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Live From The Summit: On Growing In-House Law Departments

July 15, 2015, 2:17 PM

Big Law Business is holding its inaugural Summit at the Apella in New York City. Below are excerpts from the 9:45 a.m. panel, The New Law Firm Competitor: In-House Counsel.

Moderator:

David Levine, General Counsel, Bloomberg LP

Panelists:

Sabine Chalmers, Chief Legal & Corporate Affairs Officer, Anheuser-Busch InBev

Michele Coleman Mayes, Vice President and General Counsel, The New York Public Library

Christa D’Alimonte, Senior Vice President and Deputy General Counsel, Viacom Inc.

Mei Lin Kwan-Gett, Deputy General Counsel and Head of Global Litigation, Citi

David G. Leitch, Group Vice President and General Counsel, Ford Motor Company

(10:03 a.m.) David Levine: “Although in some respects we compete, we don’t generally view firms as competitors. Having said that, we want to do as much as we can internally where we have the expertise. Who wouldn’t? The average rate for a third-year associate is $700 an hour. That’s $700 an hour for someone just a few years out of law school.”

(10:06 a.m.) David Levine: “I think law firms feel, perhaps mistakenly, that given their prestige, they can get away with charging the rates they’ve charged for years. Those firms are taking a gamble.”

(10:21 a.m.) Sabine: On joining Anheuser-Busch, and encountering the discrepancy between lawyers’ stature in the U.S. and the lack of influence they had in corporations, at the time: “I insisted that a precondition of my joining was that I reported to the CEO and I was on the management team.”

(10:23 a.m.) Michele: “As my one boss said, ‘lawyers stifle creativity.’ Well I have a different point of view, which is if you get me in the kitchen early enough, I have to eat what you’re cooking.”

(10:24 a.m.) Michele:“You’ve got to know when to keep your mouth shut when people are thinking creatively. If lawyers pull the cord too quickly and stifle the creative process, they’ll be resented.”

(10:27 a.m.) Christa: On leaving her firm to join Viacom: “It was a hard decision to leave. I wanted to be closer to the business. It’s dramatic how much I didn’t know, even though I’d represented them for years.”

(10:29 a.m.) Mei Lin: On leaving her firm to join Citi: “If I can only have one client, this particular client has a breadth and depth of legal issues that I could not have anticipated. Even though I do just have one client, the range of things I have to deal with on a day to day basis is quite breathtaking.”

(10:30 a.m.) Mei Lin: “There’s an incredible … collegiality” to working in house. She’ll miss arguing in federal court though.

(10:31 a.m.) David Leitch: The in-house lawyer needs to be “a jack of all trades.”

(10:32 a.m.) David Leitch: On in-house lawyers being “passed over associates”: “Be careful about taking that attitude. One thing I discovered as I went into Ford was that our people had a lot of good experience, deep experience in their particular area of expertise. I’ve come to really respect the talent that’s been in-house at Ford.”

(10:35 a.m.) Sabine: “We have absolutely moved away from the model of a large UK or US law firm managing regional lawyers in foreign countries. It is now totally managed in house.”

(10: 39 a.m.) Mei Lin:It’s hard to justify paying top law firm rates on anything that’s not a very significant matter. My own belief is you’re hiring the individual attorney rather than the law firm. You’re looking to match expertise with particular matters.”

(10:40 a.m.) Michele:“I’ve had firms back out once they learned more about the matter. I respected that. I’d rather have a frank discussion early, rather than a fight later.”

(10:42 a.m.) Michele: “Most cases don’t go to trial, you just discover them to death. Everybody knows that.” Allstate set up an in-house discovery unit, but it took a while for outside counsel to grow comfortable with that.

(10:43 a.m.)David Leitch:I tell outside lawyers they should listen to our earnings call. “By the way, don’t charge me for the hour that you’re on the phone.” It’s a two-way street: In-house lawyers need to educate the outside counsel, who in turn need to invest in the relationship.

(10:45 a.m.) David Leitch:“I don’t appreciate it when I’m looking at a new firm, and they want to retain the right to sue me in the future.”

(10:47 a.m.) Sabine: We often run e-auctions for IP matters or more rote work. We inevitably have an RFP process where law firms will bid. “When we first started doing that ten years ago, it was a shock to the system, maybe more so for law firms in Europe than in the U.S.”

(10:48 a.m.) Sabine: Law firms that we hire have two qualities: they’re hungry, and they’re flexible.

(10:50 a.m.) Sabine:We’ve fired law firms when the “unfortunate” experience arises that, while boarding an airplane, the in-house lawyers turn right, and the outside counsel turns left (to first class).

Another panelist quipped: “They could have used miles!”

(10:52 a.m.) Christa: “As a relatively new entrant to the in-house world, the focus on budgets has been an eye-opener. My colleagues and I review, on a monthly basis, how firms are doing. We notice which firms are good about keeping to budget, or alerting us when things go off budget.”

(11:02 a.m.) Sabine: Two requirements for hiring in-house attorneys: they have to like beer, and they have to be willing to take on other roles in the company.

(11:03 a.m.) David Leitch: On whether inside and outside lawyers are competitors: “No, and a firm that thought that way wouldn’t be a firm that we use.”

(11:06 a.m.) Michele: “I see us as dance partners. Sometimes in-house leads, sometimes outside leads. You just have to know when that’s happening.”

To view the full agenda, click here , and stay on our home page for further coverage.