In my experience, the most successful and efficient relationships between in house and outside counsel are sustainable and enduring, rather than transactional. There are, of course, many critical success factors involved in creating such relationships - quality, reliability, responsiveness, clarity, candor etc. - but among these factors one of the most important is the ability to combine seamlessly to provide the legal and regulatory inputs that are fundamental to business decision making. This goes far beyond simply soliciting, securing and communicating legal advice. Achieving sustainability involves supporting risk informed business decision making by creating a sense of shared responsibility towards a common business client, working according to an agreed methodology and communicating (clearly) with one voice.
To that end, in appropriate cases experienced in house counsel can lead a multi-step process which involves:
establishing a common understanding between in house and outside counsel of the proposed business action or strategy (here in-house counsel have a particularly important role given their intimate familiarity with the business)
identifying risks (what are the legal and regulatory threats to successful execution of the action or strategy?)
assessing likelihood (what is the probability of those risks/threats materializing?)
evaluating impact (assessing the impact of the risks identified if they materialize - here experience is key to distinguishing between theory and practice) and
making risk management recommendations (e.g. avoidance, mitigation, acceptance).
Throughout this process precision is key. For example, advising that a particular course of action is "risky" from a legal perspective or carries "some risk" has limited value as an input to business decision making. Better, then, to establish both within the legal team and with the business partners standard terminology (e.g. defining a spectrum of likelihood ranging from "very unlikely" to "very likely"), particularly in the realm of likelihood or probability. Admittedly, in novel circumstances this can be challenging but it is nevertheless a vital part of the value provided by the legal team.
This only scratches the surface of a complex but intriguing topic. I would welcome thoughts and feedback - from lawyers and non-lawyers alike.
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