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Contributed by Kenny Lai Choe Ken and K Shanmuga, with photo by Daniel Soon

Saturday 31st July 2010.

Honesty, industry knowledge and proactive behavior in serving the needs of in-house counsel: these were the key elements that emerged from an extremely interative session where an eminent panel of in-house counsel expressed their expectations of external lawyers.

The session was conducted as a roundtable discussion, where the moderator fielded questions and the speakers answered or discussed the issues presented.

The session began with a discussion on the key differences and distinctions between lawyers in private practice and in-house counsel. Thava Kumar pointed out that the differences were more perceived than real in the sense that there are practitioners who behave like in-house counsel and vice versa. Farah Zaini likened the role of in-house counsel in the banking sector as legal risk managers on contract or litigation risks. Whereas Ina Anzalna followed on to that statement by adding that in-house counsel generally assist in the formulation of legal policies and processes.

Thava Kumar was of the view that the lines between external lawyers and in-house counsel were “blurring’. He pointed out that the only way for in-house counsel to still go to court was to go to the Industrial Court or for Arbitration. He encouraged them to do so if they miss the cut and thrust of the litigation process. In the banking industry, Farah pointed out there is not so much expansion in the role of in-house counsel – external counsel are still very much utilized for their expertise as they are expected to be more in touch with developments in the law. She placed a caveat that the use of external counsel depends a lot on the expertise and knowledge of the lawyers involved.

Ina pointed out the difficulties of getting experts in aviation law in Malaysia and the need to employ foreign lawyers which would be too expensive - hence the need to rely more on in-house counsel. Thava Kumar responded that this was not the trend in the oil and gas industry – locally, there was a lack of expertise so they have to resort to foreign lawyers. This was despite the fact that Shell has 650 in-house lawyers making them one of the biggest “law firms” around.

Raphael moved the speakers toward a discussion on the main topic of the day: the relationship between in-house counsel and the external lawyer, and their expectations of external lawyers.

Farah Zaini pointed out that trust and integrity was a pre-requisite. She emphasized that it was important for both sides to get to know each other stressing that external lawyers must be honest with her, expressing her frustration when external lawyers refused to admit to their own mistakes. Thava Kumar echoed her sentiments and gave the example of opinions being charged at Senior Counsel rates but work being done by 1st year lawyers or even pupils.

On the other hand, Ina Anzalna had a differing view and believe there are no common goals between the two. Practitioners, in her view, do it for the money whereas in-house counsel work for the company and want results.

Raphael commented that building relationships nowadays is very different from before, and asked the panel how external lawyers build relationships with in-house counsel.

Both Thava Kumar and Farah Zaini commented that one method would be for law firms to provide training and continuing legal education, which would provide an avenue for building relationships whilst also offering an opportunity for a law firm to distinguish itself from other firms. The need to be pro active was emphasized, and law firms could not just rely on their brand name. The panel were unanimous in their view that legal publications and updates were merely one aspect of this, but was not enough as “everyone” does it nowadays. A knowledge of the relevant industry was also commonly considered by all the panelists to be an important aspect in their choice of external lawyers.

But perhaps the most important thing, and certainly the most important trait for Thava Kumar, was integrity - lawyers who have less than honest billing practices (citing an increase in legal fees halfway through a matter) and who are not honest in their advice to the company on the prospects of success of a particular dispute are probably unlikely to be given work again.