Rightful Rivalries

N. Orlova, partner for tax and company law, FBK:

— Rivalry only arises whenever your personal equity and ego come to exceed your company’s interests. Should a corporate legal counsel happen to be uncertain as to what his bosses think of his performance, he would desperately seek to prove he “really earns his bread” and there is no need for external lawyers to be attracted.

Both corporate and external lawyers operate within the same professional arena, while actually supporting a single customer in the form of either company management or shareholders. Ideally, given a sound synchronization of project management processes by the customer’s directors, there should be no grounds for rivalry as external and internal lawyers join their forces in a united effort. Clearly, compounding the knowledge and skills, exchanging experiences and collaborating in a clearly defined manner could only help reduce customer costs and eventually produce better performance.

Generally, consultants are attracted to sequentially tackle the kind of tasks that happen to be rare one-off jobs for staff legal counselors. By way of example, restructuring a group of companies nearly comes to be a once-in-a-lifetime affair for any given group of companies. Just to remind, tax-related arguments require the knowledge of tax/arbitration law and relevant practices, while any regular taxpayer might only confront that sort of situations whenever financials need to be comprehensively reviewed. To emphasize, better consulting firms hold the right kind of talents equipped to effectively track the aforesaid sort of projects.

А. Bychkov, head of legal consulting, Profconsult:

— The issue of rivalries between corporate lawyers and external consultants has been ardently debated for some years now. In my judgment, underpinning those rivalries has been a focused competition for relevancy/ trust on the part of the given company and for budget financing allocated to track the specified business.

Speaking about the self-perception maintained by corporate lawyers, they hold they might be more knowledgeable and competent in their line of business than external consultants. To add, they believe external lawyers merely command some superfluous knowledge of their customers' business. And most importantly, the costs of external legal services have been unreasonably overblown and they are no longer in sync with the quality of support provided.

Most corporate lawyers tackle run-of-the-mill tasks, thereby letting their professional skills and competence levels eroded, according to external legal consultants. Importantly, corporate legal counselors do not command the right knowledge and skills relating to specialized fields of law. Neither do they possess the choice of legal tools and strategies needed to tackle assorted business-tasks that could be effectively performed by external consultants because those generally hold a broad range of experiences reflective of numerous and disparate projects supported by a multitude of varied customers. Apart from that, corporate lawyers are invariably swayed by the current company politics and directors' attitudes.

Benefits of attracting external legal talents come to the fore whenever some specialized knowledge is needed to support that or other project. Besides, external legal advice could hardly be overestimated whenever company directors require an independent and unbiased opinion on a given project’s risks and prospects.

V. Ushkalov, partner of Pleshakov, Ushakov & Partners:

— Rivalry between corporate and external lawyers primarily comes from the following two basic reasons: the internal legal counselors being fearful of external consultants revealing some blunders committed by the former in their day-to-day engagements, and reciprocal understatement of each other’s competence.

Law firms have the following strengths: more extensive and profound knowledge of the legal matters and lines of business that corporate lawyers generally do not practice; prompt exchange of “actionable intelligence” with colleagues; capability to build up a team of experts to address a specified issue that goes beyond the capacities held by a corporate lawyer or company-level legal department.

Clearly, a good mix of industry and company-specific knowledge held by a corporate lawyer and the expertise commanded by external legal consultants, that are generally more knowledgeable about specific lines of legislation pertaining to resolving a concrete conflict or implementing that or other project, could produce a most meaningful economic synergy. In addition, a corporate lawyer could achieve some time savings and boost efficiency of his regular effort, while shifting responsibility for a challenging task onto somebody else. Maximum benefit can only be attained when corporate and external lawyers do not cross their ways as they go about performing their functions in order to provide the requisite legal services.

S. Sazonova, first deputy general director, Marka Audit:

— I do not think the issue should be considered in terms of competition. After all, the notion of competition can only be made applicable whenever you have a case of incompetent or half-competent corporate legal counselor, the circumstance clearly forcing the company management to turn to external consultants.

To underscore, corporate lawyers have always been trained to address specialized industry-related problems that can be very specific by nature. While internal legal advisers are constrained by some company-level policies and guidelines, external consultants operate in the much larger arena and command broader competencies. Even when company lawyers are superior professionals, sometimes there emerge problems that are no longer routine and that make the company management look out for alternatives. It is then that the need to attract outside experts comes to the fore.

External legal advisers likewise command the following advantages: greater leeway in making decisions and better capacities to tackle multidimensional tasks. Given the circumstance, collaborating with external legal talents comes to be most handy for corporate lawyers because they can quickly pick up some invaluable expertise needed to comprehensively tackle a problem and come to know of new ways to perform unorthodox tasks.