COMMERCE AND INDUSTRY LAWYERS BENEFIT FROM BEING EXPOSED TO PROGRESSIVE BUSINESS PRACTICES, TOM BLASS FINDSAt the annual dinner for the Law Society's Commerce and Industry (C&I) Group last month, the group's chairman, Paul Gilbert, made an unequivocal point about the under-estimation of in-house lawyers by the Law Society and the profession at large: 'I don't believe that the Law Society realises how important this sector [in-house solicitors] is,' he said.

Lawyers working in commerce and industry now number nearly 6000.

Together with colleagues who work in local government, we represent approximately 10% of the entire profession.'Mr Gilbert argues that the role of employed lawyers, who are close to the hub of business and are the major purchasers of legal services, places the in-house sector in a pivotal position.

A consensus is now emerging - in-house, in private practice and on the peripheries of the legal profession - that employed lawyers are very much in the ascendant and increasingly in a position to wield their influence.Alan Dunlop, general counsel at gas and oil exploration company Amerada Hess, says: 'In-house lawyers are seen in a better light than they have been, which was once distinctly second division.

But in recent years the balance has shifted.

The quality of lawyer is often as good in-house as it is in private practice, and from a corporate view, often better'.That different qualities are required in-house is a fact to which recruitment professionals are extremely sensitive.

Good in-housers are seen as needing more than superlative lawyering skills.

'They are there to make the company money', says London manager of the legal recruitment consultancy Daniel Bates, Guy Harwood.

'The company is going to ask: "is this a good lawyer?" but also "does he or she have extra commercial problem-solving abilities?" Companies want people who not only tell them what they can't do, but also come up with commercial alternatives.'There are many employed lawyers who are less convinced about Mr Gilbert's vision of their sector as the unsung heroes of the legal profession.

Citibank general counsel Laurie Adams says: 'It's true that working in an in-house team you have to be comfortable dealing with all the different disciplines involved in creating the product.

But as a lawyer in private practice, you also have to deal with PR people, accountants...

the whole gamut of professional people.

[Working as an in-house lawyer] is certainly very industry- and company-specific'.But Mr Gilbert is adamant.

'In-house lawyers have an intuition about the issues that are important to the legal profession as a whole,' he says.

'Working day to day in business, there is a sense in which you're contributing more than legal advice.

This is anathema to private practice [lawyers] who see themselves as offering a refined, and bespoke legal service.

My view is that private practice lawyers are no different to us, but that their training is inadequate and they don't have the same degree of commercial insight.'Mr Gilbert maintains that neglect of the in-house sector could lead to its interests being overlooked, for example, by the Law Society in its consideration of professional conduct rules.

Mr Gilbert says: 'If you have a straightforward private practitioner mentality, you might inadvertently disadvantage in-house lawyers through ignorance, when deliberating upon issues that affect the profession'.

An example of such an issue is multi-disciplinary partnerships.

'Theoretically it could be made unlawful to practise in an MDP,' says Mr Gilbert .

'Where would this leave in-house lawyers, who in a sense already practise in an MDP environment?'Mr Gilbert is doing more than sticking up for his side.

He maintains strongly that the pivotal position which in-house lawyers occupies between law and industry qualifies those in-house to address the deficiencies of business development in private practice.As a purchaser of legal services, he has found many law firms are complacent about the 'threat' posed by the prospect of MDPs - entities which may or may not be able to offer better legal products, but which are likely to be more keenly aware of how they can be marketed.

He says: 'I'm concerned that on certain fronts - tax advice, business and strategy planning - private practice may well lose quantities of work.

There is a lot of potential in law firms that simply isn't being realised.

The accountants just don't have the same hang-ups.

For example, I don't see any major law practices offering themselves as risk management auditors although it is something that they are eminently qualified to do.

If they don't confront these issues they'll see large chunks of work disappearing'.Julian Armstrong, general counsel at Esso and Mr Gilbert's predecessor as chairman of the C&I group, agrees that lawyers are not all that good at repackaging their services.

But he adds: 'Law firms are so busy that they don't really have a chance to take stock'.However, there are also those that argue that while the role of the in-house lawyer is increasingly seen as much more than a technical adjunct, those in-house still fall short in realising their potential.

Independent Corporate Mentoring is a training consultancy for employed lawyers founded by Peter Coleman and Tim Clement-Jones, both of whom previously practised at Grand Metropolitan Estates.

Mr Clement-Jones says: 'There is a long way to go before in-house lawyers are properly aligned to their business needs, but they just haven't had the training tools at their disposal'.For Mr Coleman and Mr Clement-Jones, it is high time that a training and accreditation programme was initiated to address the unique business role played by in-house lawyers, and equips them with the tools that will maximise their capacity within their company.Mr Gilbert says that in-house lawyers already have a head start when it comes to business instinct, and that as in-house and private practitioners are not separate breeds so much as two sides of the same coin, the latter should heed the experience - and requirements - of their in-house co lleagues.

And Mr Armstrong stresses: 'There is undoubtedly a sense in which the in-house lawyer is the first point of call for business people looking forward at things like minimising legal risk, or considering business strategy.

They are extremely well placed.

But private practice lawyers are indispensable in providing leading-edge legal advice where it does not make economic sense to have that leading-edge knowledge in-house.

The two are complementary'.JON ROBINS EXAMINES THE THINKING BEHIND A NEW INITIATIVE TO REASSESS THE TRAINING NEEDS OF THE IN-HOUSE SECTORThe Law Society's Commerce & Industry (C&I) Group this month embarked upon its most extensive revamping of legal training for in-house lawyers in its 37-year history.

Together with the management and programmes unit of the Centre for Dispute Resolution (CEDR), the group began a comprehensive consultation exercise with its members to ascertain their training needs.

Currently, the collaborative team is finalising questionnaires to be sent out to the 6000-strong membership.C&I group chairman Paul Gilbert is keen to stress the pre-eminence of the in-house lawyer within the profession.

Employed lawyers, he says, play a 'pivotal role', not just as providers of legal advice, but also as 'major purchasers' of legal services in this country.

Their contribution to the profession, he says, puts 'millions and millions of pounds' into the pockets of private practice solicitors.'Notwithstanding their tremendous success,' Mr Gilbert says, 'the training programmes which the C&I group has developed over many years are now to be reviewed and revamped, so that the challenges of the new millennium can be met head on with confidence.' The Law Society is contributing £20,000 to the project.At present, there is a large number of training courses available to employed solicitors; however, only two providers have the C&I Group seal of approval - CEDR and Peter Godber, an in-house training consultant.

Mr Godber's courses are aimed at updating lawyers on developments in the law, whereas CEDR concentrates on management skills training.Prof Karl Mackie, CEDR's chief executive, was involved with the development of the existing training programmes for the C&I group 15 years ago.

The CEDR course became a prototype for existing management skills courses run by the Law Society.

At that time, observes Prof Mackie, there were traditional attitudes within the profession about how lawyers managed clients and practices.

He says: 'It was clear that [in-house lawyers] were working in an environment where they needed management skills in order to learn to integrate effectively with business aims, while remaining objective professionals.'The course's first incarnation in 1984 was entitled - 'How to survive as an in-house lawyer'.

According to Prof Mackie, the title was a reflection of concerns about the independence of lawyers working in companies.

The following year, the course was re-born under the more assertive title - 'How to succeed as an in-house lawyer'.

The course is still running, and in many companies is considered mandatory for solicitors who are new to in-house practice.

It explores the role of the in-house lawyer, relationships with clients and external lawyers, communication and managing work skills.

Since then, two other courses have been added to the programme - 'From lawyer to manager', aimed at developing management awareness, and 'Managing corporate legal services', principally for managers and the heads of legal departments.Graham Clegg is a legal manager with British Telecom an d chairman of the C&I group's training activity sub-committee.

The starting point for the group's new research into the training needs of in-house lawyers was the identification of eight core 'management competencies' which, Mr Clegg says, are essential for a lawyer to succeed in a modern corporate environment.

An expert knowledge of the law is only one component, he says.

Other areas which a new training programme will attempt to embrace include skills in leadership, business acumen, managing corporate and client relationships and external relationships.Sapna Bedi, a newly qualified solicitor with Yorkshire Water, has never worked in private practice.

As a trainee, her experience was that courses available were geared completely to private practice.

Ms Bedi says: 'There's no point in going on a course if you are going to leave feeling like everything you've learnt you can't apply on a daily basis'.

And she says that was the impression she had after completing the professional skills course.The more senior a lawyer is within a company, the more complex the relationship becomes with the client.

According to Prof Mackie, in theory in-house lawyers have only one client, but in reality they have to relate to a whole series of managers on a continuous basis.

He adds: 'They are far more involved in organisational politics by necessity, in terms of understanding the strengths and weaknesses of various client departments they have to work with, and still have to match this against their proper client - the organisation.' This is an area where lawyers, he says, need to be trained.Jim Bruce, lead lawyer in the treasury department at the Halifax, divides the in-house role into two functions - transaction processing and risk management.

All the transaction work at the Halifax is out-sourced, and so the main component of his job relates to risk management.

Mr Bruce says he is not aware of any course which deals with the identification and approach to risk aimed at lawyers.According to Edward Smethurst, a lawyer with British Nuclear Fuels, one of the largest and most important jobs of the company lawyer is the purchase, acquisition and management of external legal services.

However, he notes there is 'precious little training' available and, as he says, if an in-house lawyer is managing the external legal budget for a major PLC he could control budgets worth hundreds of millions of pounds.IN-HOUSE LEGAL TEAMS AT TRADES UNIONS OFTEN FIND THE SIZE OF THEIR ROLE DEPENDS ON POLITICAL STRATEGY, WRITES NICK MURRAYRecent reports that the journalists' trades union, the NUJ, was considering transferring virtually all its legal work to a private practice law firm, Thompsons, when its current in-house solicitor leaves in April, have thrown a spotlight on the role of the in-house trades union lawyer.

Is this the start of a trend towards increased contracting-out of work by trades unions to specialist firms such as Thompsons, OH Parsons, Russell Jones & Walker, Pattinson & Brewer, and others? Are the days of the in-house trades union lawyer numbered?The answer from the big unions turns out to be an emphatic 'no', in spite of the fact that approaches to sending work out vary considerably from union to union.

There is clearly a major role for the trades union firms working alongside in-house teams.

The largest union in the UK is the public sector union Unison.

Legal officer Katy Clark points out that, faced with an awesome 40,000 ongoing personal injury (PI) cases, and with 15,000 new PI cases a year pouring in to the union's legal department, it would be impossible to provide a full service in-house.

Therefore, a decision has been made to concentrate in-house energies on cases where there is a strategic significance for the union.

Because of rising levels of violence at work, for example, and concerns about the way in which the Criminal Injuries Compensation Authority system has been working, Unison wanted to focus on such cases in-house.

'By doing a lot of casework you learn lessons about what should change,' says Ms Clark.

Armed in this way with fresh practical experience of the problems members face in the workplace, Unison thinks it is better equipped to make proposals for policy change.

In the same way, all immigration casework on behalf of members is done in-house.Not all Unison's advice work to members is handled by qualified solicitors.

Much of Unison's work around the country at industrial and employment tribunals is done by regional officials who are not lawyers and recent findings suggest that these union officials are getting excellent results at tribunals on their own.There are other issues which Unison wants to keep in-house.

These include transfer of undertakings, the rights of part-time workers, pension provision, work on equal pay, defamation, cases to do with the new working time directive, the minimum wage, discrimination against people with disabilities.

In short, says Ms Clark, any area which has strategic significance for the union.

The lawyer working in-house for a trade union, she adds, acquires experience in certain cases which would be more difficult to get in private practice - which is where most of Unison's lawyers have come from.

Because the work on the 2,000 to 3,000 in-house cases is more focused and more specialised now, the legal department feels it can make a better contribution to the union's policy initiatives, and lobbying to change the law on a range of employment issues.

Unison has the largest in-house legal department of any British trades union.By contrast the Transport and General Workers Union (T&GWU), also a large union, operates a different strategy dating back to the late 1960s when a decision was taken to close its in-house personal injury section.According to head of legal services Fergus Whitty, 95% of the T&GWU's cases are personal injury related - with £79 million being recovered for members last year - and the 30,000 cases being dealt with currently are sent out to a spread of 63 firms around the country.

They go to not just the big players such as Thompsons, but many smaller private practices in the regions with which the union enjoys a long-standing working relationship.

The union has three qualified solicitors at its London headquarters and four of the eight regional offices employ either full or part-time solicitors.

'We deliberately keep a skeleton staff,' says Mr Whitty, but he adds that it would be 'a dangerous move' suddenly to expand the in-house team.To do so would involve creating a large administrative and secretarial structure, and to maintain the current high level of quality achieved would mean substantial salaries would have to be paid to attract the right calibre of staff.

He is not convinced that doing work in-house is necessarily cheaper.Outgoing National Union of Journalists in-house solicitor Sally Gilbert does not agree.

She says: 'A union is more likely to run its cases more cheaply in-house.' The NUJ is rare in that personal injury is not the bread-and-butter of its case load - the vast majority of the work of the legal department is in employment tribunal work.

There is a fair amount of small county court work, dealing with payments to freelance journalists and breaches of copyright, but overall, with around 165 new cases a year, it handles far fewer cases than the big unions such as Unison and the T&GWU.

The advantages of an in-house lawyer, for Ms Gilbert, are that 'you're part of the business; they know you, you know the industry'.

The disadvantages can be a loss of distance.

It is much easier for an in-house lawyer to get bogged down and for too many people in the building to get involved.

If the work is done outside there is less likelihood of unnecessary interference.The National Union of Teachers (NUT) agrees about the need for its in-house lawyers to know the business.

Spokeswoman Olive Forsyth stresses: 'It's useful for solicitors to build up knowledge about how schools work as much as educational law'.

Most of its legal work is handled by in-house solicitors and caseworkers in London and the regions.

She says the wealth of knowledge built up by the NUT, whose senior solicitor has been with the union for over 20 years, would be 'difficult to replicate in an outside firm'.From the perspective of the outside firms such as Thompsons - whose offices are located in the same building as the TUC - the in-house solicitor still has a future.

'I can't think of a union without a legal department in some form or other,' says Thompsons spokesman and marketing partner Tom Jones.

'It's vital for every union to have some sort of handle on their strategy'.

Private practice solicitors also appreciate having a qualified legal officer with whom to deal.

In response to the suggestion that it is more expensive for a union to send work out, Mr Jones says: 'We are constantly creating new and innovative packages and cost arrangements with our clients'.

He says that outside firms offer a 'high-quality, low-cost service' and are constantly exploring new ways of meeting the legal needs of trades unions.In the end it is the volume of cases that will be the determining factor in the extent to which work is sent out, but as regards the exact balance between what stays in-house and what does not, that will continue to be set by the unions themselves for their own strategic and policy reasons.