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Law firms need to learn from in-house legal departments

Empower those who innovate but do not confuse innovation with invention

24 February 2015

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A panel of experts has told delegates at the Global Law Summit (GLS) in London that private practice law firms would do well to look to how in-house legal teams are innovating legal services.

Neville Eisenberg, managing partner at Berwin Leighton Paisner (BLP), told the assembled crowd of international lawyers that much has changed within in-house legal departments, even in "conservative organisations such as banks" and that "many general counsels now have board positions in companies".

"Law firms need to become much more agile and the lawyers need to be people who can adapt to different situations and products," said Eisenberg. "Rapid evolutions in a business can throw up different issues for the company. The challenge for law firms is to adapt and be agile and move at the same pace, but as a conservative profession that doesn't come quickly."

One example of an in-house team that fits the bill of being particularly innovative is that of social media giant, Twitter.

The technology company's UK legal counsel, Julia Apostle, explained how Twitter's legal team is fully integrated with the rest of its 3,600 employees worldwide, creating a "collaboration between all areas of the business".

Twitter is a company born out of innovation and, with 228 million active users per month producing 500 million tweets per day, Apostle advised that the social media network needed to "remain competitive in an increasing competitive marketplace" as new forms of social media take flight each year. To that end, Twitter's in-house lawyers are involved in the early stage of development when it comes to new products and not just at the end before sending them to market.

The majority of Twitter's legal counsel are based across the Atlantic where the company seems to benefit from the US legal education system, which sees most lawyers study an undergraduate degree in a separate subject before moving on to read law. Apostle suggested that this creates a more rounded lawyer with knowledge of other subjects such as science and technology - perfect for a company such as Twitter.

Reena SenGupta, founder of the FT Innovative Lawyers Programme, agreed and said that recent studies of Stanford University's MBA graduates showed that the most successful entrepreneurs had a list of "horizontal contacts" rather than "vertical contacts".

"There are so many obstacles to law firms innovating," said SenGupta. "The professional culture of the legal sector is antithetical to innovation. You have an hourly rate, which is a time input model and not about creativity. You have a risk averse, cautious, conservative group of people. You have a sector that looks at precedent rather than the future."

She continued: "You have a very status driven profession. The thing about being a lawyer is that it is a very vertical network. You go to law school, you do your training, you join a law firm, you are immersed in lawyers - you marry lawyers. It is a very up and down social network. But the lawyers that innovate are the ones that have a horizontal network. They manage to branch out. They are more likely to become friends with their car mechanic and different people of different social strata, who have lived in different places."

The evolution in the role of the lawyer from being not just a "technical legal specialist" but a "general business person" is where SenGupta admitted seeing more innovation take place in-house.

John van der Luit-Drummond is legal reporter for Solicitors Journal

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