Why do companies hire in-house counsel? Why not work with law firms and litigators?
An in-house counsel is often considered the ‘jack of all trades’, taking care of all legal issues which a corporate house may be facing.
In a given day, an in-house lawyer may have to handle anything that the business may throw at them, and it is hard to predict what that could be as a company expands.
For example, an in-house counsel may handle competition law dawn raids and defend a patent infringement suit on the same day while coming up with a new ESOP policy for the organisation.
They need to advise the board on corporate governance and future acquisitions with equal elan and also answer questions about criminal liability arising out of a cheque bounce allegation or GST goof up.
In fact, knowing the law of one single country is rarely sufficient. You may have to negotiate contracts that have to be enforceable in a different jurisdiction or comply with the local laws of a city you have never even heard of before because your sales guys landed a big client there.
You may have to comply with anti-bribery or data protection laws in 12 different countries because you have investors there or just a handful of clients. Therefore, you have to be quick to study.
And you need to also draft and negotiate agreements like a champion, apart from managing litigations in different courts, where the local litigators are not particularly cooperative. It is your job to ensure that things do not fall through the cracks!
There are four most important types of work that in-house counsels have to do – contracts, compliances, policy advocacy, and litigation.
Contract drafting:
Contract drafting is the most important and intricate skill that is required in any field and firm. A massive chunk of work that in-house counsels have to do involves either drafting, negotiating or enforcing contracts. Being good at contract drafting and negotiation automatically ensures that you are instrumental and ultimately indispensable in an in-house legal team.
Compliance:
This is another critical area of work that cannot be compromised at any cost. Having good knowledge of statutory compliances will make you an attractive hire for in-house legal departments. This is the reason that Company Secretaries are preferred for an in-house legal team job in a company. A job profile of a CS is all about compliances and regulatory work. Doing the CS course is not the eligibility criteria, but you must know about compliances. It is a relatively easy skill to pick up and valued quite a lot.
Policy advocacy:
It is increasingly becoming an essential area of work for top-level in-house lawyers. You have to engage with the government, politicians, and bureaucrats and put across policy positions that would be important for your company. You might also have to lobby for or against policy changes that may impact the future of your business.
Not all companies have policy work for in-house teams. However, industries like tobacco, alcohol, transport, insurance, fintech – which are highly regulated, policy work is inevitable.
Litigation & Litigation Management:
This is the other major area of work for in-house lawyers. While they cannot appear before courts themselves, they often manage litigation in different courts and instruct the litigators on their plan of action. They may draft documents, strategize with assistance from outside counsels and make critical strategic decisions.
Sometimes in-house lawyers may be hired for a specific skill or specialised work too. Work like acquisitions, or negotiating loan transactions, handling consumer litigation, labour and employment law or recovering money through the IBC are some of the expertise that is valued in a lawyer.
Many would say that it is far easier to work in a law firm in a team that has a single-minded focus on one practice area only. It takes a very different bend of mind to deal with this kind of mind-boggling complexity that every in-house lawyer is expected to handle.
Generalist vs. specialist in-house counsels
Who is a generalist In-house counsel?
A generalist in-house counsel works on a variety of matters. The in-house generalist is required to handle 10 to 20 different matters at once. The work he/she gets is a blend of almost every legal issue that a company may be faced with. It depends upon the type and size of the company, the industry sector, the size of the law department and its reporting structure, and counsel’s own set of skills and experience.
Some of the issues which an in-house generalist may get to work on are:
- Legal advice on various transactions
- Ensuring compliance to all laws that apply to an organisation
- Drafting and reviewing agreements ranging from procurement to software licensing.
- Drafting, reviewing and updating employee handbooks, policies etc.
- Managing any litigation against the company as well as instituted by the company. This includes briefing the arguing counsel, conducting legal research, drafting plaints and written statements etc.
- Reporting, tracking, creating an MIS and dashboards, maintaining various kinds of compliance calendars and assisting senior executives to take important decisions
If you are someone who is looking for a mix of work, then this job is perfect for you. Becoming an in-house counsel gives you the opportunity to:
- Work on varied assignments;
- Work on transactions from beginning till the end and not only be associated with a particular part of it;
- Understand the functioning of the business and the intersections of business and law.
Usually, companies would engage a law firm or a litigator for specialised work.
However, these days, if a company has a lot of work with respect to a specific area on a very regular basis, it may hire a specialist lawyer for that role in its in-house team.
Another example: let’s say your company regularly raises finance from banks and NBFCs for various projects.
If you have 7-8 such loan agreements and security documents to work on for the next one year, it may be more cost effective to hire a specialist banking transaction lawyer rather than pay law firms for 8 such agreements, which can easily run into 20 lakhs!
It makes sense to grow an inhouse team when you know this kind of work will get repeated. You try to take a systematic approach.
Similarly:
- a media/fashion/gaming company which witnesses a lot of frequent online infringement may engage an IP lawyer to handle such cases.
- In this age of corporate transactions, companies merging or acquiring other companies is common. Having a team which specialises in the legal aspect of mergers and acquisitions is important. An M&A lawyer may be hired if serial M&A acquisitions are contemplated.
- Real estate companies and big construction companies typically hire real estate lawyers to address any legal issues they may have in this regard.
In such cases, companies find hiring specialists in-house in some cases more cost effective and efficient rather than instructing outside specialist lawyers.
Sometimes, companies may also hire individual lawyers on a retainership basis for such specialised work rather than going to large law firms.
In short, companies are cutting their legal costs when they hire specialists.
Should you become a generalist or specialist?
In-house lawyers do not do the same work as law firm lawyers.
Law firms lawyers need super specialisation these days but in-house lawyers need a more general understanding in most cases.
Although in-house departments are now hiring both specialists and generalists, it is a huge advantage if you are a generalist.
Being a generalist also gives you more opportunity to get wider exposure, so that in future you can pick an area of your interest and specialise into it if you want to.
If you are starting off from scratch, it is a great idea to begin with a generalist role.
Being a generalist will also enable you to have the widest set of future career opportunities open to you.
If you aspire to become a general counsel (also known as legal head or legal Vice-President) or a global general counsel some day, then it is best to be a generalist.
In-house counsels at senior-most levels are always generalists.
If you are already a specialist, it is a good starting point, but you can become a generalist once you learn the different kinds of work that is performed by an in-house counsel.
If you restrict yourself to being a specialist, you run the risk of getting pigeonholed and may not progress to be the GC one day!
However, if you start off as a generalist and wish to become a specialist later on, you can always do that.
You can also change industry sectors as an in-house counsel, or even move to a law firm or start your own litigation practice if you choose to specialise later.
For example, top law firms in India frequently hire in-house counsel from banks for their banking and finance practice, because they have worked on hundreds of banking and finance transactions.