In terms of a lawyer’s monopoly, one of the most burning issues is the issue of interaction between in-house counsels and outsourced counsels involved. Taking into account the restrictions on representation as defined by new procedural codes, the proportion of litigation to be accompanied by external counsels has increased significantly. This provides for a need to develop clear algorithms for cooperation between in-house counsels and the counsels involved.

Division of competencies and tasks

It’s worth mentioning that after a lawyer’s monopoly has been introduced, more companies prefer to differentiate the functions of an in-house counsel

specializing in profile legal relations related to company’s economic activity, and external counsels who have the right to practice law. The latter are temporarily involved in performance of forensic work, building strategies for minimizing risks from cooperation with mala fide counterparties, mediation and solving single goal tasks within certain projects identified by customer. As a result, there is a need to develop an optimal model of cooperation between in-house counsels and outsourced counsels.

Such interaction is always directly dependent on specifics of customer’s internal organizational structure and its business area. However, general binding principles can be defined.

As a rule, an efficient and flexible interaction between customer’s and contractor’s counsels requires a clear division of functional duties and competencies within the project. Such a division is aimed at avoiding overlapping of responsibilities of persons involved and minimizing communication, which does not contribute to the achievement of project objectives. As a result, performance efficiency of professional tasks assigned to certain project participants should be increased.

Regardless of the project essence, the main objectives of other in-houses counsels must include identification and internal approval of project objectives, as well as information and documentation of counsels involved. In this case, identification of objectives must be distinguished from the outline of certain tasks which are necessary for their achievement.

In turn, competence of outsourced counsels must include identification of ways to achieve an objective and preparation of a general strategy to support the project with disclosure of certain issues that will or may have an impact on the outcome. The above is due to the fact that, normally, involvement of external counsels provides for a greater level of competence for solving certain tasks that go beyond the daily professional issues of an in-house counsel. Thus, an external counsel, in view of his/her professional knowledge in a single matter area, will be more efficient in defining specific tasks to be performed to achieve project’s objective.

It is also expedient to refer matters related to assessment of possible risks during the project implementation, their impact on ability to achieve objectives and development of a strategy to minimize them to competence of outsourced counsels.

At the same time, building a cooperation algorithm based on a clear division of competencies and tasks must always be carried out at the initial stage of a project. Only in this case we can minimize risk of professional competition between in-house counsels and outsourced counsels.

Establishment of communication

Algorithm for information exchange and operational communication on a project also needs to be seprately planned. It is advisable to build it based on information exchange through persons who carry out operational control and project management for a customer and contractor. The same understanding of how to achieve project objective between the teams of counsels must be developed.

Furthermore, taking into account the current environment, process of constructing such an interaction must take into account not only the information needs of company’s management and counsels, but also those who carry out internal risk management and financial planning in customer’s company.

Performance of a corresponding pre-project work consequently results in rational division of competences of team members, a clear definition of their functional responsibilities and boundaries of professional responsibility, construction of a clear and transparent communication system. All this makes project participants more interested in its efficiency.

Efficiency rules

Therefore, answering the question “What type an interaction between in-house and external counsels in terms of a lawyer’s monopoly must be?”, it is necessary to distinguish the following rules to achieve a more efficient model:

  • division of functions and responsibilities of in-house and external counsels;
  • minimizing communication that does not contribute to the achievement of project objectives;
  • communication through persons who carry out operational control and project management for customer and contractor;
  • definition of project goals and objectives;
  • full informational and document support of external counsels;
  • development of an algorithm of cooperation at the initial stage of a project.

However, assessing the current state of development of interaction between in-house counsels and external counsels, it should be noted that modern cooperation algorithms are being applied more and more often. This, in turn, stimulates further development of efficient cooperation between in-house counsels and external counsels.

Kostiantyn Kurylchenko, senior associate, dispute resolution practice

exclusively for “Law and Business”  №16 (1366) 21.04-27.04.2018