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In-House Lawyers Need to Be Part of the Business Team

In-house attorneys shouldn't keep the rest of the company at arm's length. That's the message from PayPal's Chief Business Affairs and Legal Officer, Louis Pentland. "As an in-house lawyer," Pentland explains, "the best you can get is when you're integrated with the business team."

That means forgoing the more traditional role of simply identifying and advising the company on risks, while allowing others to make the final decision.

Not a Law Firm Inside a Company, but a Part of the Company Itself

Before she joined PayPal, the in-house legal department was barely integrated into the online payment company, Pentland tells Bloomberg's Big Law Business. "It was almost like a law firm inside the company. People didn't go to the business meetings. They weren't on the leadership teams."

"It was a very strange structure, in many ways."

There's risk associated with such a setup, as Pentland tells it. When in-house lawyers "sit in the background and say, 'Here's the risk, you decide,'" it's easy for people to go "lawyer-shopping because they don't like the answer," she explains. "There was no accountability."

To reshape the department she oversees, Pentland has taken efforts to bring lawyers into the business, she tells Bloomberg.

People weren't assigned or aligned by business initiatives. It's a team of 200 people, so it's not a small team. I immediately aligned people with their primary responsibility, dedicated to their teams and the businesses they supported. It was so welcome; businesses were crying out for it.

That integration led to results.

So bringing that in didn't just improve the quality of the work, but a sense of pride. You worked harder when we launched a new product. You were part of the team that made that happen and you feel good about that.

Now Pentland is looking for a similar approach when dealing with outside firms.

Law firms are a true extension of my team, which is why I became so adamant that any law firm we were bringing on needs to be complementary to the culture - not just in their work product, but [in] who they were. We want diversity in our lawyers, and people who are innovative, and that led me to really drive down the focus of which law firms we want to work with.

The best outside partners are those who've moved beyond traditional thinking about the role of the lawyer. They're "big firms who are really starting to think like corporations," Pentland says.

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