Global oil and gas giant Royal Dutch Shell’s in-house team of 650 lawyers has saved the company billions of dollars by slashing external spend, its top lawyer revealed last night.
From being ‘mere gatekeepers’ 26 years ago, when legal director Donny Ching joined the company, in-house lawyers have now become ‘business partners with a seat at the table’, Ching (pictured) said.
He was speaking to fellow general counsel at the launch of the Law Society’s GC350 engagement programme, an initiative to promote the changing role of in-house lawyers.
Shell’s in-house team developed standard commercial contracts covering the 70-plus jurisdictions the company operates in – halving the numbers of lawyers involved and saving billions of dollars in external spend.
‘It was an example of a great business outcome, and one that came from an in-house lawyer who not only encouraged and influenced the decision to proceed with standardising contracts, but who then co-led the project and influenced the business outcome,’ Ching said.
Ching also believes that external law firms would have been no substitute for in-house lawyers in the work they did to build the world’s first floating liquefied natural gas (LNG) facility, Prelude FLNG.
‘The real challenge was not that we were going to build one of these, it was to say “think about what business opportunity does this create?”.
‘Lawyers had to really draw extensively on what we know as lawyers and what the company knew in relation to all these aspects, as well as LNG sales, LNG plant and construction, shipping, construction, safety regulation, procurement, intellectual property and environmental law.
‘Trying to put all this together and not just build a contract to build one – but to build many and have a business model for it.’
He added: ‘This is something that had never existed before. It was not an easy task... I believe that no external law firm could have pulled this together for us.’
Backing the Society’s initiative to promote and understand the role of in-house lawyers, Ching said GCs had three distinct advantages they could bring to the table: insight, intimacy and influence.
‘Intimacy, together with insight, gets us invited to the table,’ he said. ‘To truly guarantee our seat, we need to influence. We need to demonstrate that we don’t just influence legal outcomes, we influence business outcomes as well.’