Why Are Companies Rushing to Hire In-house Lawyers?

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Understanding and participating in the vision of any company requires an eagerness to become part of something that is bigger than yourself. In the past, it was customary for companies to overlook the importance of having an in-house counsel, a circumstance which, we regard, has changed significantly in recent years as noticed. In fact, we now find that lawyers are often part of the senior leadership team in leading companies, supporting business decisions and helping to set the right legal and governance framework.

Helping to put a man on the moon

In private practice, lawyers effectively wait to be given work and they then do it to the best of their ability. Their focus is very much on learning about the legal profession as a profession. It is only as they gain seniority that they further learn about the process of generating revenue for their business. This is what enables them to acquire experience needed for an in-house role. However, in-house lawyers not only develop, implement, and monitor the elements of organization-wide legal needs, they also provide guidance and advice to all associates to ensure the success of strategies and initiatives. This makes them, in many eyes, true and comprehensive partners.

Ensuring the success of the organization, in-house counsel showcase their leadership by remaining resourceful to their colleagues and sharing useful advice. Rawpixel.com / Shutterstock.com

It is becoming ever more crucial for business lawyers to thoroughly understand the industries in which they operate in. The story of the president and the janitor aptly sums the importance of people looking beyond their specific professional goals and expertise to examine the ultimate aims of their business. In 1962, when President John F. Kennedy toured NASA headquarters for the first time, the president introduced himself to a janitor who was mopping the floor and asked him what he did at NASA. The janitor replied, “I’m helping to put a man on the moon!”

However, in-house lawyers not only develop, implement, and monitor the elements of organization-wide legal needs, they also provide guidance and advice to all associates to ensure the success of strategies and iniatiaves.

Understanding the business

It used to be taken for granted that a lawyer’s success was determined by the accuracy of the legal advice they provided and their ability to render essential legal services to various clients in different industries, irrespective of whether they understood the unique nature of each business.

However, the current arbiters of success of in-house lawyers follow a totally different standard. In-house lawyers cannot be successful unless they develop a meaningful understanding of the industry they are operating in and the business they are serving; this is why we often find in-house lawyers included in many multinational corporations’ senior leadership teams. Their role extends beyond merely providing legal services and upholding their companies’ legal framework; they are integral to business decisions, supporting top management in ensuring optimal business performance.

Internal and external alignment

Aspiring and established in-house lawyers are increasingly integral to executive leadership, addressing the need for robust corporate governance, ethical policies, risk management, and regulatory compliance amid fast-paced-market changes. Success requires deep company knowledge and a strong commercial acumen to develop tailored business solutions, not just legal expertise.

As with any successful strategy, the starting point for any in-house lawyer is a clear understanding of his or her external environment, as well as his or her internal capabilities. Externally, all companies are part of an integrated system that involves interaction with third parties, competitors, and various governmental bodies operating according to different dynamics. Internally, in-house lawyers interact with a range of functions typically referred to as “internal clients,” including sales, marketing, operations, human resources, and finance.

As with any successful strategy, the starting point for any in-house lawyer is a clear understanding of his or her external environment, as well as his or her internal capabilities.

In-house lawyers must leverage their unique skills and positions within their organizations to blend technical knowledge with a deep understanding of commercial strategies and their companies’ business models. This approach enables them to capitalize on unique opportunities and advance their careers within each organization. Building strong relationships with internal clients through the provision of insightful and dependable expertise is crucial to this process.

This all could be achieved by open communication, transparency and being honest about facts.

The challenges, however, are enormous

In my view, successful in-house lawyers must efficiently manage their own teams to demonstrate their worth. Attracting and retaining top legal talent has become crucial in a competitive recruitment landscape; however, by offering room for growth and to genuinely support the in-house lawyer’s aspiration to grow professionally and personally, you will be able to retain the best calibres. As in-house lawyers gain a voice in the boardroom, effectively managing these teams to meet leadership expectations becomes essential. Corporations are increasingly recognizing the value of including lawyers in their management teams, especially for their role in safeguarding against uncertainty and acting as trusted advisors during financial crises. This integration not only strengthens corporate governance but also solidifies their standing within their industries.

Successful in-house counsel showcase their worth by how they effectively manage their teams to be a valuable asset to the company. metamorworks / Shutterstock.com

Another that illustrates the above pertains to Christopher Wren, one of the great English architects, who one day walked unrecognized among the workers building St. Paul’s cathedral in London, which he had designed. “What are you doing?” he asked one of the workmen, and the man replied, “I am cutting a piece of stone.” As he went on, he put the same question to another man, and the man replied, “I am earning five shillings two pence a day.” To a third man he addressed the same inquiry, and the man answered, “I am helping Sir Christopher Wren build a beautiful cathedral.” That man had vision. He could see beyond the cutting of the stone, and beyond the earning of his income, to the creation of a work of art: the building of a great cathedral. The lesson to be learned is that in your life, it is important for you to strive to attain a vision of the larger task or activity you are contributing to.

The lesson to be learned is that in your life, it is important for you to strive to attain a vision of the larger task or activity you are contributing to.

Practically, any legal team should combine functional excellence with a strategic mindset to maximize opportunities for the business. The team, operating locally, regionally, and globally, must strategically partner with the business leaders by providing solutions to many issues. This includes:

  • Establishing a regulatory environment within the organization;
  • Negotiating complex deals in line with geographic focus;
  • Proactively managing litigation and internal investigations to mitigate reputation and financial risks; and
  • Generating income for the organization, through ensuring that commercial transactions are finalized and damages recovered.  

In-house lawyers must commit to performing with high integrity, adhering to both internal policies and external regulations, and prioritizing what’s right for the business they serve. Over time, multinational companies are expected to enhance their leadership by integrating more in-house lawyers, securing all business facts as outlined.

Disclaimer: the information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.