BEYOND LAW: UNDERSTANDING THE STRUCTURAL DESIGN OF INHOUSE LAW PRACTICE

Legal departments differ greatly in sizes and shape. Major business corporations over the world have restructured their in-house structures to suit their need and stay up to date with modern times. Triggers for restructuring have been brought about by the realization of the growing risk, due in some cases to compliance breaches. Other triggers are attributed to the modern change in the role of CEO’s/ board functions and operations. These issues give rise to three competing factors these being (a) legal functions and the mirroring of the corporate structure (b) the legal budget and (c) the optimization of the legal resources internally and externally.

A Closer Look

?Looking from the outside, it is difficult to see what the different functions within an inhouse practice may stand for. But legal departments will need to mirror the corporate structures which their organizations represent.

When it comes to size, this will highly be dependent on the operations (domestic or international) of the business. With the above mentioned, it is easy to identify the complexity that comes with freedom to choose among the limited functions which inhouse practice may take.

In most organizations, the legal department is situated at the company headquarters. Especially in a company without an international presence. This form of structuring gives an opportunity for the General Counsel or Director Legal the ability to oversee all the inhouse lawyers under his/her charge. It is argued by Professor Marri Soko that Inhouse lawyers may not be able to give the best advice if they are remote from the other business units. Thereby warranting that the structure must be narrow and situated in one place preferably the company headquarters.

?In another school of thought, the structure is encouraged to be decentralized, allowing Inhouse counsel a chance to acquire intimate knowledge of the business they support. However, this form of structuring hinders the sharing of best practice and optimal allocation of legal resources with other business units.

Several multinationals have restructured their legal functions, to give business lines greater responsibility for profit or loss. In situations like these, regional and country heads of legal face high demand for their time, this is because their focus is not only at country or regional level, but also in executive management activities.

The Legal Department – A Standard Mirror for the Business

Depending on what the core business of the organization or institution is, the legal function will sit in to mirror the different facets that constitute the said entity. This gives the department a better footing to advise and where necessary defend the institution.

Take for instance the structure of the legal function in Zambia’s largest pension fund. It constitutes of Five (5) Units, these being Contracts, Regulatory and enforcement, Governance, Affiliates and Litigation and Corporate Advisory. Each of this units sits to mirror the overall organizational structure, offering technical legal support to the core business of the organization (collecting contributions from members) and having it invested. The Regulatory and Enforcement Unit will help the business demand and prosecute defaulting clients, while the contracts unit will ensure legal coverage of the entity’s engagement with other legal persons.

If structured well, the legal department allows for the employment of different legal specialist. Each of them having their own part to play in the final analysis of advising the organization. This strengthens the cooperate governance conduct of the organization and places it on a better trajectory where legal compliance is concerned.

Conclusion

Legal departments in Zambia should now begin to evolve with the changing times. Where need be, they must have adequate personnel to mirror the different functions of a given entity. This will allow for specialization of the lawyers as is being encouraged by the global community and the Law Association of Zambia.