Page 14 - CCCA Magazine Spring 2015

{ strategiC MaNageMeNt } In-house and outsIde counsel: WorkIng together to uphold the proFessIon By Ronit Dinovitzer, Hugh P. Gunz and Sally P. Gunz ever since scholars began writing about the differences between In our most recent study, we inter- in-house and outside counsel, there has been a strong sense that viewed over 100 lawyers at major com- 3 mercial law frms across Canada. This one form of practice can only succeed at the expense of the other. work provided deep insights into their relationship with in-house counsel. There were two trends that directly n 1985, for instance, Chayes and Chayes assistance of skilled professionals, such as refect current demands of clients. First, provided their forecast for in-house lawyers and accountants. What pressures outside counsel commonly explain the Icounsel and its effect on big law frms: do these professionals face? What leads probability of career success in terms of “… whatever the future form of the elite often otherwise highly principled indi- delivering legal services in a “business- law frm, its relation to big business will viduals to bend to the wishes of less than like” manner—they must understand and have been profoundly altered. The vast scrupulous managers? meet client needs. However, that same bulk of the legal work for America’s lead- Often subtle organizational factors af- lawyer must also be independent and ing corporations will be performed in fect how individual professionals assume willing not to deliver advice that crosses corporate law departments.” their role. In our work with in-house coun- ethical boundaries. Consider these obliga- 1 Certainly, at the time the Chayes were sel, for example, we have seen that some tions in the context of the career pressures writing, in-house counsel were often treat- counsel who become highly integrated in major law frms and the necessity to ed as the second-class citizens of the legal into management decision-making roles retain a healthy fow of billings in particu- profession, with little obvious justifca- may become more inclined to resolve ethi- lar. What happens to the ability to identify tion—but those days are long since over. cal dilemmas as would a manager than a ethical boundaries and withstand inap- 2 Both forms of practice continue to have lawyer. This appears to result from their propriate client pressure? a relationship of interdependency. Each refocusing what would otherwise be a pro- The second affects all legal service pro- must react to the ebb and fow of the econ- fessional identity to one more aligned with viders: the need to deliver advice 24/7 and omy, and how they—and their clients—do that of a manager. However, by doing so, quickly. While lawyers must be time sensi- so inevitably impacts the allocation of legal they risk losing the value that fows from tive, sound ethical decision making may services between them. Trends, however, being independent professionals—the very be jeopardized without the ability to re- have seldom been permanent. quality for which they are hired. fect and, where necessary, seek additional Our academic work comes at these is- Does that then imply it is better for the advice. Even well-grounded lawyers may sues from a rather different perspective. client to use outside counsel? We would fail to see ethical traps. For many years, we have studied the ways answer, defnitively, “no.” Instead, our From this study, we learned a number professionals address ethical dilemmas. work suggests that outside lawyers face of important lessons relevant to in-house The news is regularly punctuated with ex- their own organizational pressures, which counsel. We highlight the following six: amples of managers engaging in fraudu- may lead to equivalent impacts on ethical ■ Outside counsel are well sensitized to lent and unethical activities. Yet, for the decision making if left unrecognized and the needs of in-house counsel and the most part they do so only with the active unmanaged. client frm, and what the latter two ex- pect of them. If they don’t demonstrate 1 abram Chayes & antonia H. Chayes, “Corporate Counsel and the elite law Firm” (1985) 37 stanford law review, 278 at 300. this understanding, in-house counsel 2 Hugh gunz & sally gunz, “Hired professional to Hired gun: an identity theory approach to understanding the ethical has every right to ask why. Behaviour of professionals in non-professional organizations” (2007) 60:6 Human relations 851 ■ Outside lawyers face their own vulner- 3 For full reports on our fndings, see ronit dinovitzer, Hugh p gunz & sally p gunz, “reconsidering lawyer autonomy: the nexus Between Firm, lawyer, and Client in large Commercial practice” (2014) 51:3 am Bus lj 661; ronit dinovitzer, Hugh p. abilities. In-house counsel’s job has to gunz & sally p. gunz, “unpacking client capture: evidence from corporate law frms” (2014) 1:2 j professions & organizations be to assist in imposing reasonableness 99; ronit dinovitzer, Hugh p. gunz & sally p. gunz, “Corporate lawyers and their clients: walking the line between law and business”, online: (2014) intl j leg profession www.tandfonline.com/doi/full/10.1080/09695958.2014.977792. upon the demands of management. 14 CCCa Magazine | spring 2015 printeMps