The £19m discrimination claim by F&C Asset Management's former legal head has put the realities of flexible working in-house under the microscope. Ed Thornton reports

It is not often that in-house lawyers are featured on the pages of the Daily Mail – but then Gillian Switalski is not your average in-house lawyer.

The high-profile former head of legal at F&C Asset Management – a frequent speaker at conferences and in the press – left the company in September last year before launching a sexual discrimination claim against her former employers.

Switalski claimed she was forced out of her £140,000-a-year job at F&C after allegedly being bullied and discriminated against. The claim was upheld by the Central London Employment Tribunal in February but is currently being appealed by F&C at the Employment Appeal Tribunal.

In a statement earlier this year, F&C vigorously denied the claims, saying: "[We are] disappointed in the breakdown in trust between the company and Switalski which has resulted in an employment tribunal. Switalski made a number of claims against the company… the majority of which were not upheld. We vigorously refute all of the claims."

With Switalski seeking a record £19m in compensation, the stakes are high. Each side has called on the services of major law firms and barristers, with F&C instructing McDermott Will & Emery and Blackstone Chambers' Monica Carss-Frisk as counsel and Switalski taking advice from Withers employment partner Elaine Aarons and Devereux Chambers' Suzanne McKie.

One of the reasons the case has made the headlines is because most sex discrimination claims are settled out of court, away from the glare of publicity. But, more importantly, if Switalski receives the compensation she is seeking it will set new records in the UK, where the previous compensation record for a sex discrimination case is thought to be the £6.5m won by bond trader Allison Schieffelin from Morgan Stanley in 2004.

Not surprisingly, across the Atlantic the sums awarded for sex discrimination cases are mind-boggling. In May last year, in another case involving a disgruntled corporate counsel, Lorene Schaefer, general counsel of GE's $2.2bn (£1.1bn) transportation business, accused 12 of the company's directors of engaging in systematic discrimination of female colleagues. The company is trying to prevent the claim extending into a class action lawsuit that could cost it $500m (£251m).

It is in some ways ironic that Switalski feels discriminated against because of her gender, since her career to date has seen her break through her fair share of glass ceilings. After a successful stint at the Crown Prosecution Service, she moved into corporate law in the late 1980s, joining Sony as legal adviser and swiftly being promoted to be the company's first female general manager. This was followed by a spell at management consultancy Proudfoot, where she slashed legal costs substantially.

In 1996, Switalski joined Camelot as the lottery operator's first female director of corporate law services, then joined F&C in 2000, where she became director of worldwide legal services.

At the same time, Switalski played an active role in the Daily Mail Women's Forum, which promotes the involvement of women in business, as well as establishing the Legalpulse website, which provides companies with low-cost access to basic legal documents and information.

In order to juggle the demands of so many activities, as well as caring for two disabled sons, Switalski had a flexible working arrangement in place. According to Switalski's counsel, this arrangement did not go down well when she began to be managed by F&C company secretary Marrack Tonkin. "She had flexibility in place, but then Tonkin took over and things started to change," said McKie. "The time she had off was in part a consequence of the difficulties with her sons. No-one suggests she was not a capable lawyer and all her appraisals were fantastic."

One of the key issues arising from the case that will be on the minds of senior in-house lawyers is the practicality of flexible working arrangements. "One striking feature of the case is the apparent tension and conflict surrounding her flexible working arrangements," says Andreas White, an employment lawyer at Kingsley Napley.

Samantha Mangwana, an employment specialist at Russell Jones & Walker who represented a claimant in a sex discrimination case against BNP Paribas last year, says discrimination cases often arise after there has been a change of manager. "This case was a bit different than the majority because generally flexible working issues are common for a woman coming back from pregnancy," she says. "This case is more about her childcare issues and how she was treated differently to male colleagues."

Indeed, the tribunal heard claims that Switalski was intensely scrutinised about her flexible working arrangements by her line manager while a male colleague, who also had a disabled child, was given time out of the office.

Aside from interest in the specifics of the case, in-house lawyers will be watching to see whether Switalski's high-profile claim will have a negative impact on the widespread perception that a career as a company lawyer usually delivers far better work-life balance than private practice.

Emma Wilson, a former head of legal at Hasbro, who now acts as a consultant to in-house legal departments, says this case should not put off women seeking a successful in-house career as well as flexible working arrangements. "Some of it is down to what you have done before you had children – you must have demonstrated your value," she says. "It is important to remember that employers have to make concessions at times for working mothers and it is key that working mothers match that flexibility and commitment. Working in-house can be more accommodating than working in private practice."

Mark Prebble, former general counsel of SGS and ICI and founder of consultancy Lawyers in Business, says it can be difficult in practice to deliver genuine flexible working: "A lot of organisations profess to be champions of flexible working but give people portfolios that make it difficult to honour that flexibility. The nature of a lot of these jobs means it is very difficult to deliver."

Prebble stresses that staff using flexible working arrangements must demonstrate that they are delivering in terms of their own performance. "The worker has to make sure they are not taking liberties and may have to put in extra effort to eradicate any suspicion," he says.

Indeed, one of the issues in the Switalski case appears to have been her line manager's perception that she was not fully concentrating on company work. F&C's counsel told the tribunal: "There is considerable evidence that the claimant spent a large proportion of her time on matters not related to F&C but her own businesses."