House Counsel versus Outside Counsel?

Abstract

It is often mentioned that some rivalry does exist between lawyers in general practice and house counsel.¹ Theoretically the existence of the company legal department could make the employment of outside counsel unnecessary. But this theory has not been proved correct, because even in companies with a large, highly developed and specialized legal department there is still a wide field of activity for outside counsel. Even a well staffed and well-organized law department cannot supply all the legal services required by a large company and its affiliates. Therefore company lawyers are making increasingly more effective use of outside counsel. It should not be overlooked that there are discussions on this subject, especially in countries where jurists, working in company legal departments as employees of the company, are admitted to the bar, as in the USA, the United Kingdom and the Federal Republic of Germany But also in countries where jurists with a permanent employee-relationship to their company cannot be admitted to the bar, the attorneys at law sometimes tend to look at the members of legal departments as competitors who take away prospective work from them. It is not necessary to mention that this is not the case and that this opinion prevails with practitioners who do not work regularly with company legal departments. Outside law firms are frequently used and have proved most useful to industry. Instead of rivalry, which fortunately is disappearing a natural division of labour has developed — work of one nature is handled almost exclusively by house counsel and work of another nature is turned over almost exclusively to the law firms.²