‘Right-sourcing’ – a crucial competency for in-house lawyers
08 March 2018
Good resource management is an essential skill for in-house employment lawyers. To manage my workload effectively and make efficient use of the company’s resources, I am constantly required to assess whether work is best carried out in house or outsourced.
With the option to refer work to external solicitors or barristers (or both), allocate tasks to other areas of the business (such as HR) or simply do the work myself, making the right decisions has a big impact on my ability to do my job properly.
The approach to resource allocation will, of course, vary between organisations and individuals. Having worked in a number of in-house roles in a broad spectrum of organisations as part of LS In-house, Lewis Silkin’s flexible resourcing service, these are some of the factors that influence how I deal with this issue:
- The number of employment lawyers in the team. When I am the sole employment lawyer, my fluctuating personal capacity necessarily has a significant impact on my decision.
- The size and experience of the HR department. There is a close relationship between the proficiency of the HR team and the demands on external counsel’s time. The more capable my HR colleagues are, the more time I have to deal with complex matters rather than outsource them.
- The company’s approach to litigation. Where it is clear from the outset that a matter will “run”, it may be worth instructing external solicitors at an early stage from a presentational perspective. The value of a claim (or potential claim) will also dictate whether it is worth sending the matter outside.
- The legal budget and where this is held. Some business areas may expect the legal team to deal with all matters internally and are reluctant to incur additional costs on external counsel. Conversely, other internal stakeholders may demand a “big name” law firm to review their matter. It can sometimes be difficult to balance these conflicting demands so that a matter is dealt with appropriately.
In light of the above, I often seek to refer the following type of work externally (while always retaining overall management of a matter, so that I can determine when an in-house lawyer or HR colleague is best placed to take a task forward and inform strategy):
- Litigation in the Employment Tribunal or High Court. Occasionally, I am part of an in-house team that is large enough and has the capability to conduct all of its employment litigation in-house. This is rare, however, and it is common to outsource at least some litigation given the resources required in successfully running a claim. Where the claim is low value and not expected to go all the way to trial, it may be cost-effective to instruct a barrister directly. If so, the in-house lawyer will most likely be required to undertake the administrative aspects of preparing bundles and issuing correspondence.
- Multi-jurisdictional projects - where a local opinion is required to properly inform the business of the options available.
- A second opinion in complex matters. This is useful where the commercial or legal risks are high - it can help the business decide whether a controversial or costly course of action is the best option in the circumstances.
- Matters where significant technical or administrative resources are required. Examples of this include disclosure and responding to a data subject access request. If thousands of emails need to be processed or reviewed, it is often more time- and cost-efficient for external lawyers, with access to document discovery platforms and paralegals dedicated to a specific task, to take the matter forward.
- Niche matters, which are not wholly employment-related but fall outside the other in-house lawyers’ remit. An example of this might be civil litigation in the context of an employee's departure. The right external lawyer can be relied upon to provide the in-depth advice necessary to deal with such specialist matters.
- “Overflow” work, when the in-house team is operating at full capacity. It can be helpful to build up a strong relationship with one or more “go to” external providers who know your business and can be called upon to provide support at short notice.
In contrast, I generally aim to keep the following types of work in house:
- Pre-action work, such as negotiating with Acas or the lawyers of potential claimants. Where the claim will be low value, or likely to go away fairly early on, it may not be worth outsourcing. I may also have the relevant background to the matter, making it easier to handle the response internally.
- Day-to-day advice, for example handling disciplinary matters, redundancies and TUPE. This is particularly appropriate where regular face-to-face meetings are required. In addition, where the HR team is familiar with the individual(s) in question - or I am personally - it may be possible to reach a more realistic risk assessment of a particular course of action than an external lawyer looking at the facts in isolation.
- Policy or contract reviews. These benefit from a deep understanding of how the business works, its commercial objectives and the “house style”.
- “Sense-checking” the relevant legal risks associated with certain decisions.
- Simple matters, such as reviewing standard letters. This is usually most cost-efficient when handled by HR.
Getting resource allocation right helps an in-house employment counsel to be viewed not just as a competent lawyer but a valued partner to the business. I should emphasise, however, that the suggestions on allocation of resources discussed above represent my personal view. I would very much welcome observations and ideas on alternative approaches.