The legal profession, particularly for in-house counsel, has not been immune from the “Great Resignation.” This has only exasperated an already acute problem of turnover in in-house legal departments. As highlighted by Indiana Lawyer in May 2021, major companies are grappling with turnover of top in-house counsel. The search firm Major Lindsay & Africa has seen an unprecedented level of general counsel search requests since the start of the pandemic.
When a senior in-house counsel or general counsel leaves a company, outside counsel may view that as a significant risk. In reality, if done properly and thinking about the best interest of the client relationship, it can be a tremendous opportunity to establish and solidify a trusted working relationship with the new counsel and the client.
As outside counsel to several organizations that have recently hired their first in-house counsel or have hired a new general counsel, and as a newly appointed general counsel, we’ve created an outline of five value-added services that outside counsel should be providing to make the transition smoother. If executed effectively, these additional services should create a “win-win” for the client and the outside counsel.
1. Serve as interim on-demand service provider for the company until a full-time replacement is up and integrated
According to a recently published article by Axiom, the time to backfill an in-house replacement position is over six weeks for a counsel. It is over 11 weeks to fill a managerial level role in the legal function. Because of this delay in backfilling such critical roles, it is imperative that outside counsel quickly step in to provide an interim solution. The solution needs to be flexible, efficient and appropriately staffed to fill the myriad of roles that the departing in-house counsel served. Ideally, the outside counsel will offer a single point of contact that has knowledge of the client and its needs along with the firm’s resources so that the client does not have to make multiple attempts to figure out a problem. Although this will likely result in significant additional billable time, the outside counsel needs to appreciate that this is not the moment to take advantage of the situation and bill for every single interaction. This should be an investment opportunity to deepen the relationship with the business and executive teams.
2. Get involved in the identification, interviewing and recommendation of suitable candidates
Depending on the relationship with the executive team, the outside counsel is in a unique position to articulate the necessary scope and skills of the ideal candidate, which may be different than the current role. The outside counsel needs to understand where the business currently is, but more importantly, what the executive team’s expectations and frustrations are with the legal function. Armed with this information and insight, the outside counsel would be well-positioned to suggest or recommend candidates for the role. From the client’s perspective, having a trusted adviser “vouching” for a candidate provides instant credibility and potentially saves on recruiting fees. From the outside counsel’s perspective, it is critical that the client’s best interest is the priority, not who will be the friendliest candidate to the firm.
3. Serve as the institutional knowledge repository for open and ongoing matters, executive and business leaders’ personalities and company’s risk-taking culture
Once the counsel is hired, the outside counsel needs to proactively demonstrate a willingness to collaborate with the new counsel for easy onboarding. The outside counsel needs to understand that the new counsel may not have any institutional knowledge of the client or maybe even the industry. As a result, the onboarding should be considerably more than just a memorandum of current open matters. The outside counsel should be open and willing to sit with the new counsel and debrief them on institutional history and the culture of the organization and its executives. In addition, the outside counsel should assist the new counsel in understanding the risk tolerances of the organization and any significant compliance or governance concerns that need to be addressed in the short term. Finally, outside counsel needs to be mindful that the recently hired in-house counsel is likely to be addressing pent-up internal demand as well as trying to learn the company’s business at the same time. Having open and direct communication with in-house counsel about the best way of learning the status of the prior and ongoing matters and what level of detail they would like to have for such debrief is appreciated.
4. Understand the strengths and opportunities of new counsel so that firm can provide free or reduced-cost training ‘boot camps’ to ease the in-house learning curve
Hopefully, outside counsel helps the client identify the best candidate possible, but even the best candidate may still have areas of less expertise that will need to be bridged. In addition to substantive areas, it is possible the ideal candidate may be from a completely different industry and may not have a complete understanding of the regulatory and business landscape that their new employer is part of. Finally, for many private or smaller organizations, this may be the counsel’s first in-house position. In each of these scenarios, the new in-house counsel would deeply benefit from one or more intense sessions within their first weeks, addressing common issues they may face. Depending on the experience and the circumstances, employment law, cybersecurity, business outside the U.S. and corporate and regulatory compliance are all examples of topics that land themselves on the “big hits” list. This training should not be a one-day show about everything on the topic. Rather, it should be several sessions of one to two hours each, where there’s an overview of the areas of interest and experience specific to the client and the industry. It should be designed and implemented collaboratively between outside and in-house counsel. Some in-house counsel may expect these to be “freebies.”
5. Understand the appropriate and desired communication strategy so that new counsel feels supported but not micromanaged
As with any successful long-term professional relationship, understanding the communication preferences and styles is key. Because this is a relationship of peers with shared goals of protecting the client, mitigating risks and advancing the business interests, both parties, especially the outside counsel, need to appreciate the in-house counsel’s time, budget constraints and expectations. The best way to achieve this understanding is with open dialogue and candor.
Firms and outside counsel need to appreciate that the relationship with a new counsel is an investment that should not be taken for granted. Firms also need to realize that a new counsel can be stretching their time and skills in learning a new company, executive team, culture and their teams. As a result, anything the outside counsel can do to make life easier for the new counsel is appreciated and should yield a positive outcome and a long-term, trusted adviser relationship.•
Ed Broecker is a member in Frost Brown Todd’s Indianapolis office. He counsels businesses in transitional situations and has a background in corporate compliance programs. Fernanda Beraldi is general counsel and corporate secretary at Inotiv Inc. She has also served at Cummins Inc. and Embraer SA. Opinions expressed are those of the authors.