change: “I didn’t want to be a passive provider of legal advice because, let’s face it, they can get that from paying externally, but a key professional piece of the university, providing input not just on legal issues but on strategy and commercial outlook.” Hence it was key to have input into the governing body.

Efficiency savings

From a longer-established team, Suzanne Ross, principal solicitor at Midlothian Council, explained how in-house had gone from two solicitors five years ago – “Pretty much all of our work was firefighting; everything was external” – to eight today, after they convinced the council that taking on extra staff and bringing matters in-house would produce big financial savings.

How did they achieve that, Bryson wondered? “Lots of reports to management, because it all came with a cost.” Basically, presenting a business case, including what other councils were doing, the structure and what roles people would have, and how department budgets would be adjusted, all backed up with an accounting of how many hours of each category of work were done by external solicitors, “so when we had the economy drive and they had the figures in front of them there wasn’t really much to argue with”.

For Fiona Coyle of Scottish Power, innovation is a question of organisational culture. In her company it’s going on everywhere, “so it’s not seen as unusual for legal to want to be doing that in their own space, in fact it’s kind of expected”. Relatively new to the business, she identified things that could be done more efficiently, and found a receptive audience. “I think we’re quite lucky as a legal function that we’re within that environment... Don’t get me wrong, everything’s got a cost-benefit analysis attached to it, but the benefits are appreciated a lot more because the business does it itself every day.”

But don’t undervalue the importance of being a reactive supplier as well, Chalmers cautioned. “A lot of organisations still need that reactivity – legal team, there is a problem, how do we fix that? – and feel confident that there is a safe pair of hands.” Some people are more comfortable doing that kind of work than the strategic thinking; you need both types, and to play to people’s strengths.

From Glasgow City Council, executive legal manager Jen McMartin sees both sides. Her department has “nuts and bolts lawyers, whose skills lie in analysing legislation and giving advice on it. I couldn’t think of anything worse!” Others do more project management, but both sides are equally valuable in an in-house team; and “We have a legal team now who need to be intrinsic to anything the council does, so any big projects that are coming along will have legal, finance, comms, and corporate governance representation and that’s how we operate strategically. We’re there to contribute our experience of other projects, what has and hasn’t worked well, but also a lot of our skills are quite commonsense: you need to know the law but equally we all have commercial skills or rational thinking skills. You can barrier bust a lot of the time.”

Controlling demand

Like Midlothian, Glasgow has brought a lot of work in-house from being outsourced. But McMartin added: “We’ve gone from being seen to be a barrier – ‘Don’t send it to legal, there’ll always be 10 different answers, or you’ll never see it again’ – to almost becoming a victim of our own success in some ways because we’re now seen and respected.”

Bryson picked up on this. “So now you’re getting snowed under. How do you ration the work in that situation?” McMartin didn’t have a complete answer, but does drum the mantra “That’s not your job” into the team if it’s something the client department should deal with.

Ross backed her up. “When we ask whether they have run the problem past their team leader or senior management, we sometimes hear ‘Oh, I just thought I’d pick up the phone to you.’ While it’s great that they feel we are approachable, we do have to be mindful of our workloads and generally ask that they approach their managers first.”

Chalmers suggested: “Another good way to help that is building the right relationships and networks within your organisation. That’s quite key for us, knowing which area of the network deals with this so we can redirect.”

Mhairi Maguire, sole in-house lawyer at charity Enable Scotland, tries – like her chief executive – to operate on a “no surprises” basis: “My take is very much ‘make me aware if there’s something I might need to know about, and I’d rather you tell me now and don’t mention it again, than I get a phone call at half past nine on a Saturday morning saying, guess what just happened’.” Being represented on all the organisation’s senior leadership teams means “you have that culture, that network, and you can operate on the basis that you have visibility of what you need to”.

For a large organisation like RBS, commented Leigh Kirkpatrick, solicitor in its Outsourcing, Technology & IP team, there is also “something to be said for having a well considered and consistently implemented operating model,” with each part of the business being clear on its set of responsibilities, “and abiding by that model so you get used to that particular rhythm. For us there’s been a lot of workaround empowering stakeholders, freeing us up to focus on the top tier of high risk, high value issues”.

A better use of time

Discussion turned to particular experiences of innovation, with Bryson asking for examples.

Morgan had helped introduce an AI-based contract review system into the business. The legal team didn’t have the resource to look at every business contract, but consistent risks and issues were arising, and the new system could scan documents, identify key words and phrases and apply a traffic light risk rating to each contract reviewed. Amber ones are referred to the relevant business for further review, and the legal team only looks at the reds – perhaps 10 out of 500 contracts a quarter. The system and software are still being developed, but it “hopefully drives the right risk behaviours and at some point in the future it probably saves money”. They have also used the output to provide sector training.

Coyle is using data to similar ends. “A lot of activity by the legal team can be very wasteful, and by tracking the trends and working out where you’re wasting your time, for want of a better phrase, and automating that and making it more efficient, it frees you up to do that big picture thinking which is where you can really add value. Not by reviewing the same style contract over and over just to check no one has slipped something funny in it.”

The Skyscanner legal team used in-house software engineering expertise to develop a business-facing knowledge base. “We identified the common asks we get from people,” Farquhar explained, “and the key information or guides that we wanted to make available, and we turned that into a whole suite of content in an automated and easy-to-use system, which is a real benefit for a global business.” Again, it allows the team to redeploy on other things.

Kirkpatrick also is embarking on a contract automation project, by document assembly. “It should help from a resource perspective, but it also covers risk in terms of us having to update a pretty large precedent suite.” One of their debates is whether to engage an enthusiastic startup company or the processes of an established legal firm.

In financial terms, Morgan’s account of introducing e-billing for external advisers came top. “The headline was it took about 14% off a lot of our invoices because we were being charged for costs like standard photocopying and various unapproved ancillaries. Going through law firm bills and scoring out unapproved disbursements didn’t seem like a good use of my time, so we did this and we were able to show robust and regular savings to our finance director, without having any impact on resource. It costs about £40,000 a year for this software but on a global basis it saved £40,000 in month 1 alone.”

Final thoughts

Asked about non-financial ways of adding value, the panel offered being able “to get really close to our stakeholders” and provide “proactive advice” (Kirkpatrick); “trying to make the lives of our frontline staff better and enhance their working environment” (Maguire); where the regulatory framework is unclear, “having the authority and responsibility to make a decision on the risk and how to deal with that, through knowledge of the business and the situation” (Farquhar); having “the space to exercise commercial judgment which private practice is not necessarily providing” (Chalmers); and “speed of execution” as compared with sending something externally (Bryson).

Coyle concluded: “There’s a massive amount of job satisfaction working in-house. You’re living the business’s problems and trying to help solve them, so when you get to the end of a project there’s a team element to it; you just don’t get that in private practice. It’s not a cushy life but you get so much out of it.”

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