Time flies and why in-house legal matters

Our sister title, Legal Business, celebrates the release of its 300th issue at around the same time this copy of IHL lands on your desks (or more likely in your inbox).

Legalease, which owns The In-House Lawyer, The Legal 500 and Legal Business was launched around the time of the Big Bang in 1987, initially with a core focus on the leading UK and international firms. But we have always kept a firm eye on the evolution of the in-house legal profession, not least with the launch if this title in 1992.

There was no single moment or individual to identify, but there is no question that one of the most fundamental changes to the profession since Legal Business launched in 1990 has been the dramatic expansion in size, sophistication and influence of in-house legal teams.

Says Charles Martin, the former senior partner of Macfarlanes, reflecting back on that time: ‘When I became a partner in Macfarlanes in 1990, only the very largest companies had a general counsel (and only 3i among private equity houses). The effective client would be the managing director, the finance director, company secretary or non-legal deal-doer. Today’s client is a lawyer and very much more sophisticated. That is a big and positive change in the balance of power and you see the impact of that every day.’

The particular nature of high-risk litigation and its more prominent position in public life in the US had for decades given in-house counsel a more central position in American boardrooms. In this regard, figures like Thomas Sager at DuPont and GE’s Ben Heineman and Brackett Denniston have had a huge influence on articulating the wider role of the in-house legal department in improved governance and more efficient procurement and provision of legal services.

By the late 1990s, there were a group of pioneering figures taking up the challenge in the UK, among them Robert Webb QC (British Airways), Steve Williams (Unilever), Rupert Bondy (GlaxoSmithKline), Philip Bramwell (BT); Howard Trust (Barclays); Peter Bevan (BP); Miller McLean (The Royal Bank of Scotland); Elizabeth Lee (GE) and Rosemary Martin (Reuters). Suddenly the dated, snobbish and fundamentally wrong assumption that somehow being in-house was a cushy number was dropped as GCs asserted that unless a law firm was an effective extension of their own legal practice and added value to what they were doing, it was redundant. The tail stopped wagging the dog.

As such the 2000s saw dramatic expansion in the in-house profession in England and Wales. By 2012, the number of in-house employed solicitors was over 23,000 – increasing 137% between 2001 and 2011, massively ahead of growth in private practice. By 2017, that number was around 28,000.

Building capability in-house became the norm throughout the 2010s. The result has been seismic: bluechips increasingly aim to handle much operational legal work themselves, often pushing external advisers to two extremes: high-end, one-off assignments at one end and commoditised volume work at the other. The power dynamic between firm and client has materially shifted in an environment in which firms’ largest clients are their biggest competitors, sweeping out the last vestiges of deference to private practice.

Long may it continue. And we’ll remain where we always have been – on that increasingly blurred line between law firms and clients.