The Bizzle

"Saving your ass since 1999"

An out houser’s experience of an in house lawyer

I’m proud to present a guest post from Steven Mather, a disputes lawyer with 3 years PQE. He was made redundant in July and is now freelance/consulting. He is also an accredited mediator. 

You can follow Steven at www.twitter.com/smather21, and visit his website and blog at www.smather.com.

In Legal Bizzle’s absence I thought I’d write about an experience I had with an in house lawyer while I was working in practice which, as the Bizzle will tell you, might well be a familiar story for the in houser – lack of communication, managers trying but failing to deal with legal affairs and costs escalating because the in house GC (stands for general counsel) wasn’t really dealing with something. 

Firstly though, thanks very much to The Bizzle for letting me guest post on his blog while he “deals” with another enormo-contract (it’s only 400 pages… pft). I say deals with, because I have a gut feeling he won’t be dealing much at all, he’ll be told by the opposing lawyer that there won’t be any changes to that and that while “he takes the point” the clause will in fact remain the same. 

Right let’s get on with the show. 

I used to do quite a bit of work for a well known retailer and was instructed on a claim against a developer of a new unit for, amongst other things, a pretty small (£150k) loss of profits claim. I was instructed after it became a bit too much for my property department to deal with, around Jan 2008. 

I had several meetings with finance bods and surveyors at the company to get to grips with the claim itself. The surveyor guy, whose shop it “was” (ie under the control of) was running the show and he was my client contact. 

I say contact. The trouble is it would take weeks and months to get facts and figures, documents, response to letters in, approval for letters out. 

I tried my best to progress matters, eventually arranging a round table “without prejudice” meeting at my offices in Summer 2009. That went really well and we got an offer to settle of £30k. My instructions, from Mr Surveyor, were that we would not settle for anything less than £100k. So away the parties went. They had more questions which we felt it appropriate to answer, although this led to more delay seeking instructions. 

Although there were no immediate limitation issues, it had been going on for several years without any real movement. My advice was to try mediation or issue proceedings but i had nothing back from surveyor guy for a month or two on these points when out of the blue, Head of Legal wants a meeting with me and my supervising partner to understand why £10000 had gone out of budget on a case from 2006 and we weren’t getting anywhere. 

Well, it wasn’t quite like that, but how do you tell him that surveyor bod is ‘kin rubbish? 

The simple fact is, we were never asked to report to legal, just bill them. I incorrectly assumed reporting was being done internally. 

So, we trot along to the offices for our reprimands (“big client, keep them sweet”) – didn’t get any biscuits – and present the facts of why we are where we are, what our advice has been from day one and what to do moving forward. 

Head of Legal agrees. Phew, that was easy. 

So, I start to prepare reasonably complex particulars of claim, ready disclosure, send to opposite side with a WP letter saying what we’d accept. 

A week and a half later, before proceedings were issued, I get a phone call from Head of Legal saying he’s spoken to his opposite number and reached an agreement (which was a rubbish deal) and that he’s drafted a settlement agreement could we just check it over for him. 

And that was it. A case that I’d worked on for 18 months, delayed massively by surveyorman, had been resolved by a simple phone call. Had we been told at the beginning that they would be happy with that result, not given an almost entrenched position by the surveyor, and dealt with head of legal (or someone sensible) to start with, then I’m sure it could have been resolved much quicker than it was. 

The problems here were that it was only a very small claim for a company that usually deals in millions. The legal spend would then have been very small too. So perhaps it wasn’t picked up by their legal team. Perhaps we should have ran things by Head of Legal anyway (we didn’t really do their dispute work for them, large city firm usually did, so perhaps we hadn’t agreed correct protocol). 

Or perhaps their Head of Legal had his head buried in an enormo-contract and left it to someone else to deal with. 

Anyway, the moral of the story is, if as a In Houser you don’t do a job yourself, it will turn to shit. 

Like this blog entry.

Cheerio!

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7 responses to “An out houser’s experience of an in house lawyer

  1. Pingback: Tweets that mention An out houser’s experience of an in house lawyer « The Bizzle -- Topsy.com

  2. Filemot February 24, 2011 at 7:40 pm

    A sad tale nicely told. Hopefully some of those prioritising in-house counsel will take note. Of course, I doubt that there are many legal departments signing off bills any more without knowing who is instructing and why. In your next legal job – and I hope you get one – make sure you have the direct line of a suitable lawyer in the in-house department and a good relationship with him or her so that you can drop hints when necessary. Spend the client’s money like it was your own. There are no partnerships now in the outhouse law world and if you want to be a lawyer then why bother owning the business – let the managers manage while the lawyers provide legal services that their clients want. Aiming to be a good lawyer rather than aiming to be a partner is very liberating.

  3. Gavin Ward February 24, 2011 at 8:05 pm

    Sounds rahter BabyBarista-esque with Mr Surveyorman and Head of Legal making appearances. Interesting stuff Steven! When £150k is pretty small to me also I’ll be a happy man 🙂

  4. Botzarelli February 24, 2011 at 8:29 pm

    Nice article. I spent 3 months in-house on secondment at a major retailer (possibly the same one) in 09 and the story sounds a familiar one. At that particular retailer they “prided” themselves on the effort they made to integrate their panel lawyers, requiring every fee earner from the 3 firms who would be authorised to do any work at all for them to spend a week at hq as induction. In a way it was nice that externals got direct business client contact, but it meant that the in-house legal team neither knew nor cared about what you were doing unless someone complained about you. Or, when they (as a business whose low costs and prices are their major selling point) after six months realised that their legal spend had doubled.

    As 2 of the firms got pushed off the panel in a scramble to make it look like the legal team was acting to control costs this shows that it is dangerous for externals to assume that a client in-house team that has signed off on all estimates and purchase orders will have done so while managing you, their clients or budgets.

  5. Tom Kilroy February 24, 2011 at 10:49 pm

    Stephen. A frustrating experience, clearly. It leaves a bad taste in the mouth for everyone if people walk away thinking “they mishandled the case” and “I could have done the job if only they’d paid attention”. But I have to say, I’d have done the same as this GC and shut the case down. The important thing for a GC is never to fall in love with a case (or with a deal). For a business, a case is always a means to an end, usually money or opportunity. If the investment in the case makes no sense, because of time or cost, people like me will kill it, no matter how hard everyone has worked.

    On another point, I’d really encourage all of us to consider carefully this “in” versus “out” positioning. 30 years ago, the “Chief Financial Officer” in companies was a much more junior position. Now, they reign supreme in the Boardroom. Deloittes and PWC are each $27 Billion businesses. Even the largest law firms are a tiny fraction of that size. Those two facts are not unconnected. As a profession, we are tied together more than we know.

    Thought provoking stuff. Glad you posted it.
    Tom

  6. legalinhouser February 25, 2011 at 10:39 am

    Interesting article. We tell all our outside counsel that they must inform us if they get instructions that do not originate from our department and have informed all local management that they do not have authority to instruct or appoint outside lawyers without first talking to the legal team. Its a message that has to be repeatedly enforced.

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