Taking Matters into Their Own Hands: Corporate counsels balance in-house expertise with outside help

When the health system has in-depth questions related to regulations in the health care industry, Elmer calls Blackwell Sanders.

If malpractice issues come up, she turns to one of several area attorneys who specializes in those cases.

Deciding what can be handled internally and what requires outside assistance is one of the key jobs of any in-house counsel.

“If I can do it in-house and have the time, I do it or my assistant counsel does it – I want to save the system money,” Elmer said. “If I don’t have the time, or if we don’t have the expertise in house, we send it out.”

Numerous organizations – from city government to large corporations to the area’s health systems – have one or more legal advisers on the payroll. While the types of organizations may differ, general counsels all have a few things in common – most notably that they live up to their name.

“They’re called general counsel because they deal with so many issues,” said CoxHealth CEO Bob Bezanson. “Here, there are business issues, contract issues, employee law, liability claims, malpractice, licensure, accreditation, regulatory issues, real estate, ethics, and the list goes on and on.”

Elmer, who has served as CoxHealth general counsel since 2004, said her experience with a large private firm allowed her to gain the wide legal background necessary to be a general counsel; she spent five years in the Springfield office of Blackwell Sanders before joining CoxHealth.

“In private practice, you specialize. So your expertise is narrow, but it’s deep,” Elmer said. “As a general counsel, your knowledge is very wide but not so deep. You know a little bit about everything – and you know when to bring in outside help.”

Asking for help

In an increasingly complicated business environment, organizations are depending more on legal advice, from both in-house and outside counsel. The 2006 Chief Legal Officer Survey, conducted by the Association of Corporate Counsel, found that 80 percent of surveyed companies planned to hold steady or increase their use of outside counsel for legal matters.

“My use of outside counsel has increased substantially over what it was 15 years ago,” said Dennis Sheppard, general counsel and chief financial officer for Springfield-based SRC Holdings Corp. He said that while the increased need is due in part to the company’s growth and its geographic coverage area, it’s also due to more regulations on businesses. “The number of laws and legislation and all of the rules and regulations for businesses has increased severalfold,” he said.

Advantages

With such a need for outside assistance, it might be easy to wonder why companies would have counsel on staff at all.

But there are many reasons why it’s important to have in-house legal representation, according to John Twitty, general manager of City Utilities of Springfield, where John Black became general counsel Dec. 1.

“He’s also a member of the executive committee, he’s involved in conversations about managing the business, and the advantage of having him in that role is that you can head problems off before they almost become problems,” Twitty said of Black. “The world is a very technical one, and many questions have a legal angle to them. The fact that John is in on any conversation of any magnitude from Day 1 pays rich dividends for us.”

One of those dividends, Black said, is being able to focus time and energy where his legal skills are needed.

“My experience with in-house counsel is that we try to take on a lot, and the judgment to bring in someone else comes when you say, ‘We have as much as we can do and do well here, so we need to get folks to help us,’” Black said. “You might save a nickel by not hiring outside counsel, but the exchange is not doing as good of a job.”

Another advantage is being privy to company decisions as they’re made, rather than having to jump into an issue after it has progressed to the point of requiring major legal intervention.

Sarah Kerner, general counsel for Springfield-Branson National Airport, said that while each of the 12 members of the airport’s executive staff have their own jobs, she knows most of what goes on at the airport.

“I get called into a lot of meetings, and I see things from the very beginning, whereas before I usually got a call when someone was sued,” said Kerner, who spent three years as an associate at Ellis, Ellis, Hammons & Johnson PC before joining the airport staff in November 2007. “Here, I get to know the personalities – I can almost guess how people will react to things. I enjoy my work the most when I know as much as I can about it. That’s one of the reasons I like my job.”

And the ability for attorneys to be involved on the decision-making process from Day 1, according to City Utilities’ Twitty, makes in-house counsel a worthwhile investment.

“(Black) is about 15 steps from my office, and we talk many times every day about topics in his sphere of influence,” said Twitty, who estimated that the utility would spend far more per hour on outside counsel than it spends on Black’s $175,000 annual salary.

While the Springfield Metropolitan Bar Association has not done any studies or surveys to determine the average hourly billing rate for Springfield-area attorneys, SMBA Executive Director Crista Hogan estimates the rate to be about $150 per hour. At 40 hours a week, that would create an annual salary of $312,000.

“You just couldn’t get that same kind of service with an outside counsel,” Twitty said.

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