Changing expectation: evolution of the in-house counsel

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How the changing relationship between in-house legal counsels and law firms has impacted expectations?

The position of in-house legal counsel has been evolving across the world as demonstrated by numerous titles such as, In-House Legal Counsel, Chief Legal Counsel, Chief Legal Officer and Head of Legal, which are commonly used nowadays. As these positions have become widespread, and with the proliferation of legal departments in companies, the relationship between law firms and in-house legal counsels has gained great importance. This situation has changed the role of law firms and what is expected of them, and a new balance has emerged between in-house legal counsel and law firms.

Imposing a commercial perspective on lawyers

Taking the numerous changes of today's modern world into consideration, it can be said that the roles, perspectives and job descriptions of in-house legal counsels have been altered. Such changes, along with other various requirements, has moved the long-standing relationship between in-house legal counsels and law firms to another dimension.

Lets consider the current position in-house legal counsels have reached. In a 'globalised world', the reach that companies have and can serve has started to spread all over the world, rather than remaining in one region, while the growth rate of companies has increased exponentially. Because of this, companies can offer enormous opportunities to legal counsels for innovation, leadership, and decision-making at the highest levels - especially as companies have gone global.

When reviewing the previous ten years of in-house counsel positions, counsels have had to lead and work with almost all departments within a company. However, it is an inevitable fact that today's requirements have moved the in-house legal counsel into a position that conducts risk analysis and leads business decisions, despite our imagining of a figure whose sole duty is to evaluate legal compliance of company decisions and who abstains from directing commercial decisions. In the light of this reality, we can describe the expectations of in-house legal counsels from law firms as evolved and transformed from what once was. Law firms are expected to observe this process and keep up with today's global and modern developments.

The evolution of general counsel was examined through a conversation with the chief legal counsel of one of Turkey's leading holdings at the General Counsel Summit Legal 500. He conveyed his observations of in-house legal counsel development, while working in the same company for many years he had witnessed the profession changing according to the evolution of the opinion of legal view, from compliance for technological developments to commercial decisions. It was a great real life experience shared with all of the attendees.

Commercial perspective: evolved expectations of law firms

Expanding roles have caused lawyers to become more involved in the business world. Rather than evaluating the legal consequences of the commercial decisions taken by the company, law firms, which have the motive of efficiency, value and commercial awareness that shape the relationship between corporate identity and law, were among those preferred to be consulted by in-house legal counsels. Nowadays, the law offices that have a good grasp on the corporate memory of the represented company, that are competent in assisting the company to achieve its strategic goals for different locations in a globalising world and which can expand its visions, stand out.

With the evolution of in-house legal counsels from a figure providing only legal advice, to a complex role covering strategy and leadership. This evolution results in the expectation that counsels will drive critical business decisions by providing a legal perspective. The most significant reason for the increasing need for law firms is the growing demand for in-house legal counsels and the expansion of their job description.

We have faced numerous situations where law firm expectations have moved to a commercial dimension. For example, we made suggestions to a client who wanted to be an angel investor, about which companies he can invest in and which start-up company had a big potential. Additionally, when one of our foreign investor clients intended to become a business partner with a local company, we contacted the appropriate company and brought the two together together. These examples showcase our law firm working within a commercial dimension, analysing business needs and requirements. Besides our duty to provide legal opinion, sometimes it may be necessary to be involved in companies' business decisions.

At the Summit, an in-house legal counsel of a leading international company in the automotive sector described the filters in the search for a law firm as 'effective, solution-oriented, fulfilling the requirements in a short time'. And while these attributes increase preference, law firms, which can use their legal perspective on business-critical decisions within the scope of business strategy of the company, are in the leading role of the evaluated in-house legal counsel and law firm relationship.

If we need to give an example as per above expectation declared by the said in-house legal counsel, in agreements to be concluded between the two companies, sometimes, our intervene may be necessary to the commercial provisions stipulated in the Agreement by the virtue of our knowledge on the company's strategy. In these cases, in-house legal counsels are expected take initiative from law firms without leaving provision to a company's commercial discretion.

Those who use legal perspective in critical decisions in terms of business within the scope of the company's business strategy, take the lead role in the transformed in-house legal counsel and law firm relationship. The key issue is to understand the client's business needs and its appetite for risk. At this point, the need for lawyers who blend law and commerce, followed by technological, economic and sectoral developments, is not negligible. Being able to keep up with the fast changing criteria and definitions that have emerged in this context have made the expanding role of lawyer more business-oriented. By adopting a critical role in managing corporate risk and strategic decisions, lawyers will become the bilateral winner of this change and transformation.

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