Conference: General counsel summit advises caution

General counsel and company secretaries should be careful not to stray over the frequently blurred line between giving strictly legal advice in a professional capacity and advising on strategic and operational day-to-day commercial activities, delegates at an in-house lawyers conference were told last week.


Speaking at the fourth annual European general counsel summit in London, Philip Bramwell, general counsel and company secretary at O2, said: 'In-house lawyers must be at board meetings so they know what's going on and can advise accordingly. But they must be of the board, not on the board.'


One delegate, who asked to remain anonymous, warned that in-house solicitors are at risk of becoming shadow directors of the companies they work for, with all the duties and liabilities that the position involves.


The delegate added that there had even been cases where external law firms, called on to advise at board meetings, had found themselves in difficulties over their alleged involvement as shadow directors of the client company.


Mr Bramwell replied that it was essential for in-house lawyers to get a detailed job description to avoid these problems.


Peter Graham, chairman of the Law Society's company law committee and a consultant at Berwin Leighton Paisner, later confirmed to the Gazette that a professionally qualified in-house counsel who advises the directors of the com-pany on legal issues would not become a shadow director merely because the board is accustomed to following his advice.


Mr Graham added: 'It would be very surprising if a court were to hold that an in-house lawyer was not acting in a professional capacity merely because he was employed by the company concerned.'