The Bizzle

"Saving your ass since 1999"

On the limits of specialism

I had one of those OMG moments in a contract negotiation the other week, when the other side sends back a draft with changes that bear no relation to the discussion that you’ve just had. I mean, WTF, right? 

On second reading, all of the offending changes were in clauses dealing with employee issues – TUPE and so on. A quick conversation with my opposite number confirmed my suspicions: “Oh, the employment lawyer did those”. 

Not a big deal in itself, and easily fixed. But it’s got to the point now where the last words that I want to hear in a contract negotiation are “I’ll get an employment lawyer to look at these clauses”, because I know that the same thing is going to happen every time. 

For example, there was the partner from a national firm who insisted that we should be able to meet a contractual obligation to provide dedicated staff while at the same time avoiding the application of TUPE by ensuring that none of them spent more than 50% of their time on the account. Think that’s impossible? “That’s your problem”, he said. 

Then there was the associate, also from a national firm, who deleted all of the (agreed) clauses dealing with TUPE on contract commencement because he had only been given instructions about the clauses dealing with termination. And if I had a pound for every time I’ve been told that I can’t have an indemnity for pre-transfer claims because “that’s not how TUPE works” then I’d have, well, at least a tenner.

Not that I’m having a go at employment lawyers (really, I’m not). I know some great ones, and I’ve received some quality support and advice from them over the years. 

No, the target that I’m aiming at is the insistence of the large commercial firms that lawyers must stick to their specialism. Which means that, obviously, clauses dealing with employee issues must be looked at by employment lawyers.

In my opinion that’s a category error. Employment clauses in commercial contracts aren’t about employment, they’re about the allocation of commercial and legal risk between the parties. Just like all of the other clauses in commercial contracts, in fact. 

So the required specialism for dealing with these clauses is commercial contracts. By all means, a contracts lawyer should take advice from an employment specialist on technical issues like TUPE, as a sense check on the way that the parties intend to deal with the issue. But if the employment lawyer takes over then there’s a risk that the commercial understanding necessary to achieve the right result will be lost.

This isn’t limited to employment issues, of course. I once worked for a GC who tried to get us to refer all data protection issues to a former colleague of his in private practice, even though we had sufficient knowledge and experience to deal with all of the contractual and practical questions that came up.

Now, it’s no great insight to say that in house practice is about generalism and private practice is about specialism. And obviously I know that firms have to have an eye on their professional indemnity premiums, and that there’s risk in asking commercial lawyers to deal with technical issues outside of their specialism.

But my point here is that the insistence on referring all technical issues to specialists can be harmful to contract negotiations. It introduces controversy into areas of commercial agreement, and often substantially increases the amount of time it takes to conclude the process. Because of that, and because of the additional time required for file review, it also increases fees.

And, while I realise that it’s not for me to say as the lawyer on the other end of the transaction, I think that it doesn’t really help clients to achieve the right result. The main objective, after all, is to reach an appropriate commercial agreement in a cost-effective and timely manner.

So this is my plea for a little less specialism and a little more generalism. In fact, maybe private practice should be a little more like in house practice?

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3 responses to “On the limits of specialism

  1. Intelligent Challenge November 23, 2010 at 3:57 pm

    Really interesting post, and a dilemma I came up against when I was inhouse. I think you’re on point with this, although it does depend on the complexity of the issue. I’ve also seen commercial lawyers who “dabble” with employment law issue just dig themselves in a whole, and when the experts come to dig them out, then not only are their raised eyebrows, but also pointing fingers and (of course), discussions about fees.
    One of the answers is clearly to “know when you don’t know”, but also there’s a question to be asked about the law firm in terms of its internal communication and process efficiency (both areas where firms can improve in my experience!) – the use of specialists can work and it CAN be seamless, but as your experience shows, that’s sadly not always the case.

    • legalbizzle November 23, 2010 at 8:04 pm

      You’re right about lawyers who try to dabble, and this could easily have been a post about contract lawyers who get TUPE all wrong. I was thinking about this issue while I was writing the post, and in fact I think that “know when you don’t know” is even more important for the in house lawyer: you could get so used to dealing with whatever’s put in front of you that you don’t realise when you’re making it up.
      Regarding seamless interaction between specialists , I may have come across it and not realised (thereby proving its efficacy, I suppose). I certainly know some private practice lawyers for whom this isn’t an issue, and it may be that they’re interacting with colleagues on technical issues behind the scenes, and assimilating that into their own advice. I’d like to think that it’s what I would do in private practice…

  2. Steven January 2, 2011 at 6:48 pm

    Lb,

    Good post here. I wa in private practice in litigation and employment for a very small, quality commercial firm. I worked closely with the commercial team, called upon for “double checking the position”.

    All too often you the big firms show they are just plain rubbish at being good lawyers.

    Re specialism and generalism, it plagues private practice and it’s rare that you get a non commercial lawyer that can think commercially. Litigators and employment people, who I’m used to dealing with, surely rank next to conveyancers when it comes to commerciality, particularly in drafting.

    Steven

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