About

In what ways do you see the in-house legal role evolving in your region over the next few
years?

I see a trend where in-house-legal functions will involve themselves even more in compliance and regulatory related issues. This is driven by many factors. The regulatory regime is getting more
complex and demanding, and one of course needs lawyers to interpret the legislation.
Furthermore, there is a trend that compliance divisions – as part of second line of defence – withdraws more to a monitoring and reporting function, and perhaps provide less legal guidance when it comes to, for instance,implementing new legislation . The in-house legal functions should move in to fill this vacuum.

What would you say are the unique qualities required to be successful as an in-house lawyer
in your industry?

I am not sure that these are unique qualities for in-house lawyers in finance, but there is
definitely a strong need for both legal skills and human relation skills. The best lawyers have
both. To be successful as in-house lawyer, you of course need to be able to understand the
legal side, but you will not come far if you lack the inter-personal skill-set. You have to be able
to build a broad network both within and outside your own organisation – this is necessary – to
get information and work together, and pick up new trends and signals. Another core quality is of course to be close to and understand the business and always focus on what’s the best and most efficient way to solve a legal issue. If anyone was in doubt, the era of the long legal memos stating what can’t be done and why has long passed.

Do you have any effective techniques for getting the most out of external counsel, in terms of
how to instruct them?

This may sound obvious, but I have learned the importance of daring to talk straight and
address many issues and topics directly and not go beating around the bush and expect people
to read between the lines. Most important is to be precise when it comes to defining the
deliverables from law firms. It is like ordering a new kitchen or bath room – the more precise
you are in in order, the more probable the result will be to your liking.

Thought Piece: Law firms reinvention

Internal legal departments are important clients for law firms. Not only are they major purchasers of legal services, but they also employ and train lawyers. I believe this puts internal legal departments in a unique position, allowing them to challenge law firms to reinvent themselves – all to the benefit of their clients, their client’s customers, and hopefully the law firms as such.

Many companies have a panel of pre-selected external law firms that they purchase legal services from. Normally it falls to the internal legal department to vet, and ultimately select, such panel firms. This process provides an excellent opportunity to influence law firms. In my view, such influence should target three main areas – changing the business model, using new technology and increasing diversity – whereas all three are closely linked to each other. Today, most law firms rely on the old bill-by-the-hour business model. This has served many law firms well. Nevertheless, the model is slowly changing towards use of more predetermined fixed rates, at least in the Norwegian market. I would argue this is a change for the better, and one which I believe internal legal departments can help accentuate.

At its core, the bill-by-the-hour model does not reward efficient and creative lawyers enough. Bear in mind that in many firms the number of billed hours is vital when it comes to determining bonuses. In my experience, most clients will find little value in the last billable hours in a lawyer’s 12-14 hour work shift. Conversely, when does the client’s willingness to pay increase? I believe this occurs when you are presented with new, creative ideas from the external lawyer – ideas or input that the client did not think of by her- or himself.

But how do you stimulate creativity to get employees to come up with such new ideas? Well, there are many ways of promoting creative behaviours. However, strongly linking employees’ career development and their compensation to firm expectations on how many billable hours they have to produce in any given year – often forcing people to work more rather than smarter, does not appear to be one of them. There is an abundance of scientific research that supports that the human brain works best when rested, and one has a good work-life balance. And a good work-life balance is perhaps not what you see in most law firms – owed to a large degree to the prevailing, and in my view, outdated business model. Furthermore, the billable hour model does not encourage more efficient ways of solving legal issues or promote the adoption of new legal technology.

When asking for quotes for legal work under a panel agreement, clients are increasingly thinking of ways to encourage new thinking and how new technology can be deployed. Asking for low, fixed rates for standard or bread and butter work which could be done wholly or partly by computer software instead of lawyers may in many situations do just that, and give law firms the necessary incentive to change their business model.

In Norway, women vastly outnumber men as students at the faculties of law, but are unfortunately rare as equity partners in the top-tier law firms. Demanding fixed rate for assignments may be a small contribution to helping law firms close this gender gap, as one reason for the lack of female equity partners may be that many women – and also many talented men – do not find the late working hours very attractive. By rewarding time spent at the office, instead of other parameters, I would argue that law firms, and in the end the clients, do not always get the best lawyers or services.