Know the Law, Mind Your Business, and Immerse in Your Industry - ABA YLD 101 Practice Series

By Ethan Baumfeld

It's worth noting that in 2006, the median age of an in-house lawyer was 45.6 years old. 1 So, if you are a member of the ABA YLD, or are otherwise YLD eligible, (less than 35 years of age and/or engaged in the practice of law for less than 5 years) and you are currently ensconced (about to become ensconced) in a much-coveted in-house counsel position, then you may consider yourself very lucky, very talented, or both. Either way, you are probably pretty happy to be where you are so early in your professional career.

So, as you start out, or if you recently started out, on your life as an in-house counsel here are some things you should know to stay happy (and to keep your client 2 happy).

Know the law on in-house lawyers.
Much like the rule against perpetuities did, by the time you took your property final, at some point the law on in-house lawyers will become manageable. Just make sure to keep the latter fresh in your mind, as the former was likely forgotten the minute you turned in your bluebook to your professor. As in-house counsel, you must always be cognizant of the fact that you don't enjoy the same protections, nor have the luxury of entering into the same clearly defined attorney/client relationships, as your "outside" brothers and sisters of the bar.

To be effective at what you do, you will need to master Upjohn v. 3 United States, and keep abreast of its progeny, and the jurisdictional nuisances thereof - what may be a privileged communication in Iowa, may not be afforded the same protection in California. If you work in-house at a public company, you should familiarize yourself with your company or legal department's "Part 205" 4 policy - even if you don't handle corporate securities matters. Ignorantia juris non excusat - even for in-house lawyers.

Mind your business and immerse in your industry.
Recently, my good friend, Chuck Bass called to tell me that he had just landed his dream job as an in-house counsel at the Carbolic Smoke Ball Company. He was hired from the media law practice group at McKenzie, Brackman, Chaney and Kuzak to replace the former marketing and advertising counsel who was unceremoniously fired after having approved the ill-worded, and ultimately very costly advertisement in the Pall Mall Gazette 5. I congratulated my friend on his accomplishment and told him he should take some vacation before diving into his new role. Chuck explained that while he didn't have to start his new job for two weeks, now was not the time for immersion in the pool at the Tangiers Hotel in Las Vegas, but instead it was the time for immersion into the his new business and industry.

Chuck told me that when his mentor at McKenzie Brackman, Art Corevelay, learned he was leaving the firm for an in-house position at Carbolic, Art sat him down and gave him some sage advice. Art explained that while Chuck might think that his firm grasp of marketing and advertising law, his occasional (and responsible) use of smoke balls, and the fact that he could quote any scene from Wall Street, would be the only tools he would really need on day one, the reality was that Chuck's legal advice, and by extension, Chuck's value to the company, would be severely limited without a firm understanding and eventual mastery of Carbolic's business, and the carbolic acid remedy industry in which the company operated. Art noted that as in-house counsel, Chuck's legal advice could not be provided in a vacuum, and that each time Chuck would be called on to provide such advice, Carbolic would expect him to identify, evaluate and reconcile the relevant legal and business risks associated with a particular issue.

Chuck listened while Art went on to explain that it was becoming more and more common these days for companies to expect their in-house counselors to actively participate in the development, execution, improvement and defense of their strategic business vision and plan. As such, companies were relying on their in-house lawyers to not only bring to bear their legal expertise, but to display a strong and thoughtful business acumen as well. Chuck would be expected to develop, hone and constantly improve upon his business "intelligence quotient" if he wanted to be successful in his new in-house role as a manager of both legal and business risks. Lastly, Art reminded Chuck that he would not be able to dispense advice to Carbolic's executives, in the same way he did with his colleagues at the law firm, or with his former clients' in-house lawyers. To be successful, Art explained, Chuck would have to be accessible. Simply put, Chuck would have stop talking like a lawyer, while continuing to think like one. Chuck would have to abandon the Black's Law Dictionary definitions in favor the proper business or industry terminology. Chuck would have to use layman's terms to educate company employees on important business law concepts so as to ensure that his message was received and understood. Finally, Chuck would have to make sure that Carbolic's business staff found him to be approachable, personable, and responsive to their various legal needs.   

Chuck took Art's advice to heart, and over the next two weeks began his immersion:

The past, present and future of the smoke ball and the carbolic acid remedy industry.
Chuck's first stop was the bookstore where he picked up the bestseller, "When Smoke Gets In Your Eyes", about the creation of the smoke ball, and subsequent rise of the American carbolic acid remedy industry. Chuck's purchase gave him an appreciation for how his company began, the industry in which Carbolic operates today, and where the industry wants to go tomorrow.

The legal and regulatory framework governing the smoke ball and the carbolic acid remedy industry.
Next, Chuck called up ABA Member Services and joined the Health Law section, and its Carbolic Acid Remedy subcommittee 6. In addition, he made sure to sign up for the Health Law section's Carbolic Acid Remedy "Boot Camp" for lawyers new to the industry, where he would get a clear picture of the legal and regulatory landscape surrounding Carbolic and the carbolic acid remedy industry.

Political and business issues affecting the smoke ball and the carbolic acid remedy industry.
After getting his ABA membership squared away, Chuck had Carbolic sponsor his membership in VAPOR - the carbolic acid remedy industry trade association where he was able to access a host of white papers on important political, and business issues confronting the industry. Chuck also signed up for VAPOR's annual conference for industry public relations and communications professionals, so that he could network with, and learn from those who were responsible for crafting the industry's message to the public, medical community, government, and other constituencies.

The ins and outs of the Carbolic Smoke Company - The Listening Tour.
Lastly, and with help from human resources and the general counsel, Chuck went on a listening tour - setting up several one-hour introductory meetings with business units all over Carbolic, including: R&D, manufacturing, sales, operations, IT, compliance, finance, and of course marketing and advertising, so that he could take a moment to introduce himself while learning about each business unit's operations; their related legal needs; and their unique contribution to the daily and long-term success of Carbolic. Chuck made sure to use his notes from these meetings to create a list of internal subject matter experts, so that in the future he would know to whom he should reach out for background on a particular business or legal matter.
Rest assured, that after Chuck's business education and industry immersion, he took my advice and eventually made it out to the Tangiers before he reported to Carbolic.

As a newly minted in-house counsel, knowing the law, minding your business, and immersing in your industry are just a couple of ways you can begin to maximize your value to your company on day one, or shortly thereafter. But, if that all fails, rest assured you can pretty much clean up any disaster and get the job done by injecting healthy doses of self-deprecation into any situation - the business staff always loves good lawyer jokes.

1 Nate Raymond, Philip Morris Suit May Signal Trend of Age Discrimination Claims by In-House Lawyers, Corporate Counsel Magazine, Nov. 29, 2007.

2 Your company is your client. If you did not realize this until just now, then you should not admit that fact to anyone - ever.

3 Upjohn Co. v. United States, 449 U.S. 383 at 394 (1981). The United States Supreme Court held that the attorney/client privilege extends to a communication between a company employee and a company lawyer where: (1) the company lawyer who received the communication from the company employee, was acting in her official capacity as a company lawyer and was receiving the communication for the purpose of rendering legal advice to the company; (2) the communication itself was related to the official duties of the company employee who made the communication; (3) the company employee was informed that the communication he was making to the company lawyer was being used by the company lawyer purpose of providing legal advice to the company; and (4) the communication was confidential when it was made, and the company has kept the communication confidential

4 17 C.F.R. Part 205 (Standards of Professional Conduct for Attorneys appearing and practicing before the Commission in the representation of an Issuer) was adopted by the Securities and Exchange Commission (the "SEC") on January 23, 2003 and became effective on August 5, 2003. Part 205 imposes various duties on various classes of lawyers who represent public companies when they discover the existence of a material violation of law as defined in the regulation. More YLD or more junior in-house lawyers may wish to pay particular attention to section 205.5, Responsibilities of a Subordinate Attorney.

5 For those of us who slept through Contracts I: [1893] 1 QB 256.

6 It goes without saying that Chuck also joined the YLD's Corporate Counsel Committee.


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About the Author

Ethan Baumfeld is Counsel at Health Net, Inc., a Fortune 200 managed health care company based in Woodland Hills, California. Ethan is a member of the ABA YLD Corporate Counsel Committee and can be reached at for questions or comments about this piece.

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