Ready, steady, go: setting up an in-house legal department

Whether you are sole counsel or part of a new team, setting up an in-house legal department offers a great opportunity to create something tailored to support your organisation. Shereen Farah Hamid provides some practical tips to get started

Two women talking across a desk in an office

I’ve been involved in the set up and expansion of in-house legal departments over the last 10 years, often within public listed companies with cross-border operations. Based on my experience, here’s some practical guidance to help you get started. 

Know your ‘client’

Your client is not just the organisation, but rather the relevant functions and units that make up the organisation. 

A good understanding of the organisation’s structure, business operations and the regulatory environment will help to establish its legal needs and requirements. For example, you can:

  • obtain feedback from colleagues
  • review corporate documents
  • observe operations via physical site visits
  • sign up for conferences, events and news alerts
  • become a member of industry-specific organisations
  • consider engaging with external consultants for their professional opinion 

A simple online search can also provide a vast amount of information. 

Knowing the organisation’s objectives is also important in determining the level of its receptiveness to its legal needs and requirements being addressed. Speak to colleagues to determine receptiveness to past legal advice, review documents on legal matters, and attend any regular operational meetings to stay well informed of current business activity. 

Establish and manage expectations

The next step is to consider the reasons for the creation of a legal department now. Whether or not a job description has been crafted for you, it is important to establish the organisation’s expectations of the legal department and whether such expectations can be met. 

As well as speaking to management, any feedback from colleagues on their past experiences on legal matters involving the organisation will be helpful. Based on my experience, such engagement can also alleviate any pre-misconceptions about a legal department and foster a collaborative understanding of how legal advice and input can be sought and given. I have developed many interpersonal relationships because of this approach, which has created more ownership and teamwork.

Depending on the organisation’s size and any specific corporate compliance requirements, I recommend you set out in a written memo or procedure the following points for easy reference:

  • the establishment and function of the legal department
  • its roles and responsibilities
  • what type of legal work is carried out
  • how legal work is dealt with (such as turnaround time and modes of contacting the department)
  • areas which will require the engagement of external lawyers 

This not only puts the department on the map, but also helps set clear boundaries from the onset, to allow the department to run more efficiently.

Define Legal’s role 

The department needs not limit itself to just providing legal advice and support. Consider if there are any other areas where you can contribute effectively.

Compliance

By this I mean reviewing and drafting of internal and external policies and procedures to ensure compliance with applicable laws, rules and regulations, and identifying any areas of improvement.

Conduct training on such policies and procedures to ensure understanding, and have the relevant stakeholders affirm compliance through periodic written declarations and questionnaires. 

If the organisation is part of a public listed group of companies, legal input can be given on corporate documents such as board papers, stock exchange announcements, annual and quarterly reports, and sustainability reports. I have had the privilege of being involved in such matters, which has broadened my knowledge of and involvement in business strategies and activities. This is an area that the department can greatly contribute to. 

Risk management

This involves periodically identifying any actual or potential legal risks that will affect the organisation and providing legal advice on how the risks can be mitigated and addressed. 

Consider establishing a separate legal risk register or contributing to any existing register the organisation has. Attend any risk management meetings or become a member of any risk committees.

Knowledge-sharing

You should consider sharing legal knowledge and information with the rest of the organisation as additional guidance and support. 

Send out periodic email alerts to the business. Conduct training on any updates to regulatory requirements affecting operations or on other relevant legal topics. This is a great opportunity to not only demonstrate your skills to your internal clients, but to also further establish your presence and deepen your impact as an in-house lawyer. 

Over the years, I have noticed internal clients have asked me for further advice on topics raised in an email alert I sent or a training course I held. Some have even approached me on ‘new’ topics, as they see me as the organisation’s presence and authority on legal knowledge and training. 

Creating template documents such as non-disclosure agreements can address the legal needs of your internal clients and protect the organisation’s interests, whilst teaching them about the function and importance of such documents. 

Periodic review

Set department targets and goals to measure and manage performance and optimise productivity. Set a budget and monitor the department’s workload and completed matters to determine efficiency and how matters have been addressed. 

Get periodic feedback from your internal clients via satisfaction surveys or discussions on your department’s performance, from which you can identify any areas for improvement. Consider lessons learnt and areas of focus, and set timelines to address these. I have found this extremely useful, as it creates an opportunity to improve and strengthen the relationship and communication between your department and your internal clients. 

You want to establish the legal department as an essential and effective cost centre.

Appointing external counsel

Streamline communication with external counsel and other third parties towards the legal department, as, ultimately, you should be the custodian for all legal matters.

Determine which matters need to be outsourced to external counsel and which firms can assist. Establish a panel of external counsel, which should be periodically reviewed if there are no clear procurement procedures in place. 

Empanelment is also a good reference for the department when there is an urgent need to appoint external counsel and it provides justification to management for such appointments, as your panel firms will have been properly vetted. Many empanelled firms I have worked with are already familiar with the organisation, so it makes for a quicker turnaround time for advice.

Resources 

Your relationship with panels can also offer access to further resources, such as newsletters, seminars and training, secondment opportunities, cross-border legal resources, and connections with other industry stakeholders. 

Optimise the available talent, expertise and experience within your organisation by engaging with colleagues to learn more about technical or operational matters that can help you when providing legal support to the business. 

Over the years, I have learnt a lot of invaluable technical and operational knowledge from colleagues, which has greatly helped in my approach to providing legal advice. This is particularly important where the organisation’s business activities are in specific industries that involve a lot of technical expertise, such as I have found working in-house for organisations within the energy, oil and gas and shipping industries. 

Training and development

Create a department culture of continuous learning to keep the team updated on the regulatory environment and ensure that your knowledge and skills can keep up with the legal needs and requirements of the organisation. 

In my experience, the department should set out yearly targets and goals for training and development. Based on feedback from your internal clients, you can identify areas of improvement to focus on.

Establishing an in-house legal department is a rewarding and invaluable opportunity – enjoy every moment. 

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