Creating A New In-House Job

This could get a little complicated...

What’s the process for deciding whether a corporation needs a new in-house lawyer?

First, the thought:  “Hey!  I think we could use an antitrust specialist!”

Then, the business case:  Would the corporation save money by hiring an in-house antitrust specialist?

Analyze what an in-house antitrust specialist might do.  That person might conduct antitrust training, oversee antitrust internal investigation, conduct antitrust reviews of mergers and acquisitions (under the Hart-Scott-Rodino Act in the United States, and similar statutes elsewhere), ensure the legality of new products and services, advise on pricing strategies and possible strategic alliances, etc.

Determine how much the company currently spends annually obtaining that advice from outside counsel:  Typically, firms kick in training for free, because firms think that we’ll hire the lawyers who came in to train us.  Maybe we pay a million bucks a year for antitrust investigations, but one in-house lawyer can’t conduct an entire investigation; the in-house lawyer might save us five percent of the cost of the investigation, so that’s 50 grand a year.  Antitrust reviews?  The lawyer could do that on his or her own, and we’re blowing 100 grand a year on antitrust reviews.  That’ll help make the business case for hiring the new lawyer.

And so on.

Then, throw in a couple of “additional advantages”:  If we have an in-house antitrust lawyer, we’ll probably consult with that person more than we do with outside counsel (because a conversation with the in-house lawyer is effectively costless).  Over time, all of our lawyers will learn more antitrust law than they’d otherwise know, and we’ll become more sensitive to the issues involved.  That’s a benefit.

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An in-house lawyer will learn our business more quickly than an outside lawyer would, because the in-house person will be immersed in the business.  The in-house lawyer will learn our business more deeply than an outside lawyer would, because the in-house person would specialize in our company.

Decide if the business case makes sense.  (The “additional advantages” won’t help very much on that score.  Unless, overall, you’ll save on your legal expense by hiring an in-house antitrust lawyer, your joint will probably not approve hiring that person.  Any time you need help, the joint will think, just call outside counsel.)

Then, throw in the law of unintended consequences:  Europe probably has the biggest variety of antitrust laws that are relevant to our business.  But in-house “competition” lawyers aren’t protected by the attorney-client privilege under European law.   It would be silly to hire someone in Europe.   

Au revoir, Paree!   

How about hiring in the U.K. or the U.S.?  Do some research to decide whether a lawyer located in London or New York (or perhaps a less expensive city) would be protected by the attorney-client privilege if that lawyer were advising on European law or a European investigation.

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Consider similar things, none of which the panel that decided the European case on attorney-client privilege was thinking about at the time, but all of which folks in the real world must address.

Present your business case to the committee that decides what money to spend.

Voila!

Survive that process.  Add the breath of life (and the recruiting process), and you’ve created one new in-house lawyer.

Heaven help us if we need an entire law department.


Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at inhouse@abovethelaw.com.