IN-HOUSE CONFERENCE: large firms should be willing to offer fee estimates, says Asda lawyer

The Higgs report on non-executive directors has given more power to general counsel but has blocked their route to the boardroom, senior in-house lawyers heard last week.

Nick Holt, managing partner of City firm KLegal, told delegates at a general counsel summit that former banker Derek Higgs' far-reaching review in January has made companies cautious about inviting legal advisers onto boards.

He said: 'Today, it will be much harder for the general counsel to sit on the board.

The perception of independence will be just as important as the reality of it.'

He said general counsel must change their relationships with non-executive directors.

'Most non-execs are not interested in seeing general counsel - you must force your way in.

If they do not fully understand what they should be doing, it is the general counsel's job to educate them.'

Philip Bramwell, general counsel at communications company mmO2, told the conference, organised by The Economist: 'There is a big difference for any captain between a hole above the water-line and a hole below it.

Non-executive directors [who should be looking for the hole] are typically time-poor, and lack the corporate staff to test what they are told.

It is up to the general counsel to know where the water-line is.

'There has never been a better time to be a general counsel - the difference we can make is great.

But we are professional practitioners, and we should not form part of the executive management team.'

Meanwhile, Denise Jagger, general counsel at Asda, complained that some top firms are too unwilling to provide estimates of their fees.

She told the summit that in-house lawyers should be more demanding in the fee structures they request from law firms.

She said: 'With some magic circle firms, I get the impression that they are very reluctant to work out the likely cost of a piece of work.

But smaller firms can do it, and at Asda we are able to do it - and so I don't know why some other firms can't.'

Ms Jagger said Asda normally agrees a whole job or elements of a job on a fixed-fee basis rather than accepting hourly rates.

She cited recommendations from other clients as the best means of choosing external legal advisers.

She said: 'General counsel should all use personal recommendation more for choosing lawyers.

I am always being called up by other general counsel asking me who we use at Asda, and I make an effort to respond.

'I also use lawyers whom I have seen acting on the other side.

But as for directories, I have never understood the economics of these.

Selecting a lawyer from a directory seems a curious thing to do, although you may want to use a directory to confirm a name once you have already selected.'

Ms Jagger and her 13-strong legal team will be packing bags at Asda checkouts before Christmas to raise understanding of the business.

Rachel Rothwell