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CCCA_V3No1_Dept-Performance-FIN.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 1/21/09 2:43 PM Page 11 Riding out the recession Performance In The Law Department General Counsel in the bunker? he global economy has been under nature of the economic relationship with regulatory making up part of the remain- Tsiege for months. Companies and the company’s preferred law firms. der. Significant transactional work is rarely governments have seen their agendas in-sourced, but co-counselling arrange- and time frames compressed. Most of 1. In-sourcing. Planning and budget ments with law firms are on the rise. the focus is on improving liquidity. cycles are usually completed 3-6 months The state of the economy makes it a Revenues are down and will likely stay before the beginning of a new fiscal year. good time to shop around for lawyers there for a good while. It follows that It is unusual to propose the addition of leaving law firms and companies that are “cost centres” such as law departments permanent staff (lawyers) outside the nor- cutting back. For those departments that will be subject to company-wide stric- mal planning cycle. However, these are cannot secure approval to add permanent tures to minimize discretionary spend- unusual times and likely to remain so for positions, there is the option of creating ing, even for items that are in the several years. full-time contract positions. The savings approved budget. In-sourcing legal work seems like a sim- are not as great in the long run, but it There are few developmental initiatives ple solution on the face of it, but there are becomes possible to attract specialists and available to the law department if the a few conditions. First, the company’s survival is in question.Yet the projections for the stream current difficult circumstances should be of work must indicate Operating a small or large enough volume at an inter- regarded as an opportunity for the gener- complexity for a 2–3 year“ al counsel and a justification to move mediate or senior level of department from the ahead now on programs and operating bunker does not add value to protocols that were considered too dis- period. The break-even ruptive or too risky in better times. point is to in-source at least the company and its clients One response of the General Counsel 600 hours of legal work per in critical times. is to “retreat to the bunker” — to operate position that would other- defensively. Operating a small or large wise go to law firms. ” department from the bunker does not add With the exception of value to the company and its clients in insurance companies and most levels of senior practitioners at 60% of the cost of critical times. government, there is rarely a business case retaining a law firm, mostly because inde- There are three areas of opportunity in to in-source litigation. Labour and pendent contractors operate with virtually turbulent times:in-sourcing legal work and employment work is now a more visible no overhead costs. ISTOCKPHOTO using contract counsel, changing the pat- part of law departments.Commercial work 2. Change usage patterns. Few depart- constitutes up to 70% of the legal work terns of use of the law department by the ments have written protocols on when done by corporate legal departments, with company’s business units,and changing the PRINTEMPS 2009 CCCA Canadian Corporate Counsel Association 11