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Guest post: Corporate lawyers under the microscope – the ‘more for less’ delusion and City firms as risk canaries

Last week I attended a Symposium on Corporate Lawyers organised by Steven Vaughan and his colleagues at the Centre for Professional Legal Education and Research (CEPLER). It was a great event, bringing together a wide range of academics working on corporate lawyers alongside a fair few from corporate practice. I thought I’d share a few highlights.

Joanna Gray, professor of financial law and regulation at Birmingham Law School, told a story about a corporate partner in a large law firm advising his friends at a dinner party to consider their investments carefully as trouble was coming. This was in 2006. Her critique of the role of finance lawyers in engineering complexity was accompanied by an interesting suggestion: that Magic Circle firms (in particular, though I don’t think the idea was confined to them) be required to report on levels of risk in the market. She was not suggesting they report on individual clients but that they report generally on problems in financial services, venture capital investment and the like. She pointed out that like the corporate partner they were as well placed as anyone to understand the legal risk given the pivotal role of a small number of firms a very high volume of banking and venture capital deals. In fact Joanna’s was but one of a whole heap of really interesting academic papers: Steven Vaughan on what (on earth) the public interest means in the Code of Conduct; John Flood on why Freshfields’ ethical troubles of the past were like Japanese noodle eating (you had to be there); Joan Loughrey on meta regulation in law firms, to name but three.

Paul Gilbert, formerly a GC and now a consultant and partner on our Ethical Leadership Project, gave a powerful talk on the problems facing some in-house lawyers. He suggested, some in-house teams have accidentally reached crisis point. In-house counsel generally come with solid training from a supportive team and infrastructure from private practice and also come with the idea that (billable) casework activity is what drives success. They find themselves in an environment with (and he emphasised he was generalising) no or limited peer support and small teams. The instinct in such an environment is to get busy, to try please people, and this leads to overload. Some in-house leaders, he felt, had not properly tackled this with a proper sense of priorities and with risk management brought properly into focus.

He also questioned some of the tropes of in-house practice trotted out at GC conferences which he felt meant some GCs might not be fit for purpose. An ambition to simply be a ‘trusted adviser’ was a vanity project without real meaning. ‘Is being listened to the height of their ambition?’ he asked. Managing, understanding legal need and legal risk was much more important and involvement, he said, does not equal influence. To put it another way, he wondered how bank lawyers can think they have been doing their jobs well with their businesses subject to such stratospheric fines? Although he also emphasised that he thought banks had begun to turn this around. More generally, he felt in-house legal teams had missed the opportunity to properly define their role and look beyond the narrow definition of legal. As an example, he suggested lawyers can’t sign off on T&Cs and not deal with the sales process; the environment driving the process that the T&Cs are meant to govern. He also suggested, ‘More with less is a ridiculous idea. We can do less with less.’ Such banal business-speak he suggested was a cliché, which is unhelpful and drove a process of negative incentives. He worried that HR appraisal processes were full of false constructs which sponsor a ‘faux heroism’ such as ‘More for less’ or ‘being commercial’ and distracted attention from the fundamentals of the role.

Paul’s talk prompted a detailed response from a senior in-house lawyer at a well-known corporate. She felt that her experience was quite different. One of her previous employers had specifically employed lawyers to give a more rounded, ethical consideration to matters they were advising on. They were given a mandate to look at the legal and ethical dimension to the problem. A particularly interesting way of framing it was that she suggested another business she worked for gave a mandate for lawyers to be consumer advocates within the business. There was a measure of agreement with Paul’s opening remarks about in-house lawyers being prone to over work. As a way of mitigating this her business monitored work/life balance metrics to see when legal is ‘running hot’.

A second in-house lawyer who spoke earlier in the conference was Barry Matthews of ITV. He gave a fascinating talk on the ways in which his business dovetails training, CSR and pro bono programmes but it was his comments on the costs of private practice which stood out for me. He talked about the shift towards fixed pricing for legal work in his business. He said this was not driven principally by a perception that lawyers were too expensive. Controlling and budgeting for cost were important drivers but they had looked at the cost of legal compared to other consultants and lawyers in fact did not look expensive in comparison. Yes, you read that right. The problem was that hourly rates undermined trust within the business. The sound of the taxi meter clicking during meetings and telephone calls undermined a good relationship. The lesson appeared to be, it’s not that you are too expensive, it’s that the way you charge us undermines trust.


You can read my talk to the Symposium, Corporate Lawyers: Institutional Logics, Values and Ethics, by downloading it here.

Richard Moorhead is Professor of Law and Professional Ethics at UCL, you can read his blog here

Read ‘Platitudes and a missed debate – how GCs are pushed off their ethical course’ for more on the subject.