Insights of Best Practices InHouse General CounselCorporate Counsel
Insights of Best Practices: In-House/ General Counsel/Corporate Counsel Kimberly Gee, Shaun Maddex, Marina Sparks Presented March 14, 2019
Before we start. . . 1) Top 5 essential traits and behaviours to be effective in the in-house counsel role 2) What are some of the traits and behaviours we want to avoid as in-house lawyers? Audience Exercise Write down your top 5 at your leisure, we will return to them later for your input
Agenda In-House/General Counsel/Corporate Counsel Activity Where do we look for best practices? ❖ Law, Codes of Conduct ❖ Case Law, Associations ❖ Practitioner Interviews/Real Work Experiences ❖ Literature, opinion pieces, special topic/case studies discussions (cyber threats, the lawyer’s role in a crisis) ❖ And your opinions? What are some common themes? Conflicts, Due Diligence What are the essential traits to be effective in the role? Activity
Law, Codes of Conduct ❖ ❖ ❖ Law Society Rules Professional Code of Conduct Legal Profession Act
Law Society of Alberta Code of Conduct that Mention In House Counsel • • • Rule 3. 2 -9 When the Client is an Organization Although a lawyer may receive instructions from an officer, employee, agent or representative, when a lawyer is employed or retained by an organization, including a corporation, the lawyer must act for the organization in exercising his or her duties and in providing professional services. Commentary[1] A lawyer acting for an organization should keep in mind that the organization, as such, is the client and that a corporate client has a legal personality distinct from its shareholders, officers, directors and employees. While the organization or corporation acts and gives instructions through its officers, directors, employees, members, agents or representatives, the lawyer should ensure that it is the interests of the organization that are served and protected. Further, given that an organization depends on persons to give instructions, the lawyer should ensure that the person giving instructions for the organization is acting within that person’s actual or ostensible authority. [2]In addition to acting for the organization, a lawyer may also accept a joint retainer and act for a person associated with the organization. For example, a lawyer may advise an officer of an organization about liability insurance. In such cases the lawyer acting for an organization should be alert to the prospects of conflicts of interests and should comply with the rules about the avoidance of conflicts of interests (Rule 3. 4)
Law Society of Alberta Rule 118. 3 A lawyer who is retained by a client as described in section 118. 2(1) shall obtain and record the following information: • • (a)the client’s full name, (b)the client’s business address and business telephone number, if applicable, (c)if the client is an individual, the client’s home address and home telephone number, (d)if the client is an organization, other than a financial institution, public body or reporting issuer, the organization’s incorporation or business identification number and the place of issue of its incorporation or business identification number, if applicable, (e)if the client is an individual, the client’s occupation or occupations, (f)if the client is an organization, – (i)other than a financial institution, public body or a reporting issuer, the general nature of the type of business or businesses or activity or activities engaged in by the client, where applicable, and – (ii)the name, position and contact information for the individual(s) authorized to provide and giving instructions to the lawyer with respect to the matter for which the lawyer is retained, (g)if the client is acting for or representing a third party, information about the third party as set out in paragraphs (a) to (f) as applicable.
Case Law, Discipline Decisions ❖ Some decisions have given opportunity for judges to comment on the roles and duties of in-house lawyers
Mac. Donald Estate v Martin (1990 SCC) • Facts: The appellant in this case retained the services of A. Kerr Twaddle in 1983, in that position, Twaddle was assisted by one Kristin Dangerfield, who was a recent articling graduate. She was heavily involved in the case, including being involved in many of the confidences disclosed by the client, Martin. • Years later, Dangerfield eventually joined the firm who is representing the Respondent in this case, as did 8 other members of the Firm with which Twaddle was part of before his appointment to the bench. The appellant is seeking the removal of the Thompson firm from being able to represent the respondent, due to the fact that they had previously worked on the file under A. Kerr Twaddle.
Mac. Donald Estate v Martin (1990 SCC) • Sopinka, J “The use of confidential information is usually not susceptible of proof. Therefore the appropriate test must be such that the public, represented by the reasonably-informed person, would be satisfied that no use of confidential information would occur. This must be the overriding policy that applies, and must inform the court in determining whether a disqualifying conflict of interest exists. ”
Mac. Donald Estate v Martin (1990 SCC) “The test should be that, once it is shown by the client that there existed a previous relationship which was sufficiently related to the retainer from which it is sought to remove the solicitor, the court should infer that confidential information was imparted unless the solicitor satisfies the court that no information was imparted which could be relevant. ”
Valeant Canada LP v. Canada (2013 FC) Facts • This was a patent dispute between two pharmaceutical companies, where Valeant discovered that a member of the legal team for the opposing side had represented on this same patent previously. • The Court rules that the counsel should be removed due to the conflict arising from his knowledge of confidential information obtained in his previous role in the action working for the opposite side. • In-house counsel need to be aware that issues of conflict of interest arise when they move from one in-house role to another, much the same as it applies to lawyers working in private firms.
Valeant Canada LP v. Canada (2013 FC) “Unlike external counsel, in-house lawyers will know their client in a deeper, richer and broader way, ” says Mercer. “So when you start to get them moving among competitors, you could end up with a very different sort of conflicts playbook than we're used to. ”
Helpful Associations ❖ Association of Corporate Counsel (ACC) ❖ Canadian Corporate Counsel Association (CCCA)
Association of Corporate Counsel From ACC website: • The Association of Corporate Counsel (ACC) is a global bar association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other organizations through information, education, networking opportunities and advocacy initiatives.
Canadian Corporate Counsel Association From CCCA website: • “The Canadian Corporate Counsel Association (CCCA) is the national voice and section for inhouse counsel in Canada. We have been championing Canadian in-house counsel since 1988. Now more than 5000 strong, the CCCA is proud to be a section of the Canadian Bar Association, the essential ally and advocate of the legal profession in Canada. ”
CCCA Resources • Online publications to guide In-House/Corporate Counsel: – Global Corruption: Law, Theory and Practice Course Book (July 2018) • Ch. 8, The Lawyer’s Role in Advising Business Clients on Corruption and Anti. Corruption Issues. » “This chapter focuses on the role of lawyers in assisting their business clients to avoid corrupt acts by their officers, employees and agents, and to advise their clients on how to deal with allegations of corruption if they arise (cont. )
CCCA Resources “In particular, it will address the following: identification of exactly who the client is in a corporation or other business organization; examination of a lawyer’s relationship with a client; circumstances where a lawyer may encounter corruption; the duties lawyers owe to their clients in regard to corruption; and the prevention of corruption by the exercise of due diligence including compliance programs and risk assessments. ” (772)
CCCA Resources • CCCA Website provides access to latest editions CCCA Magazine: – “The official publication of the Canadian Corporate Counsel Association, CCCA Magazine covers law from the unique perspective of in-house counsel. Insightful articles, analysis and commentary help members meet the challenges of being both legal experts and business strategists in their organizations. Published quarterly, it’s the best source of news about the in-house world and how the CCCA is working to advance the interests of its members. ”
CCCA Website • Includes link to Mondaq Advice Centers (MACs). • From website: – “MACs have been created for corporate counsel, C level executives and business owners across the globe to augment their internal knowledge bank and paid for services. MACs help you to: ● ● ● Save money by enabling you to do more in-house Anticipate possible issues Resolve disputes that potentially threaten your competitiveness Navigate the laws and regulations that shape the global economy Develop and close deals that will aid strategic growth. ”
Mondaq Advice Centers • From website: “MACs offer a core set of valuable materials: ● ● ● • Practice guides Precedents and drafting notes Checklists Standard template contracts & clause banks Model letters” Members of CCCA can access these materials free of charge.
CCCA Magazine • Latest edition features an article on what you as In-House Counsel should do if your organization is hacked. • Other articles tackle mental health, provide advice on how to adapt to the changing role of In-House Counsel.
Hacked! What In-House Counsel Should Know By Daniel Tobok (with Lynn Yryku) • Daniel Tobok is CEO of Cytelligence, an international cybersecurity and digital forensics firm. • This article was featured in the Winter 2018 edition of CCCA Magazine and provides advice for In-House Counsel to handle ransomware attacks.
Ransomware • Ransomware is described by Tobok as malicious software that affects a computer of network by using phishing emails or by exploiting existing weaknesses. – This software encrypts files and holds them for ransom; users get a message informing them that the files will remain locked until they pay up.
In-House Counsel’s Role • • According to Tobok, in these situations the In-House Counsel is in charge. – “the company’s core operation, reputation and legal compliance are on the line. ” Tobok claims ransomware is not an IT issue and new anti-virus software will not fix the problem.
What to Do • • The first step set out by Tobok is to see if you have back-ups that are not connected to the internet. – If so, you can restore your files using these. If not, you should plan to hire a professional cyberbreach response firm.
What to Do cont. • Cyberbreach response firms can help you make sure that you will actually get your data back if you decide to pay the ransom. • That being said, when hiring a firm you should make sure they have a process to determine whether the perpetrators actually have a key to unlock the data. • A cyberbreach response firm can help you determine if you should pay or not.
What to Do cont. • A lot of the time (according to Tobok) you will have no choice but to pay the ransom – No backups, company needs the data and will cost too much to recreate it/creates a risk for the business. • Tobok claims it usually takes around 3 days to get the business back on track after the data is unlocked. • Tobok also recommends hiring the cyberbreach firm to conduct a forensic invesitgation afterwards to discover any vulnerabilities.
Tobok’s Best Defence 1. Take an inventory of all your devices 2. Automate the patching of software and other security 3. 4. 5. 6. 7. tasks across all devices. Ensure you have segmented your network. Back up critical systems to a separate server. Track threats and ransomware trends. Harden your endpoints and access points above industry standard. Implement regular training.
What is the role of an in-house lawyer during a crisis? -Often responsible for checking company announcements: ensure they don’t contain comments that could compromise the company -Vital to convey a positive message - give the company an active, not defensive position
Avoid being the messenger but if you must. . . -Prepare beforehand -Be polite and calm -Be aware of your body language -Speak slowly and clearly -Refrain from saying more than needed -Do not repeat the accusation against the company even if you want to deny it in the process -Do not put yourself in a defensive position -Do not promise or commit -Convey a positive message in every answer
What to do if the lawyer suspects management or an employee committed inappropriate (even illegal) acts or neglect? -Responsibility to support the interests of the company as a business entity -If suspects personal blame, check for possibility of conflict of interest and suggest person seeks third-party independent legal advice
It probably goes without saying but. . . Under no circumstances should the lawyer encourage attempts to conceal information - this could be illegal and pose a greater threat to the company The company will need to cooperate with public authorities without, of course, compromising its own rights
In House Interview (1) What made you choose to be in-house counsel? (2) Are there any resources specific to the in-house counsel role that you recommend? (3) What are the best practices you would suggest for someone beginning a new role as in-house counsel? (4) Any lessons learned respecting an action or inaction you took but would do differently with the benefit of hindsight? (5) What is the biggest difference you have found between working in a private law firm, and working as an in-house lawyer?
David Izett - A commercial lawyer with over fifteen years of domestic and international experience - Advises on executing major capital projects and day-to-day operations - “As in-house counsel and a member of leadership teams, I work hand in hand with senior leaders in the organization to refine strategies and ensure that corporate objectives are achieved in a compliance with applicable laws. ” - He is currently the Assistant General Counsel for Nutrien in Calgary, and serves as a Board Member of the Alberta Chapter of the Association of Corporate Counsel.
Steven Lovett The Employee-Lawyer: A Candid Reflection on the True Roles and Responsibilities of in-House Counsel Emporia State University, Emporia, Kansas. Assistant Professor, School of Business – 2014 -2016 Co. Director of the Koch Center for Leadership and Ethics – 2014 -2016 New Mexico State University, Las Cruces, New Mexico. Adjunct Professor, College of Business – 2013 -2014 University of Texas at El Paso, Texas. Adjunct Professor, College of Business Administration – 2011 -2014 Carrillo Law Firm, P. C. , Las Cruces, New Mexico Of Counsel and Senior Lawyer – 2011 -current. John D. Wheeler & Assoc. , P. C. , Alamogordo, New Mexico Senior Lawyer – 2009 -2011 TAG International, LLC, El Paso, Texas. Chief Legal Officer – 20042008 El Paso County Attorney’s Office, El Paso, Texas. Assistant County Attorney, Appellate Division – 2003 -2004 Sheaco Financial, L. P. , Denver, Colorado. Chief Legal Officer / Chief Investment Officer – 2000 -2002 Texas 4 th Court of Appeals, Justice Karen Angelini. Law Clerk – 1998 -1999 Eric Esperne
Turn Hierarchy into Collegiality • You can do this by looking for opportunities to make your reporting into the law department as 'flat' as possible. " • In saying this, he was referring to a reporting structure where each person reports and brings assignments directly to the individual within an organization who will be taking care of the task. He believes this helps to make the in-house lawyer more of a team player in the organization
Be Adaptable • “An in-house counsel has to make sure he or she is adaptable. Valuable in-house counsel look for opportunities to exercise their adaptability even for smaller, less consequential issues. An in-house lawyer's ability to calmly and decisively adapt to whatever storm hits the legal department will bring more value-practically and emotionally -to a corporate client than a year's worth of noble paper shuffling. ”
Dedicated (as differentiated from Loyal) • The pressure of billable hours and contingency fee income is replaced with predictable income, set business hours, benefits, vacation, and being surrounded by other non-legal employees. • An in-house lawyer who is dedicated to the functions and goals of the legal department is an invaluable asset to a general counsel and to a successful company.
Dependable • “Dependability is only earned in one way: being reliable. ”
Mission Oriented • “When an in-house lawyer understands and helps to effectuate the overarching goal of a legal department, then value contribution is a natural result. ”
Preparation • • Listen to other departments Know the Applicable Laws Know the Industry itself Know the Competition
How about you. . . What are the top 5 essential traits and behaviour to be effective in an in-house role?
Sterling Miller “What not to do” More than 25 years of in-house legal experience as General Counsel, Corporate Secretary, and Chief Compliance officer of Marketo, Inc. , Sabre Corporation (NASDAQ: SABR) & Travelocity. com. He also serves on a variety of board of directors and advisory boards. He wrote about ten things not to do as in-house counsel back in 2014.
How about you. . . What NOT to do. . . What are the top 5 traits and behaviours to avoid as an in-house lawyer?
Beyond the Standard Advice for Work Success, what are the tips for an in-house?
The In-house role requires… ● ● ● A broad skill set “[t]echnical, legal expertise matched by an in-grained understanding of and vested interest in the business of the client. ” ability to be both a legal adviser + business adviser “who shapes organisational risk culture and drives innovation. ”
The In-house role requires… ● Knowledge of many different legal landscapes because responsibilities are often multi-jurisdictional ● “Must be equipped to respond rapidly to challenges and opportunities”
How is the success of in-house counsel determined? … Offer value-added in terms of: Company “conscience” Mitigated risks Reduced exposures Commercial gain, . . . In ways that are measured and reported to the organization
Activity What would be the top 3 priorities for the inhouse counsel role (if you’re new to the job what will you prioritize? ):
HANDOUT: Ten Priorities for the General Counsel 1. Understanding the organization 2. Understanding the organization’s context 3. Scanning the horizon - and beyond 4. Providing a seamless, scalable resource 5. Developing the team 6. Building influence 7. Creating the learning organization 8. Setting the ethical tone 9. Personal development 10. Defining the future
Thanks for Listening!
- Slides: 51