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CCCA_V3No4_Closing-FIN.qxd:CCCA_V1No2_BackPg-V1.qxd 11/23/09 10:00 PM Page 46 Closing The Deal Building a legal department that fits your business How finding the right model creates value for the organization. ncreased in-sourcing, the growing num- Proximity counts the business unit and the GC or CLO need Iber of regulations, especially in gover- First and foremost,to best serve the organ- to communicate to find a solution. nance-related issues,and more attention to ization, in-house counsel should be physi- Then there’s the issue of retention of out- risk management have expanded the role cally located as close as possible to the busi- side counsel.One of our rules at Bombardier of in-house counsel. ness unit they serve. Organizations often is that this can only be done through the As a result, in-house counsel have have a multiplicity of business units, with a legal department, as opposed to business become more integrated into the day- multiplicity of physical locations, often units going directly to outside counsel. to-day operations of our organizations. many time zones away from head office. To be clear:the relationship needs to be Ultimately, we play a more pivotal role Creating decentralized centres of legal between in-house counsel and the exter- in ongoing business decisions than expertise can provide the most value in nal law firms and no where else. ever before. terms of day-to-day operations. This is necessary to keep the integrity One of the key challenges for legal In contrast, it often makes sense in and control of legal services. The legal departments concerns their structure. capital financing or M&A type of transac- department must determine: When will Whether your company is large or small, tions — functions that are not undertak- outside legal counsel be appointed? your legal department needs to match the en every day — to create a centralized Which outside counsel is brought in? operation and the footprint of your organ- core of expertise. What is the scope of the work? ization in order to provide the most value. Ideally, to be most effective, the entire In addition, when business people talk How do you structure your legal legal department needs to function as one with outside counsel, in-house counsel department to ensure that it not only unit, although there is not the proximity needs to be in the loop, either in the room interfaces well, but is also truly integrated factor to sustain it. In-house counsel may or copied on all correspondence.While it into the overall goals and operations of be widely scattered, sometimes around the may sound flippant, in essence, you don`t your company? globe, yet there needs to be a co-ordinated want to let outside counsel loose in the Which legal department model — cen- approach and uniformity to similar issues company, otherwise, you lose the credibili- tralized or decentralized — fits the business that surface within multiple business units. ty of the in-house function. model of your organization? The challenge for the general counsel Obviously, with a centralized legal or chief legal officer is to keep that com- Keep your eye on the ball department,co-ordination between mem- munication open and keep a proper gov- Still,whether your legal department is cen- bers of the legal department with each ernance in place while not slowing down tralized or decentralized,it is integral that it other, and with their internal clients is legal services, even though the depart- focuses on the core — and key operational fairly simple. ment is geographically widespread. issues — affecting your organization. The entire legal team is in the same Another golden rule concerns report- It is my belief that this is where the footprint, often on the same floor, and can ing lines.Whether your law department is legal department should in-source more consult with each other easily: It can be as centralized or decentralized, in a business than ever.This is where in-house counsel simple as knocking on the next door.And, model where the legal department reports truly shine.We are close to the day-to-day internal clients are within the same build- to the head of the business units, there activities of our organizations; therefore, ing or within easy geographic reach. must always be a dual reporting line. we have a window into the needs of our In contrast, the challenge in the decen- In every case, the law department must organizations that uniquely position us to tralized model lies in creating a strong also report to the GC or the CLO because, provide outstanding value. governance as to how legal services are as an integrated function,you need to act as performed within your company. Yet, to one legal team within the organization. I Daniel Desjardins is Senior Vice-President PIERRE CHARBONEAU my way of thinking, by following a few believe that this dual reporting structure is and General Counsel at Bombardier Inc. golden rules you can make it work. a must:where there is a conflict,the head of (danield@bombardier.com) 46 CCCA Canadian Corporate Counsel Association WINTER 2009