A Practice Transformed

At the close of my last semester in law school, Professor Gary Gilden said that he hoped that we would be able to come back to him at our 20th reunion and be able to say that lawyers can be human beings too. At the time, I thought that was a curious remark because, of course lawyers are human beings- why would anyone think otherwise?

After practicing for several years, I started to understand his point. The practice of law can in certain respects be alienating. Maybe that’s the dark side of the “back stage pass” metaphor from a few posts ago. The practice of law can breed an “otherness” that can create barriers to communication; the law’s analytical approach can lead one to lose touch with the richness of human emotion and even with one’s own personal feelings; and there is also a frequently adversarial and disputatious aspect to the profession. Plus, while the law is a necessary handmaiden to business, lawyers are often cast in a supporting role and not primary players. All this can lead to malaise about law as a career.

An antidote for this perspective can be found in Steven Keeva’s book, Transforming Practices: Finding Joy and Satisfaction in the Legal Life. I read this book shortly after it was published ten years ago, and it re-energized my legal career by emphasizing that law can be a helping profession. Keeva makes the point that making your livelihood in law can be quite satisfying when you build a practice around your inner values. If there is one book that I would recommend to all those hearty souls across the US who just completed their bar examinations this week, it would be Transforming Practices.

So, to Professor Gilden I tender my thanks for posing the question and I offer my answer some 20+ years in the making; that although it may take a little extra effort, even lawyers can be human beings too.

Colleagues vs. Clients

I was reminded after last Friday’s post that another distinction between inside counsel and private practice is that for in-house counsel your clients are your co-workers. That may seem like an obvious distinction, but it makes a crucial difference in how legal advice is provided and received.

A few years ago, I attended a Practicing Law Institute seminar in NYC where Ben Heineman, former general counsel of GE, spoke about how he encouraged his law department to refer to their business partners as colleagues rather than clients. I think that’s a great idea because it reminds that both counsel and colleagues are in the same boat and need to be rowing in the same direction. Using the word “colleague” avoids the sense of otherness that the word “client” imparts.

Yes, in-house counsel do have certain ethical and professional obligations that can go beyond the corporate work relationship, and yes, I do sometimes use the word “client” with my team to remind them that we are performing a service function, but I like the distinction that Heineman makes.

This is a variation on what I sometimes refer to as the “pronoun problem.” On more than one occasion, I have seen a junior attorney tell a colleague, “you have a problem that you will need to fix” when it should nearly always be “we have a problem that I can help you fix.” All members of a business enterprise, lawyers and non-lawyers alike, share an identity of interest. Using the word “colleague” neatly captures this idea.

Inside and Out

To a casual observer, the role of in-house counsel and outside counsel may seem identical. Both provide legal advice to an entity, one on an ad hoc basis, while the other is employed full-time. This perspective, however, misses the very real qualitative differences in the roles. Lawyers often don’t appreciate that inside counsel approach problems in a fundamentally different way than outside counsel. This disconnect is, in my opinion, one of the primary causes of dissatisfaction with outside counsel.

Cost vs. revenue- In a firm, the lawyers are the revenue generators; their value add, whether measured in billed hours or clients retained, is the raison d’être for their entire enterprise and the infrastructure of their business is built to support their efforts to achieve this value. Inside law departments, however, are cost centers, and don’t usually have the same support systems. As such, in-house counsel must approach their role with a mindset that puts a premium on economy, efficiency and ingenuity. Yes, I know that inside counsel can generate all sorts of metrics to impute dollar values and returns on investment and that they often do drive revenue (as least in a supporting role); but the simple fact is law departments must continually justify their value rather than having it taken for granted. Personally, I view this burden as a blessing because it forces law departments to be more creative in developing service delivery models.

Proactive vs. reactive- Outside counsel typically is made aware of an issue only after it has ripened enough for the client to believe it merits legal attention. In many cases, the issue will be over-ripe or even rotted. The best part of working as inside counsel is that the deep intimacy with the business allows us to see around corners and to head off issues before they become big problems. It is imperative that inside counsel cultivate this proactive mindset, otherwise the corporation might as well save the salary costs and simply engage outside counsel on an as needed basis.

Deciding vs. opining- While outside counsel can make handsome livings offering opinions, inside counsel must translate those opinions into decisions. While opinions can be nuanced and multifaceted, decisions are usually rather binary. To the extent that outside counsel can assist with the deciding process, as opposed to the informing/opining process, their value to in-house counsel will grow immeasurably.

Generalists vs. specialists- The old saw has it that a generalist knows less and less about more and more until they eventually know nothing, while the specialist knows more and more about less and less until they eventually know nothing. In-house lawyers tend to be on the generalist side of that equation, so must be highly attuned to when they should reach out to the specialists.

I’d be curious to know if any readers see other distinctions between private practice and in-house law.

Moonglow

It's a brilliant surface in that sunlight. The horizon seems quite close to you because the curvature is so much more pronounced than here on earth. It's an interesting place to be. I recommend it. – Neil Armstrong

Forty-one years ago tonight, my parents woke me up just before 11 pm and I followed them downstairs to our back porch on a humid summer night to watch Neil Armstrong set foot on the moon’s surface. Being six and half-asleep, I didn’t fully appreciate the significance of the moment at the time, but now am thankful that I was able to see one of the crowning achievements of the modern era. It seems a shame that nothing in the last four decades has been able to capture the public imagination in the same way. Is our society too risk averse or politically fractious to make such an effort today? I hope not.

While no manned space flight has reached the moon since 1972, the law has made its attempt to visit. In 1979, the United Nations Office for Outer Space Affairs promulgated the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, also known as the Moon Treaty. This treaty states that the moon should be used for the benefit of all states and purports to prevent altering the environment of celestial bodies or claiming ownership over any territory of celestial bodies, and further requires that any mining or other resource extraction be made by an international organization.

Despite its lofty aims, the treaty has remained rather earthbound because no nation that actually has a spaceflight program has ratified it. For some reason, I think that’s a good thing.

Hiring Outside Counsel

I’ve been asked by my team when I recommend for us to engage outside counsel. I have a bias to handle as much as possible with our in-house staff. That said, there are times when the novelty, complexity or importance of an issue merits engaging special expertise. As a general rule of thumb, I will engage outside counsel when we need certain skills, scale, access or coverage that the in-house department can’t supply.

Skill- While I cultivate attorneys who are experts in certain areas of the law, no law department, certainly not a small one, can be expert in all areas. Just as with medical specialists, so it is with lawyers, sometimes you simply need a world class opinion on an unfamiliar topic. Keep these experts in your Rolodex (do I date myself? perhaps your email list), their knowledge is worth the cost.

Scale- We also reach out for outside counsel to ease resource constraints during peak demand periods. This resource smoothing can be achieved through a combination of paralegals, temps, contract attorneys, and the occasional secondment. But there are times when, as Stalin said, “quantity has a quality all its own,” and you will need to hire a firm that has enough personpower to send squadrons of resources “over the top,” perhaps in response to a regulatory audit, a civil investigation or a sizable litigation.

Access-Sometimes you need to pay for “access.” By that I mean you may have a need to hire the former Attorney General or other influential figure when you categorically need to be taken seriously by whatever constituency you need to persuade.

Coverage- Outside counsel can adopt an independent view that can make unpopular decisions more palatable and also can offer an ostensibly neutral sounding board against which to test new ideas. This is a valuable role that often cannot be performed by in-house staff who may be caught up in the context of company culture.

I’d be curious if readers have any other criteria for when to hire outside counsel.

On Litigation

When it comes to litigation, I subscribe to Voltaire’s point of view when he wrote, “I have never been ruined but twice in my life- once when I was in a lawsuit and lost, and once when I was in a lawsuit and won.”

Despite the intoxicating rush of seeing your legal theories vindicated in open court, I’ve seen too many Pyrrhic legal victories and inconclusive resolutions to think of litigation as anything other than a last resort. Court proceedings are essentially bureaucratic dispute resolution mechanisms, and often inefficient ones at that. I say this with all due respect and admiration for the judiciary, and I acknowledge the importance to society of having dispositive tribunals adjudicate disputes in a procedurally unbiased manner. In the vast majority of cases, however, litigation entangles the participants in an expensive and lengthy journey that often leads to an unsatisfying end. No better example of the futile drone of litigation exists than the fictional Jarndyce case of Bleak House fame:

Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. The parties to it understand it least, but it has been observed that no two Chancery lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises. Innumerable children have been born into the cause; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce without knowing how or why; whole families have inherited legendary hatreds with the suit. The little plaintiff or defendant who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled has grown up, possessed himself of a real horse, and trotted away into the other world. Fair wards of court have faded into mothers and grandmothers; a long procession of Chancellors has come in and gone out; the legion of bills in the suit have been transformed into mere bills of mortality; there are not three Jarndyces left upon the earth perhaps since old Tom Jarndyce in despair blew his brains out at a coffee-house in Chancery Lane; but Jarndyce and Jarndyce still drags its dreary length before the court, perennially hopeless.- Charles Dickens, Bleak House, 1852

On the other hand, there is the view (apologies to von Clausewitz) that litigation is business carried on by other means. This can be a valid approach, if followed with some analytical rigor; this strategy largely relies upon leveraging the process of litigation rather than seeking a vindicating result- a sort of judo-like approach to use against an opponent in furtherance of a business strategy. This tactic may be effective at times, particularly when used by clients who are sophisticated consumers of legal services (see post of June 19, 2010), but considering the transaction costs associated with litigation, it should only be used sparingly. I’d much rather spend the corporate treasure, borrowing another phrase from Voltaire, to “cultivate our own [company] garden.”

Saying No

I read that a CEO, when asked what the toughest part of his job was, responded, “saying no to close friends.” Saying “no” can be one of the more difficult things to do in life generally, but it is fundamentally critical to success for in-house attorneys. Conversely, no law division wants to be known as the “Department of No.” This dynamic requires lawyers to learn to say no in as constructive a fashion as possible.

I always say that we don’t owe clients or customers agreement with what they are saying, but we do owe them an explanation and an exploration of alternatives. Along the same lines, Steve Reynolds, General Counsel of Alcatel-Lucent, fashioned a mantra of “no… because… but” for his law department. By that he meant if one must say “no” to a particular idea, one should explain the “because” behind the “no,” and then add “but have you considered this alternative...” To me this is an exemplary approach.

Too many promiscuous “yes’s” can lead to a different sort of trouble. If a client, customer, vendor, or peer does get a “yes” from you on a meaningful issue, they should feel like they earned something of value and it should not be given too cheaply.

Most difficult of all, is to say “no” to yourself; but those no’s can be the most important of all, particularly when arranging your priorities. It’s as tempting for individuals as it is for corporations to put everything on a master “to do” list, but your “to don’t” list is just as crucial. You will be filled with many great ideas on how to change your department, your company and even the world, but your energies will be too diffuse without ruthless prioritization.

Happy Fourth

There are those, I know, who will say that the liberation of humanity, the freedom of man and mind, is nothing but a dream. They are right. It is the American dream. -Archibald MacLeish

For an overview of the history of Fourth of July celebrations, I recommend visiting http://www1.american.edu/heintze/fourth.htm, an excellent website researched, compiled, and arranged by James R. Heintze of American University in Washington, D.C.

A very Happy Fourth of July to all !