Feature

posted 22 Jun 2010 in Volume 12 Issue 12

Roundtable: Secondments

How do law firms and in-house legal teams tackle secondments? Three experts share their insights with Editor Manju Manglani at a managing partner roundtable.

Participants

Neil Torpey, chair of Hong Kong office, Paul Hastings

Deepak Malhotra, general counsel and senior vice president, Constellation Europe

Frank Maher, partner, Legal Risk

What kind of secondments have you been involved with?

Neil: Our secondments have principally been targeted at significant strategic clients of our firm, and in some cases with governmental agencies that either we have client relationships with or that are involved in certain areas of the law that we or our clients have a significant interest in.

Frank: My personal experience with my previous firm is key clients very much expected and wanted secondments from their panel. If it wasn’t from us then they’d be getting it from other panel firms and it would be detrimental to our relationship with them if we weren’t seen to be playing ball and joining in. My involvement now is with the bigger firms that are looking at their secondment arrangements with their clients.

Deepak: I work for Constellation, the world’s largest wine company, so the lens that I’m looking at this through is as a purchaser of legal services. In-house resources are, generally speaking, quite lean, there isn’t a huge amount to go around and yet the demands of corporations have increased. Secondments provide a very important and valuable resource and can help to sometimes plug the gap, and so that’s why certainly I’ve been using them for the past 7 or 8 years now.

Have you found that secondments have generally met their intended purpose?

Deepak: I think from my perspective, the short answer is absolutely. If you are proactive in the process of choosing the secondees, you can actually bring in people who have had secondments at other organisations or, because of their broader client contact, can bring some examples of best practice into your own organisation. Also, when the secondee goes back to the law firm, he or she is going back with a level of understanding about how we do things and about our business, which can only enhance the relationship.

Neil: Typically, if it’s done right, it has the effect of creating or enhancing the personal relationships between the secondee and all the people inside the client who the secondee comes into contact with. That can be invaluable to us as a firm in terms of generating additional work but, at least as importantly, generating within our firm a much better understanding of the dynamics within the client’s organisation, the personalities, the politics, the priorities, where things are going inside the business, and all those things which help us to better position ourselves, to do more work for the client and to do a better job on a much more fully informed basis.

As a footnote, sometimes we get paid for providing secondments, sometimes we don’t get paid or we get paid on a basis which equates to something other than the person’s typical billing rate. So there definitely may be an investment associated with a secondment.

What would you say are the short-term benefits for law firms?

Neil: I think it can be a very valuable thing for the individual lawyer, particularly in a setting where he or she may be doing a particular type of transaction or matter on a repetitive basis. He or she can get good at these things by doing a whole bunch of them in a relatively short period of time, so there may be significant opportunities for personal growth.

Frank: I think the other thing is that sometimes you get clients who have a panel of firms and they might not give your firm particular types of work that they give to other firms, it’s a bit of a vicious circle, you can never really break into it because you haven’t done any before. And the fact of having somebody going to the clients and getting exposure to the full service that they are looking for across the panel can sometimes open up opportunities for you and for work that you wouldn’t have otherwise got from the clients.

Deepak, have you given work to firms based on secondments, when you haven’t done so previously?

Deepak: I think inevitably, when you’ve got secondments working for you from the law firm, it will be a beneficiary. There will be a flow of work that will go back to the law firm, either via the secondee or by virtue of the fact that there is a secondment arrangement. I think typically, in my experience, the law firms that have seconded individuals into us have had the good sense to have that conversation with us as a client up front, i.e., to say that they are going to send in a secondee but clearly they have a level of expectation about receiving work and, whilst we don’t give any guarantees about it, the fact that we have a secondee does strengthen our relationship.

What would you say are the common risks or problems from secondments, and how are these best managed?

Frank: Potentially, you’ve got liability issues on insurance coverage, exclusion of liability, supervision, money laundering – who do they report to, conflicts, confidentiality, coupled with information barriers, employment issues because you may have a temporary transfer of employment in some circumstances, and finally the risk of losing key staff because those who go to the client don’t come back!

You’ve potentially got conflict and confidentiality issues when secondees go to the large legal departments. They are going to pick up information relating to other panel firms and might become privy to information such as a forthcoming panel reselection process and the charging rates other panel firms are being allowed. There’s certainly got to be a conversation with the clients at the outset to determine what the limits are, particularly if the client is expecting the firm to do some sort of supervision as the secondment progresses, because they probably are expecting the secondee to be able to ring up a partner and obtain a bit of extra advice that way.

Neil: I think that one of the things we fret over the most in connection with a secondment is making sure we send the right person. We will sometimes get requests from clients in the course of a year for a secondee who is of a particular vintage or from a particular practice area, and on occasion we will struggle, just because of the level of busyness in that particular practice area, to find a person who is suitable to send to that secondment.

Deepak: Secondees are typically expected to be able to make a very positive and full contribution from day one. So that does create a bit of a risk, and that’s something that we in the in-house legal function team in managing the secondee need to make sure that they are being set up for success. We need to give them the right induction and the opportunity to find their feet in the business. But then at the other end, at the point where the secondee leaves, that again creates a performance risk for us, because that resource that we’ve been relying on who has come to know the business and has come to make a very positive contribution, is suddenly gone!

What would you say are the areas of improvement for secondments?

Deepak: I think where secondment programmes may perhaps need to be worked on is what happens when the secondment is brought to an end, i.e., to what extent do the returning secondees then use their insights and experiences to better equip their law firm in terms of offering a progressively better client service. In some secondment situations that I’ve seen in the past, when the secondee has gone back to the law firm, there hasn’t been any kind of constructed debrief or a lot of the things you would have expected the secondee to feed back in terms of ways of working. Behaviours actually don’t seem to change in any way the client service is being provided, and I think sometimes that provides a little bit of frustration for clients. Law firms should use the insights of the secondee to take the client relationship to the next level and I think if that doesn’t happen, it’s a wasted opportunity for the law firms.