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The expansion of U.S.-based companies into foreign markets is raising the bar for in-house counsel and, in the process, creating numerous challenges. Corporations have always looked to their general counsel (GC) and legal departments to provide strategic advice, legal guidance and accurate assessment of risk. Adding to an already challenging job, in-house counsel must now provide these services on a global level, and evaluate issues of intellectual property, corporate governance and risk in multiple countries and diverse legal systems around the world.
As a result, corporate lawyers need extensive, comprehensive legal knowledge and must be able to monitor and evaluate the significance of political and economic developments in every market where the company operates. Corporate attorneys must be not only legal experts but also skilled risk managers. Today’s global legal departments must not only do much more, but they must also do it with far fewer resources. In 2006, the median legal department budget was $1.75 million, a slight increase over the 2003 median budget of $1.5 million.
Despite these resource challenges, legal departments are coming up with innovative ways to maximize their contributions and provide their companies with strategic global business advice and legal guidance. The most successful legal departments have adopted clear reporting lines, specialist hubs and seamless communication systems. They also negotiate fees with international outside counsel to achieve economies of scale.
Managing Outside Counsel Internationally
The task of overseeing and directing the activities of outside law firms on an international scale is one of the most complex aspects of an in-house attorney’s job. Picture a series of chessboards stacked vertically, with all pieces on every board in play simultaneously, and the magnitude of the job becomes clear.
For many legal departments, the process of choosing and managing outside firms in foreign jurisdictions is done remotely. To ensure success, they’ve adopted a number of strategies, including the separation of legal work into categories (commodity vs. extraordinary, for example); sharing the company’s business goals and strategies with the outside firm; researching the law firm’s capabilities and establishing expectations upfront; and viewing the engagement as a partnership.
