Is there a lawyer in the house?

by 15 Apr 2008

Recruiting in-house counsel can be a challenge. With the demand for good in-house legal professionals increasing, successfully attracting and retaining this sub-specialty may strongly impact the bottom line. Teresa Russell reports

Many organisations have traditionally received their legal advice from law firms with whom they have developed a relationship over a number of years. However, there has been a growing trend in the last five years to employ in-house legal counsel to manage much of the regular legal work, as well as the relationship with external firms that are now consulted for specialist opinions, litigation or assistance.

Three main changes have influenced this trend. The first is that in-house work has reached parity in terms of salary packages when compared to staying in a firm and becoming a partner. The second driver is that most law degrees are usually combined with another (often commerce/business-based), giving the individual lawyer a broader view of where they might ply their trade. Thirdly, many companies have discovered that their legal costs can be slashed and commercial risks minimised when they employ in-house counsel.

Two of the largest employers of in-house counsel in Australia are the banking and finance industry and the construction/infrastructure industry. David Cohen, general counsel at AMP, the well-known Australasian wealth management company, has 35 lawyers reporting to him via four legal teams. Around 25 per cent of his in-house counsel team are women working part-time.

“We have been very successful in attracting women who are returning to the workforce after having children. There has been a big push across the whole company to provide flexibility in employment to target this sector,” says Cohen. AMP now has 14 weeks paid maternity leave and the ability to purchase additional leave that suits people needing to cover the school holidays.

“If we don’t have the mindset and the tools to provide flexibility to our women, we cut ourselves off from a big sector of a shrinking [candidate] market,”says Cohen, who has had two women job share his PA role for several years now. “It’s a no brainer. I am convinced that most difficulties people associate with flexibility are just in the mind. There are always practical solutions,” he adds.

David Simpson, chief legal officer and company secretary for United Group, has 25 lawyers reporting to him globally. Eight of them are employed overseas. Most of them work within the business reviewing and negotiating contracts. Four work in the North Sydney group head office, covering the areas of mergers and acquisitions, company secretariat, construction law and litigation, contract administration and global insurance coverage.

United Group is an engineering and property services group, with interests as diverse as providing engineering services, building power substations, water treatment plants and rolling stock (trains) and dealing in corporate real estate. It has recently experienced substantial growth organically and through acquisition. United’s team of in-house lawyers has been built from 17 to 25 in the last two years.

“Our CEO has the philosophy that our business has to have a good mix of high value add from in-house counsel mixed with external consulting advice. We are quite attractive to candidates because they get great exposure to clients, manage face-to-face negotiations every day and have a good mix of work because of the diversity of our business interests,” says Simpson.

The recruitment process

The recruitment process at both AMP and United Group is dependent upon the seniority of the role. AMP uses search firms to identify potential candidates for senior legal roles. For mid-level roles, they either use a legal recruiter from their preferred panel of providers or, if they believe the role will be easy to fill, they advertise themselves.

“We work closely with both central HR services and line HR during the recruitment process. After the first cull from reading CVs, HR interviews the people we are interested in, then the legal manager does a second interview, often with another senior legal team member and sometimes with me,” says Cohen.

At United Group, Simpson says he uses recruiters and advertising as a third resort, because the market for construction and property lawyers is quite a niche area. When he does use recruiters, he uses Dolman or Taylor Root. “If we are looking for a senior candidate, we consider people we have either worked with from our two panel firms (Freehills and Mallesons) or someone who we have dealt with in opposition. The other source for senior lawyers is from other construction companies via word-of-mouth,” says Simpson.

Lawyers with three to seven years rotation in law firms ideally fill junior in-house roles in United Group. “We get people who have come to understand where they want their career to go. They have decided not to chase the golden carrot and pursue the partnership route, but are interested in being a part of a business and delivering results that contribute to the bottom line,” he says.

“Candidates must understand that people are judged differently in law firms to corporate. In firms, billable hours and the quality and detail in their legal advice are important. In corporate, we value how effectively you can impact the bottom line,” he says.

Using a network of other general counsel within the construction and property industries, Simpson has often been able to identify these candidates and approach them directly.

Fit for role

At AMP, candidates for team leader and senior roles undergo psychometric testing as part of the recruitment process. “We look for their behavioural preferences as well as the ability to coach, to present and to influence without authority. Legal skills in these roles are a given. It’s the non-legal skills that will make them effective managers of expectations and stakeholders,” says Cohen.

Simpson says that he conducts “grandfather interviews” with candidates applying for more junior roles and that HR also spends time with them to assess how well they will fit into the company. The tables were recently turned on Simpson when recruiting a senior counsel in insurance. “During the interview process, he asked to speak with the people he would be working with to make sure in his own mind that he would fit in with us. I thought that was a very clever request and would definitely do it again for other senior roles, although you have to be careful about candidate confidentiality,” he adds.

The future

Cohen is himself transitioning to a new role as general counsel for the Commonwealth Bank, where there will be more than 100 lawyers in his team. Regardless of employer, he believes that flexibility in employment will continue to be a very attractive force. “I think we will also see a move towards more part-time employment for men. It’s a good way to retain corporate memory for more senior lawyers [approaching retirement]. At the younger end of the spectrum, men are electing a different work-life balance. There will be more double income families with both parents working part time. Employers must enhance flexibility through work-from-home arrangements and by providing part-time roles,” he says.

Simpson says that among construction and property lawyers, Australian employers will continue to struggle stopping people going to booming markets such as the Middle East, but they should target efforts towards recruiting them on their way back home. He believes the in-house market may get easier to recruit into because law firms in the future will struggle to provide equity partnerships for all those who expect them.

“Our markets will experience sustainable growth for years to come. Businesses will continue to increase their affinity for in-house lawyers. They manage risk, bring high levels of business acumen and realise large cost savings to companies,” says Simpson.

Hiring in-house lawyers: the steps

1. Don't be afraid to look outside the square - personality/style is often just as important for success for an in-house lawyer as experience.

2. Provide a detailed position description for the role and don't be afraid to ask your recruitment consultant for tips in putting this together.

3. Understand legal market conditions and in what direction it is moving before recruiting for any in-house legal position.

4. Be realistic about what you are looking for - don't rule out candidates with a lack of prior in-house experience. They often end up being the ideal candidate.

5. Manage expectations about the role and salary/benefits.

6. Think about what might differentiate your company as an employer of choice in your market, and be prepared to sell the role to candidates.

7. Arm any existing in-house counsel with interview tips and techniques - they are often just as nervous as the candidate being interviewed!

8. Move the process along as quickly as possible - momentum is important and creates a good impression of your company.

9. Know how closely the candidate will be able to work with the business - is it a purely legal role or is it commercially focused?

10. Be aware of any legal requirements and procedures for the role - for example, is there a requirement for an unrestricted practicing certificate?

Source: Dolman Legal Search and Recruitment