There’s a six-year-old trapped inside of me, pounding on the inside of my skull and screaming to get out. (Many of you would say that the quality of these columns proves that I don’t manage to keep the kid fully contained. Yeah, well: It’s a good thing you’ve never heard any of my jokes.)

My inner six-year-old likes to understand things. He likes e-mails and memos that start at the beginning; use short, declarative sentences in the middle; and conclude somewhere near the end.

He likes easy rules that he can understand and then immediately put to use, so he remembers the rules in the future. It was surely my inner six-year-old who developed the “one rule you as a witness must remember” when you’re having your deposition taken: “Listen carefully. Pause. Answer narrowly.” To the six-year-old’s eye, that’s the essence; “the rest is commentary.”

My inner six-year-old recently realized that outside counsel have it easy: For each entity they represent, outside lawyers typically communicate with just one person who serves as the “client.” Although the outside lawyers may meet many corporate employees, the outside lawyers view themselves as speaking to the “client” when they talk to the in-house lawyer who’s supervising their matter on a daily basis. That’s the one key point of contact.

My inner six-year-old realized that this isn’t true for in-house lawyers. In-house lawyers have three clients….

What’s my inner six-year-old’s advice for new litigators coming on board at my joint or others who hold similar positions at other corporations?

“For every matter that you’re handling, you have three clients: Law, finance, and the business unit.” That’s the essence; the rest is commentary.

For folks going in-house from a law firm, this is an important rule to hear. As outside counsel, you view the in-house lawyer as the client. So when you arrive in-house, you might mistakenly believe that you’re the client: You have the ability to settle cases; you can act independently; you know what’s best for the corporation. But that’s not true at all.

As in-house counsel, for every matter that you’re handling, you have a client in the law department. Up to your personal limit for settlement authority, that client is you. Above that level, your client may be (depending on the dollars involved) a regional head of litigation, a global head of litigation, the general counsel, or the chief executive officer. But someone in that legal chain of command — the person with authority to approve a proposed settlement — is your client.

As in-house counsel, for every matter that you’re handling, you also have a client in the finance department. That client probably plays no role in deciding whether to settle a case, because (to paraphrase Ugarte) that client has “no right to think” about legal subjects. But finance has every right (and duty) to know about money that’s going out the corporate door; by definition, finance tracks that stuff. For every significant matter that you’re considering settling (or trying), you have a client in finance. Be sensitive to possible attorney-client privilege issues when you communicate with that client, but keep finance in the loop. No one on that side of the corporate house should be dumbstruck to learn at the end of a quarter that you’ve just given away an unexpected few million bucks.

Finally, as in-house counsel, for every matter that you’re handling, you have a client in the business unit. That’s the business leader (or her designee) who is monitoring the litigation, considering the business ramifications of the case, and deciding whether the business unit prefers to spend money settling the case or to test its luck with “twelve good men and true.” The person in the business unit is the person who probably most resembles the “client” from your old days as outside counsel.

Never forget that, as an in-house lawyer, you have three clients. That’s the rule.

Sometimes I love my inner six-year-old, and sometimes I hate the kid. But he occasionally comes in handy, by giving me rules that I can understand.

I haven’t yet decided whether I’ll let the kid go to law school. That’s a subject for some other day.


Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link). You can reach him by email at [email protected].


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