One of the most important parts of any lawyer's job is understanding what clients want. So, to give you an introduction, we spoke to a representative of a bank, a type of client that, as a lawyer at a large commercial firm, you're likely to find yourself working with.
Our interviewee trained at a leading City law firm and spent four further years there before joining the in-house legal team at a leading investment bank, where she's now worked for over five years.
How do you decide which external law firms to use and how does the process of instructing them work?
We have a panel of ten law firms that we predominantly use. We review this panel every two years. Senior in-house lawyers speak to the firms that we already have solid relationships with and those that we want to develop relationships with to find out what they can offer us.
Legal knowledge and an ability to provide support across a number of legal fields are musts. But we'll also consider other things, such as whether a law firm will send us secondees, the extent to which lawyers will be available to answer questions, and whether they're prepared to offer us any training.
When I have a transaction coming up, I'll contact the appropriate partners at a few of the law firms on the panel and outline the transaction. Each firm will then provide a quote, after which we'll select the law firm to use, which might be on the basis of cost, or our client (for example, the borrower on a loan transaction) might express a preference.
I also use firms that are not on our panel. If I'm working on, say, a capital markets deal with a particular structure and one firm has been involved in two recent similar transactions, it makes sense for me to talk to that firm.
Why do you have in-house lawyers but still use law firms?
In-house lawyers are the gateway between the business side of the bank and external legal advisors.
We filter legal enquiries and requests from the rest of the bank, manage transactions and make sure that the legal, commercial and operational risks of a transaction are properly considered.
In-house lawyers will usually have come in from a law firm, so will have extensive legal knowledge. But on some transactions we'll need the niche expertise of external lawyers.
We also often use external lawyers to produce the legal documents required for a particular transaction from our instructions. The in-house lawyer will then review these documents from both a legal and commercial perspective, making sure in particular that the bank is adequately protected against risk.
An in-house lawyer might also contact external lawyers with ad hoc enquiries, which could, for example, be questions on current financial regulation or EU legislation.
What ways of working do you value in the external lawyers you use?
Depth of knowledge and expertise is obviously expected, and is essential.
Constant communication throughout a transaction is also important - information is key! My advice to external lawyers is as follows.
We expect you to stay on top of the deals you're working on for us. We'll give you initial instructions for a transaction and may set out a timetable for its progress.
However, there are a number of factors that can disrupt a schedule or throw up obstacles. If something occurs that you think we may not be aware of and should be, please tell us.
If problems come up, they can almost always be dealt with but we need to know about them straight away, not two days before a deal closes. Talking to us will make any problems a lot easier to solve, and we may find that after a quick conversation they disappear altogether.
If you want to understand a commercial aspect of a deal or to clarify the reasons for its structure, then ask. We may not always be able to tell you everything, but will appreciate you taking the time to consider these points.
I also value commitment, dedication and hard work on transactions when they're required.
When you're giving us advice, short emails are all well and good, but not if you haven't given me all the information that I need. I would rather have a longer email explaining the issues to me properly and also highlighting other points that I might not have thought to ask you about.
When we send our external lawyers ad hoc queries we understand that they may not be able to respond immediately. But a quick response or a referral to a colleague will be greatly appreciated, and it'll help us develop a good relationship, which can only benefit both sides!
We all work mostly over the phone or by email in this business, but I think it's helpful to get to know people personally and to build up a rapport with them, so it's great to get an invitation to an event, or just to meet for a coffee or lunch. If external lawyers make an effort in this way, it's much easier for us to call them with queries.
And then when the next transaction comes up, I'll be thinking: "They're great people at that firm and they've responded well to my questions - let's give them a try on this deal."