As recession puts clients firmly back in the driving seat, Alex Aldridge asks senior speakers at Legal Week's flagship annual event for in-house lawyers what will be high on their agenda

In the run-up to the Legal Week Corporate Counsel Forum Europe – to be held in September – leading in-house counsel speaking at the event echo one mantra: out of every crisis comes opportunity.

In some cases that means pushing law firms far harder for value and implementing alternative billing strategies. Others are focusing on innovations such as offshoring work to cheaper locations and the implementation of improved technology.

Meanwhile, amid the uncertainty, there is much talk of how the general counsel (GC) role is set to change in a world more concerned than ever with managing regulatory and reputational risk. Many believe this could be a defining moment for the profession to demonstrate its wider contribution.

Driving firms down on cost

Belgian Post Group GC Dirk Tirez believes that the financial crisis represents a great opportunity for in-house legal departments to re-negotiate existing arrangements with external counsel. "During our recent panel review we found firms to be incredibly accommodating and ready to take into account the difficulties faced by companies. GCs need to take advantage of that," he says.

One of the main ways that Tirez has looked to cut costs is through pushing for fixed fee billing arrangements. He comments: "More and more we are seeing fixed fees applied across the board – extending from standard commoditised tasks to more complex litigation and negotiation work that would normally be associated with hourly billing."

SBC group counsel head of legal Richard Hennity is similarly intent on placing more pricing risk on law firms: "Firms can get away with murder if they charge you on an hourly basis," he says. But he adds that it is also important not to lose sight of the basics: "A lot of it is about doing the obvious things, like making sure you get a quote from a range of firms on a piece of work and imposing tight restrictions on the transaction, such as insisting on selecting which lawyers will be on the file."

Also looking for value is BAA's new general counsel, Carol Hui. "It is not just cost control, it's getting the best value. Good relationships can be developed by the offering of additional things like training seminars," says Hui, citing a recent Herbert Smith seminar she attended covering
the Company Act as effective.

The priority for Alison Hampton, general counsel at private equity house HgCapital, is ensuring that panel firms go that extra mile to assist her. "The sort of value add I look for is firms providing information about potential legislation in the pipeline, accompanied by explanations of how it is going to impact HgCapital." Hampton thinks that an ability to engage with businesses in this way will ultimately determine which firms retain panel places in an ever more competitive market.

Saving money through innovation

Not everyone is sold on the potential benefits of offshoring legal work – whether via law firms or through internal legal teams based in cheaper locations – but there is a growing number of in-house counsel ready to consider such options. Richard Given, emerging markets legal director at Cisco, believes that traditional relationships between companies and law firms will change as people begin to appreciate that a lot of what lawyers do is fairly commoditised. "If you need a bit of e-discovery, why not get paralegals in India to do it? The current online market means it does not matter where firms are based – and the fact that my team is spread from Mexico City to Moscow makes geography even less relevant."

Hennity is less convinced by the potential of offshoring, despite the fact that HSBC operates a small offshore legal team in Malaysia. "There is obviously huge potential with offshoring, but how real is it in the legal sector? Many of the current projects operated by law firms and in-house legal teams are, in reality, fairly small pilot projects."

Improved IT solutions may offer a more immediate way to save money. Thomson Reuters Europe, Middle East and Africa legal chief Daragh Fagan anticipates that in-house legal departments will increasingly adopt IT tools typically used in law firms – including electronic time-recording equipment. "If done in a loose way it is potentially not a bad tool for allocating where time and resources are going," he says. Fagan adds that technology enabling greater collaboration between staff working in different jurisdictions is also on his radar, but suggests that savings from such innovations would be more medium to long term, rather than a fix to get through the recession.

Expanding roles

With demand for expertise on compliance and risk management currently at a premium, many expect senior in-house counsel to take a more central role in companies' strategic planning.
"Streamserve GC Jeremy Evans believes that now is the time for in-house lawyers to be proactive and use their legal expertise to help the business make decisions. "It is about sending out the message that we can help – coming up with a clear statement outlining the role that the legal function can play in strategic planning," he says.

The Legal Week Corporate Counsel Forum Europe will be held on 15-16 September at the Four Seasons, Hampshire in the UK. For more information email [email protected]

Legal Week Corporate Counsel Forum Europe – speakers include:

• Peter Kurer, former chairman and GC, UBS
• Thomas Werlen, general counsel, Novartis
• Jeremy Barton, general counsel, Boston Consulting Group
• Dirk Tirez, general counsel, The Belgian Post
• Philip Bramwell, group general counsel, BAE Systems
• Carol Hui, general counsel, BAA
• Ian Jameson, senior counsel, Lehman Brothers
• Michael Williams, general counsel, Sony Electronics
• Daragh Fagan, general counsel, EMEA, Thomson Reuters
• Richard Hennity, head of legal, group counsel, HSBC
• Dennis Turner, chief economist, HSBC
• Charles Lawson, former general counsel, Rio Tinto