Guide for in-house lawyers

In very basic terms, in-house lawyers are trainees or qualified solicitors who don’t work in private practice.  However, it’s a hugely diverse group and there is no such thing as the “average” in-house lawyer. 

The number of in-house lawyers in Scotland continues to grow.  Around two thirds of in-house lawyers work in the public and third sectors including: the Crown Office and Procurator Fiscal’s Service; central and local government; public bodies such as the NHS or Police Scotland; and charities. The remaining third are employed across a range of commerce and industry including: financial services; energy; media; and construction

As an in-house lawyer you should give legal advice exclusively to the company or organisation which employs you.  You should not normally be giving advice to members of the public or third party organisations.

In-house lawyers in certain organisations have been given powers under statute to provide legal services to bodies other than their employer.  For example, the Common Services Agency, which includes the Central Legal Office and which is a division of NHS Scotland, has power under the Public Bodies (Joint Working) (Scotland) Act 2014 to provide legal services to regional health boards and other NHS bodies in Scotland. More information on this particular issue is available in our news section.  If you are giving advice to third parties, you should always be mindful of the potential for conflict of interest to arise.   

You are an employee.  Your role as legal adviser is therefore governed by employment law or the law relating to the contract under which your services are being provided.  

Although your employer is your client, you must also maintain your independence by ensuring you adhere to the law and comply with the relevant practice rules.  The ability to remain intellectually and technically independent from your employer has been confirmed by court decisions (for example see Crompton v Customs & Excise Commissioners [1972] 2 All E.R. 353).

Independence is very important as it serves both the interests of the organisation and the interests of the public by integrating respect for the law and professional ethics into business practices or public services.

Being an in-house lawyer is very different for everyone.  It also can be very different from working in private practice.  However, all solicitors are united by the requirement to observe the relevant practice rules at all times.  Professional ethics are just as important for in-house solicitors as those in private practice.

CPD requirements are the same whether you work in-house or in private practice.

In-house lawyers are also subject to the jurisdiction of the Scottish Legal Complaints Commission.

In-house lawyers often have very varied roles and your job may be much more than just giving legal advice.  A key skill is being attuned to the business needs of the organisation you work for.  That way you can take a commercial and common sense approach to advising your employer.    

As you are being instructed by your employer or colleagues, you may not receive the same level of specific instructions which clients provide to private practice solicitors. This means the scope of your role could be very wide indeed.  You may need to be more proactive in assessing risks, identifying issues and resolving problems.

Flexibility and adaptability are important attributes. You may be expected to have a good general knowledge of the law, rather than be expert in one specific area.

Some in-house lawyers have company secretarial duties and risk management responsibilities or, if working in the public sector, you may become involved in developing and advising on policy.  This makes for a challenging and diverse workload, but it’s also a great opportunity for professional development.

Depending on the size and structure of your employer, you could be the only legal function in your organisation or you could be one of a team of many in-house lawyers.  In either case, you will almost certainly be working with colleagues from different parts of the organisation who will be crucial to the successful performance of your duties.  Unlike in private practice, relationships with those who are instructing you won’t necessarily finish at the end of a project or transaction.  You should take the time to build good working relationships with colleagues and learn how their roles interact with your own work. 

Communicating effectively with others in your organisation is vital.  Avoid legalese and speak your colleagues’ language. Adapt your tone and style depending on your audience.  Be practical and provide examples to illustrate your points. No matter how complex the legal position, it’s your job to make it as simple and understandable as possible to your internal “client”.  Think about what the key risks are, how likely they are to materialise and the consequences if the organisation gets it wrong, then advise accordingly. 

If you have a current practising certificate, then your title can be “solicitor” or a relevant derivative such as “lawyer”.  If you don’t have a practising certificate, then you can’t use “solicitor” in your title.  Having a practising certificate should be seen as evidence of meeting certain criteria in the eyes of the Law Society, your employer and the wider public.  To hold yourself out as a solicitor when you are not, is an offence under s31 of the Solicitors (Scotland) Act 1980.  If you want the job title that implies you are currently entitled to practise as a solicitor, then get the certificate!

Alternative titles in-house lawyers commonly use include “legal adviser” or “legal counsel”.

In addition to the professional standards which being a solicitor entails, your employer may impose further requirements.  For example, if you work for central government you will be subject to the Civil Service Code.  Most private organisations will also have strict ethical codes and in some cases these are required by sectoral regulation (e.g. in financial services). Other corporate policies, covering areas such as social media, intellectual property, conflicts of interest and protection of information, may create specific security and confidentiality requirements.

Your employer should provide you with necessary additional and / or specific guidance on your role as an in-house lawyer for that organisation.  Make sure you familiarise yourself with all policies and procedures which apply to you as an employee.

As well as knowledge of the law, you will need to develop a comprehensive understanding of the environment you work in. 

Public bodies are governed (and constrained) by their establishing legislation.  Take the time to familiarise yourself with this legislation and what it means for your employer.  

A private sector organisation may not have governing legislation, however, it will have cultural and political drivers which shape the way it does business. It is equally important to understand such drivers so that advice is not given in a vacuum. 

You will also need to consider which countries your employer operates in.  If the organisation has international operations, think about whether you need to seek advice from your in-house colleagues abroad (if any) or external counsel in the relevant jurisdictions.

Whatever environment you work in, you will need to continually maintain objectivity and a degree of independence, while being aware of (but not unduly influenced by) commercial or political pressures.  This can be difficult at times, but the rewards of a good in-house role can mean that you become a business expert, as well as a legal expert.

In-house lawyers are entitled to work for two or more organisations at the same time or in-house and in private practice at the same time.  However, you would need to advise each organisation of your involvement with the other(s) and obtain their consent.  In addition, potential issues of confidentiality and conflict of interest should be considered.  If there was any risk of a breach of either, it would not be sensible to take on multiple positions. 

An in-house lawyer can’t be self-employed. Anyone in such a position would instead be providing services as a contractor under a commercial service agreement.

Occasionally you may need to source external legal advice, for example on a particularly specialist issue or in relation to a jurisdiction you’re not qualified to advise in.  You may also find you need support if the volume of work required for a particular matter is too great for the size of your in-house team.  Where you instruct external legal advice, you will probably be acting as both the lawyer (for your organisation) and the client (of the external adviser).    

Your organisation may have restrictions on who you can instruct.  For example, they may have panels of external advisers for particular types of work, which have been put in place following competitive tender processes. Likewise your organisation may already have a particular process for instructing external solicitors. Therefore, it’s important to check your organisation’s policies before you instruct an external solicitor.

As an in-house lawyer you can instruct an advocate or barrister directly via the appropriate clerk.  It’s not essential to go through a private practice law firm. 

Direct instruction can work well for obtaining advice or an opinion, particularly given the detailed knowledge that an in-house lawyer has of their organisation.  However, instructing counsel through a law firm could be helpful for smaller in-house teams who may lack the capacity to administer litigation.  There may also be circumstances where you want to outsource litigation to a firm which can maintain a degree of detachment or independence from the case.

• Take care to demarcate the external lawyer’s role and your own.  If boundaries become blurred, you risk duplicating work and there may be little value in your employer seeking external advice.
• Get clarity on costs before they are incurred and who in your organisation is responsible for paying them.
• Test potential firms by seeking general advice on a question or subject you know.  If you receive a well communicated response, you may be more confident obtaining advice on less familiar areas.
• Establish ongoing, sustainable relationships with law firms, but keep these fresh by holding regular reviews.
• It’s a two way relationship – ensure your instructions are clear from the outset.
• Do the background work to make sure you get counsel with the relevant specialism. 
• Ask questions to advocate’s clerks about expertise and find out detailed information on track records. 
• Don’t be afraid to have a serious conversation with the clerks about time and costs in advance of instructing.
• Keep track of your experiences and contacts by maintaining a database of: who you instructed; what you instructed them on; how they performed; and the cost.

All solicitors are subject to the jurisdiction of the Scottish Legal Complaints Commission (the SLCC). 

The majority of complaints against solicitors which are investigated by the Law Society or the SLCC are made by clients.  As an in-house lawyer, your client is also your employer.  It is therefore less likely that a complaint would be made against you.

However, there are two additional circumstances in which a complaint could be made:

1. A complaint about a legal service can be made by someone who has been directly affected by that service.  This includes someone other than the client, such as “the other side” of a transaction or court action.
2. A complaint about professional conduct can be made by any person. This is not limited to people involved in the work which gives rise to the complaint.  It is important to note that a complaint can be made about conduct in your personal life as well as your professional life.  

Any complaint regarding anything done in relation to the prosecution of a crime or investigation of a death by a procurator fiscal or Crown Office counsel should be referred to the Crown Office’s own complaints procedure.  

Further information on the complaints process can be found elsewhere on our website or on the SLCC’s website.  Advice and guidance on complaints can also be obtained from the Professional Practice team on 0131 226 8896.

All solicitors holding a practising certificate are liable to pay the levy which is used to fund the SLCC’s functions.  It is the responsibility of the Law Society to collect this from every solicitor.  In recognition of the fact that in-house lawyers generate a low volume of complaints, they currently pay the levy at a reduced rate.

The levy is a personal liability, however, your employer may choose to pay this for you.  If you have any questions regarding payment of the levy, please contact the Registrars team.

The Law Society’s professional indemnity insurance scheme (the Master Policy) is not available to in-house lawyers.

Usually an organisation will put in place professional indemnity insurance arrangements for its in-house lawyers.  Some larger commercial organisations and central government self-insure in respect of legal advice from their in-house solicitors. There is no legal requirement for this insurance to be in place so it’s a good idea to check whether your employer: (1) has professional indemnity insurance arrangements which provide cover for legal advice by an in-house lawyer; or (2) self-insures.

If you are asked to give any advice which falls outwith your remit, for example one of your colleagues or managers asks you to give them personal legal advice about the sale of their house, a personal dispute or a divorce, it’s highly likely that this would not be insured. Think carefully before giving any such advice, as you could be faced with issues of personal liability.  In addition, you should always consider possible conflicts of interest (see section below).

Conflicts of interest can arise in-house as well as in private practice. A potential conflict of interest may not be immediately apparent. To spot a conflict you should ask yourself:

• Am I being asked to give advice to someone other than my employer?
• Am I being asked to give advice on a subject matter which is outside the remit of my employment?
• Do I have a personal interest in the matter I am being asked to give advice on?
• Where two parties are involved in the same matter, would my advice to the parties be different?

If the answer to any of the above is yes then you should carefully consider your position and consult the practice rules relating specifically to conflicts of interest.   

Examples of potential conflicts in a public sector environment include:

• A local authority setting up a company or agreeing to be a shareholder in a company.
• One public body setting up a joint venture with another public body. 
• Providing advice to “related persons” who are not your employer, for example government ministers, elected members of local authorities, committees or key stakeholders.  Your role as an in-house lawyer is to get across your employer’s position in relation to any particular project, transaction or issue, not to provide legal advice to individual officials, committees or stakeholders who may have different requirements, perspectives and political interests.

 Examples of potential conflicts in a private sector environment:

• Your employer seeking advice on a restructure which could adversely affect you or your colleagues (for example by necessitating redundancies in your team).
• Your employer, a bank, seeking advice on an issue with the bank account for a charity which you are a director of in your spare time. 
• A director of your organisation seeking advice on a personal employment matter or other issue.

Sometimes a conflict of interest will be easy to identify, but in many cases it won’t be.  If you think a conflict exists, refer the matter to your line manager or superior.  You can also obtain valuable assistance with any query related to a potential conflict of interest from the Professional Practice team.

The duty of client-lawyer confidentiality is still important in-house and you should consult our guidance on this area if you are unclear. You may also be subject to additional confidentiality requirements under your contract of employment.

The doctrine of legal privilege is a cornerstone of our legal system.  It is important because it allows documents which are relevant, reliable and possibly decisive to be excluded from consideration in legal proceedings and regulatory investigations.

There are two types of privilege that can be claimed by a solicitor: (1) legal advice privilege; and (2) litigation privilege.  Legal advice privilege relates to communications between a client and lawyer for the dominant purpose of seeking or giving legal advice (on any area of the law).  Litigation privilege relates to communications, including those with third parties, which are made for the dominant purpose of ongoing or expected litigation.

There are two main reasons why privilege is different for in-house lawyers:

1. An EU law difference: under current EU law in-house lawyers are not covered by legal privilege in relation to EU competition law investigations (see Akzo Noble Chemicals Ltd v The Commission). However UK case law does recognise privilege for in-house lawyers who hold a practising certificate.
2. A practical difference: because in-house lawyers are often closer to their “client” it can be more difficult to prove that something was legal advice, rather than commercial advice.

The risk of legal privilege being lost can increase if the advice or document is circulated too widely internally. Although the legal advice will “belong” to the whole organisation, the legally qualified personnel who understand privilege may be very few.  There may be occasions when your colleagues, or a representative of the organisation, wish to quote from or rely on part of the legal advice.  This may result in the loss of legal privilege for the entire advice / document.  Some practical tips on privilege are set out below.

The Freedom of Information (Scotland) Act 2002 (FOISA) aims to increase openness and accountability by enabling any person to obtain information from a Scottish public authority (for example central and local government, the police, the NHS).  Companies which are wholly owned by Scottish public authorities are also covered.

FOISA is enforced by the Scottish Information Commissioner. 

If you work for a public authority to which FOISA applies then you may have to advise on any FOISA requests that your organisation receives.  

Be aware that, although the advice you give may be subject to legal privilege (see section 18 above), there is no absolute exemption for such advice.  It is possible that the Scottish Information Commissioner will order your organisation to publish the advice if it is in the public interest to do so.  However, this is very rare. 

If you work in the private sector then FOISA can also be relevant if your organisation interacts with or gives information to a public authority or if a public authority holds information about your organisation.  Such information may be subject to a FOISA request and, if the request is granted, then it could be disclosed to the public. 

The Environmental Information (Scotland) Regulations 2004 (the EIRs) create a separate right to access environmental information. The range of bodies subject to the EIRs is wider than under FOISA.  All bodies which are subject to FOISA are covered, but private bodies which carry out functions of a public nature relating to the environment may also be subject to the EIRs. Environmental information is defined very widely and includes any information relating to the state of the air, water, soil or land and information relating to roads. Although the EIRs are similar to FOISA, it is important to ascertain which legislation the request should be considered under as there are differences between the two.  For example, the rules on how to make a request are different, as are the rules on charging for information. As with FOISA, there is no absolute exception for legal advice.

There are some practical things you can do which may help maintain privilege or prevent disclosure in a FOISA request.

• Make it a habit to label documents and emails containing legal advice as privileged and confidential.  This can be made clear either in the subject heading or a suitably worded notice in the footer.
• Avoid amending confidential or sensitive external legal advice and don’t quote from it in other communications.
• Limit the internal circulation of sensitive information on a need-to-know basis. Be particularly careful with email advice.
• Keep advice which you want to be privileged or confidential stand-alone.  Don’t include it in a document or communication which covers other things.
• Avoid creating unnecessary documents or written advice.  If particularly sensitive issues need to be covered with third parties, balance the usefulness of having a meeting or a telephone call to discuss with the need for a written note.
• Instruct external legal advisors if written advice is required on potentially troublesome EU competition matters.
• If getting advice from a non European Economic Area (EEA) external lawyer (e.g. a lawyer from the USA), have the document sent to you via an external lawyer registered within the EEA.
• If your organisation has its own “dawn raid” procedures for unexpected investigation visits by competition regulators, familiarise yourself with these. 
• Familiarise yourself with the provisions of FOISA (including what constitutes a valid request, the exemptions, the public interest test and so on). 
• Ensure you are familiar with your organisation’s own publication scheme (which contains details of the classes of information which it proactively publishes or intends to publish) and its FOISA policies and procedures. 
• Take care when providing written advice and drafting minutes of meetings etc., as these may be subject to a FOISA request later.

Only a solicitor holding a current practising certificate can act as a notary public.  There is nothing to restrict or prevent an in-house lawyer from acting as a notary and the usual guidelines should be consulted and followed.

If you are notarising documents for your employer, think carefully about whether this has the potential to create a conflict of interest.  For example, a conflict may arise in relation to a share scheme where you benefit as an employee and you should not act as a notary in these circumstances.

In-house lawyers working outside Scotland should read the Law Society's additional information on practice rights of Scottish notaries public in England and Wales.