You should read the draft guidance for in-house lawyers
Lawyers are either in-house (that is, they work for one organisation who employs them) or in private practice (they work for a law firm who have multiple organisations or people as clients).
Historically most focus has been on private practice, but as the in-house legal sector has grown, so too have communities for knowledge sharing, regulatory focus, and interest in how in-house works.
If you have ever been called risk-averse, or seen your organisation struggle to take a decision, you may be interested in new draft guidance released by the SRA, the regulator for solicitors (regardless of whether you are a lawyer or not).
There are several components to the new draft guidance, but the one I am most interested in here is the guidance on ‘identifying your client’.
Who is your client?
In private practice - generally, but not always - it is fairly clear who your ‘client’ is.
This is important for all kinds of reasons1:
You need to know in whose bests interests you should be acting,
You need to know who can tell you what they want, and
If there is a decision you need, you need to know who can take that decision.
In-house, that all gets a bit murkier. Often there are competing interests at play between departments, between individuals who have their own personal agendas, and maybe even your own interest.
It can be hard to tell what your ‘client’ wants when you are dealing with either business managers or - in universities - academics who have their own wants that don’t necessarily align with those of the organisation. For example, anyone who wants to pursue a project is likely to want the organisation to accept more risk than the organisation itself might want. After all, if the individual shares in the benefits of a project but bears little of the potential risks (which fall to the organisation), their cost/benefit analysis is likely to reflect that.
And where there are conflicting views, it can be tricky - especially in large organisations - to know who resolves that, who makes the final decision to proceed with a risk or to walk away.
What often happens
Often, in-house, none of this is resolved - it’s all very unclear and it falls to the individual lawyer or contracts manager to figure out what to do.
But, of course, as a person you also have an agenda - you want to avoid being blamed for a contract gone wrong, but also you will rarely share in the success of a project. So naturally you will want to avoid risk more than someone who might bear less risk and see more reward2.
So legal or contracts teams get told they are ‘risk averse’, often get blamed for being a blocker, but nobody really gets to the root of the problem which is a lack of organisational governance and proper supporting culture.
Who is your client?
The SRA Guidance is clear (and luckily also correct) that your client is the organisation that employs you. You do not work for any of the individuals in the business, even your line manager - you work for the organisation. They are your client, and it is in their best interests that you should act3.
I honestly think this is really helpful just by itself - but it does raise other questions. Companies cannot talk, so how do they give you instructions? How can a company make a decision when it has no mouth4?
Who can take decisions?
Generally any organisation has some kind of governing board - a board of directors, of trustees, or governors. Ultimately this is the key decision-making body and anyone else in the organisation who takes a decision does so with authority that is delegated by this governing board.
Putting it diplomatically, not every organisation has a clear, written schedule of delegated authority - often it’s developed organically without a cohesive strategy. That’s a problem, and once that will affect the in-house lawyer or contracts manager as various constituencies within the organisation believe they can take decisions - and maybe they have in the past - but this hasn’t happened with the right authority.
Sorting out this governance issue - in one way or another (e.g. by reporting upwards to the board the status quo, and asking them to endorse or correct this) is key to success.
Who can tell you what they want (or ‘instruct’ you)?
And finally, it’s worth thinking about who is able to give instructions to you - not every member of the organisation will be able to task you, so who has the authority to do so? Even when they do, how do you address conflicts of interest between the person instructing you (who will have one agenda) and the organisation (your ultimate client, in whose best interests you should act, but the person instructing you may not be acting).
All of these aren’t just theoretical or wishy-washy - it’s critical to being able to succeed as an in-house lawyer or contracts specialist.
Also you kind of need to know who is paying
Just to be clear this isn’t a moral failure or anything; it’s just natural
This can get complicated for some organisations with multiple entities (large group companies) or even where you might be employed by one organisation but also do work for a subsidiary company, but in general it’s good to keep this in mind.
The lesser known Harlan Ellison book