How to identify your client as an in-house lawyer
One of the advantages of working in-house is working with just one client.
This allows solicitors to immerse themselves in how their client works, to be closer to their challenges and to gain wider industry knowledge.
All solicitors are under a professional duty to act in the best interests of their clients. But when working as an in-house solicitor, who exactly is your client?
Superficially, this may appear a simple question to answer – your employer. However, there are many scenarios where this may need more careful consideration.
Almost all employers will be a legal entity, which could be a limited company, a partnership, a limited liability partnership, a public body, or a charity.
The employer may be a single entity operating on its own or be part of a larger group of organisations.
The structure of the organisation where an in-house solicitor works will have an impact when considering who is the ‘client’.
It’s therefore important for you to have a clear understanding of your organisation’s structure.
Conflicts of interest
All organisations must operate through its people, mostly its directors and employees, and your role will involve taking instructions from individuals within the organisation when legal advice is required.
In most circumstances, the interests of the individual providing the instructions and the interests of the organisation will be aligned.
However, there will be occasions where this may not be the case.
An example would be where an organisation’s sales director approaches the legal department to urgently advise on a sales agreement.
On review, the in-house solicitor considers that there are significant risks associated with the agreement which are outside the parameters of what is normally agreed.
On highlighting these risks to the sales director, they are told the risks are appropriate. There may be awareness that personal bonuses may be affected by the sales agreement being entered into.
In this situation, an in-house solicitor’s ultimate duty is to the organisation.
If the in-house solicitor considers the organisation’s interests are not being protected, and there are potential conflicts of interests, then the matter should be escalated to the organisation’s board or senior management team.
This will ensure that risks are highlighted and known within the organisation, and will document this in writing.
Competing internal interests
If your employer is part of a larger group of entities, you will likely be providing legal advice to each legal entity within the organisation.
There may be a situation where you are asked to advise on a matter where separate parts of their organisation have competing interests.
Alternatively, you find yourself being asked to put in place an agreement between two different legal entities within the organisation.
In both scenarios, you may not be able to independently advise two competing business areas. Providing advice to two competing clients with different interests could be in breach of their professional duties.
If placed in that position, you should make sure it is clear which legal entities they are able or not able to represent, highlighting their professional duties to senior stakeholders, if required.
By their very nature, joint ventures are operated by more than one organisation and create a higher risk of conflicts arising. Therefore, there are additional considerations you should consider.
First, what is your employer’s percentage interest in the joint venture? Is this interest large enough that it would be considered part of your employer’s organisation, and can be given advice?
Second, you must consider whether there is any conflict of interest with your employer’s organisation and other shareholders of the joint venture in connection with the advice being required.
In any organisation, you may find yourself being approached by a director or an employee seeking advice on their own personal liability on a matter when acting in their role in which they are appointed or employed to do so.
You might also be approached by an employee who has a dispute with their employer and asks the legal department for advice.
In both scenarios, it must be made clear that an in-house solicitor is not a personal adviser to individuals and that ultimately the client must be the organisation.
Legal professional privilege
An overarching consideration for an in-house solicitor is how to ensure legal advice provided is protected by legal professional privilege.
To be protected by legal professional privilege, the advice must be a communication between the client and its lawyer.
Therefore, on a particular transaction or matter it is important to identify the individuals who will be seeking and receiving legal advice as the ‘client’ and to document these.
These are most likely to be the individuals who will communicate with the legal advisers and make key decisions on the transaction or matter.
Ultimately, the role of any solicitor is to ensure that they are providing accurate legal advice to their client.
Working as part of an organisation requires in-house solicitors to be able to step back and consider who their client is.
In the event of any concerns or conflicts of interests, these should be escalated appropriately to a senior level and any risks properly raised and documented.