As in other places in the world, the internal legal departments of Israeli Hitech companies are growing. Thus, they are measured more like other departments in such companies, i.e. per performance and budget. As a result, the sophistication level of such departments in the manner they purchase legal services increases.
That sharpened external law firms need to understand what characteristics are important to internal legal departments when they acquire legal services. Of course, the regular criteria – professionalism, experience, availability etc. – is important to legal departments as well. But, do legal departments have special measures?
I engage with legal consulting to Hitech legal departments for approximately 18 years. Sometimes I even acted as a sort of an internal legal counsel. Recently, I had a series of calls with internal legal consultants I have worked with over the years to examine the question I raised here.
The clear conclusion is that there are two critical criteria in legal departments election of external legal counsels:
- Business understanding of the company – legal departments expect external lawyers to know and understand the company’s business and needs. This general statement includes studying the company’s business goals and culture (for example, the extent of risk the company customarily takes in various contexts). The expectation is that the external lawyer be familiar with the way the company manages its business, for instance internal procedures customary for transactions. Actually, internal departments wish external lawyers to be, in many senses, a part of the department.
- Business orientation – internal legal consultants are interested in external lawyers engaging proactively to move deals forward, in due balance with protecting legal interests of the company. The external lawyers is required to enable transactions (not hold them up), including through thinking out of the box. He is expected to understand that the commercial aspect is more important than the cold legal aspect.
I believe that if you implement the aforesaid, your chances to win legal departments as clients shall increase.
What do you think? Does that suit your experience? From your experience, how do legal departments choose their external lawyers?