Duties of an In-House Counsel

Estine Okolo, Attorney base din Osobgo, Osun State.

May 12, 2019

By Estine Okolo                                                                     

        Abstract

The idea behind organizations engaging in-house Counsels is to help reduced the attendant legal risks associated with the policies and transactions of the company. Like every other lawyer, in-house counsels are subject to the relevant rules and regulations associated with the profession. The study highlights the brief history of the legal profession in Nigeria. It discusses the factors necessitating the drive by companies to engage the services of in-house counsels. The research methodology was desk and library based. Though, some of the duties of an in-house counsel are essentially what an average lawyer do on a daily basis, there are some specifics duties which are peculiar to an in-house Lawyer, especially  as provided by the Rules of Professional Conduct for Legal Practitioners in Nigeria. Detailed analysis of the duties are contained in this piece of work.  The research provided an insight on the need for in-house lawyers to be proactive, think ahead every potential transaction so as to be able to take steps to prevent or halt any likely legal unforeseen situation. The pattern of in-house counsel’s function put him at a vantage position to mitigate potential losses and several legally related multidimensional threats to the organisation. It is recommended that an in-house counsel should pay attention to details and words that appear harmless in conversation with opposing parties during negotiations or dispute resolution or any other functions relating to his duties for his employer.     

  1. INTRODUCTION

The Legal Profession has come a long way. It is a profession that cannot exist without references to its rich history.  Its past is as important as its present, because events that shape its history is still serving not just as a guide to current legal happenings but may possibly shape its future. 

From the humble beginning of the orators of ancient Athens[1], the legal profession has grown to what it currently is. It is one of the oldest profession, highly regulated and based on discipline of its members and of high ethical values. Within the geographical expression called Nigeria today, before the advent of our Colonial masters, there existed legal systems that were peculiar to the indigenous people of the heterogeneous communities[2].

With Colonialism and its aftermath, the British English legal system was introduced first to the Colony of Lagos in 1863 through the promulgation of the Supreme Court Ordinance. The Chief Justice was empowered to admit and enrol Barristers and Solicitors to practise in Nigeria with specific provision on those called to Bar in England Scotland and Northern Ireland.[3] The events that followed after the cessation of Lagos were prelude to the introduction of the British Legal System in Nigeria[4]. Lagos became a British Colony and all laws applicable in England became applicable to Lagos. The following years saw the evolvement of the Legal profession, with its teething problems. The initial problems ranged from lack of formal university education in law, lack of adequate knowledge of Nigerian Customary Law and legal system, lack of adequate experience and lack of proper regulation of the profession amongst others.

The foundation for it growth and the relevant regulatory framework which followed thereafter was based on the recommendation of the Committee headed by E I Unsworth[5] the then Federal Attorney General in 1959. The report of this Committee later lead to the enactment of the Legal Practitioners Act of 1962, the Education Act of 1962. Other recommendations made by the Committee which were later constituted were the setting up of a General Council of the Bar, institution of the Code of Conduct for Legal Practitioners, Disciplinary Control of the profession and the establishment of Law Faculty in Nigeria as well as Law School. It is not in doubt that tremendous transformation in the profession followed thereafter and  since then, it has continue to grow. Over time, the laws have since undergone several amendments. And from the first campus of the Nigerian Law School which was first set up in Lagos in 1962, several other campuses have been established. There is the Bwari, Abuja Headquarters, Lagos, Enugu, Bayelsa, Kano and Yola Campuses[6]. One must not forget to mention Sapara Williams CA   who is reputed to be the first Nigerian lawyer to complete full British Legal Studies. He was called to the Inner Temple on the 27th August 1880. He is considered to be the founder of modern Nigerian Law.[7]      

  1. WHO IS AN IN-HOUSE COUNSEL?

The multi-dimensional role which lawyers perform, may make it difficult to restrict an in-house lawyer to a strait jacket definition. Black’s Law Dictionary, Eighth Edition defines an In- house Counsel as one or more Lawyer employed by a Company. Even though the wordings of the subject matter appear simple there is still difficulty in placing a definition on it. And to overcome the limitations associated with every definition, an in-house lawyer can be described as a lawyer employed as part of the internal employee of a corporate body, company and agencies to perform legal duties. To say that every organization need an in-house lawyer, is simply stating the obvious. The role of in-house lawyers appears to be underrated, even though they play very important role in the proper functioning of the organisation which they belong to. In most cases, their functions are not restricted only to their professional duties.

Their duties are sacred, because apart from helping to protect the corporate integrity of the organization for those in such environment, it also assist in the promotion of the rule of law and protection of individuals against various arbitrariness of government and fellow citizens. The corporate goals of legal entities largely depends on the quality of input from the in- house lawyers.

The dynamics of business growth has continued to propel the need for in-house lawyers in corporate bodies and government agencies. As the business environment grows, so also is the need for such bodies to be proactive in their approaches to anticipating and solving likely legal problems.  

  1. DUTIES OF AN IN-HOUSE COUNSEL
  2. Dispute Management.

The primary aims of dispute management is to reinstate and possibly maintain a cordial working relationship. This relationship may be business, decision or competing interest among the parties. Unlike the more recent and popular Alternative Dispute Resolution, Dispute Management presuppose the existence of an established structure and mode of tackling disputes.  The role of an in-house lawyer in dispute management does not necessarily means defending the interest of your employer even if it is obvious that the steps they have taken may be totally wrong. Even if the organization is on the wrong side of the dispute, solutions must be sought and proposed for adoption by the relevant authority. It include identifying the risk factors associated with every decision or proposed action of the company, restate a plan to abate such factor and also propose a legal alternative in case the move to abate it fails. 

Business initiatives and their proper functioning is not without risks. Most often, the provisions of the law are usually clear and without ambiguity, in-house counsel have a duty to state the law as it relate to specific dispute and issue. He may be required to maintain the corporate integrity or autonomy of the company. Dispute Management may also involve the use of Alternative Dispute Resolution. Though the variant of the dispute resolution is not within this write up, it is important to state here that the ability to rationalize, analyse and unearth the proper meaning of speeches made by the opposing party will go a long way in defining the outcome of interface between the parties[8]. The need to close in on the details of the opposing party cannot be over emphasized.

An in-house lawyer must take note of the fact that underneath the statement made by the adverse party, which might look harmless and ordinary, are intricate and powerful leads which he must identify, interpret and may use for the benefit of his organization .In attending to dispute related matters, an in-house counsel must project, assess the opposing party and above all know the law.

An in-house lawyer must have the requisite capacity to respond to and tackle different disputes through sound critical appraisal and evaluation. Most companies have devised a means of gaining control of disputes between the company and adverse party by increasing the input of the in-house lawyers in the policies making and its implementation. The attendant advantages cannot be over emphasised.  

  1. Advising on Compliance with Legal Frameworks.

It is one of the several duties of an in-house lawyer to advice on compliance with various statutory, regulations and business rules[9]. It also include adherence to the code of conducts of the profession. He is to ensure that the policies of the company must be in alignment with the law. Setting up business always require that the promoter know and comply with relevant statutory provisions. An in- house lawyer have a duty to ensure that every necessary statutory provisions are complied with and those in deficit of compliance are corrected as soon as he is aware of such situation. It might be in terms of filing annual returns, quarterly or yearly compliance process or updating the company legal profile. Before a company or Government agency is established, there must be compliance with legal requirements and it is not only a duty of the in-house lawyer to do same, but also to ensure his organization is not in default or violation of compliance by interfacing with the relevant agencies. For example, the Corporate Affairs Commission expects companies to file various returns. The Federal Road Safety Commission expects fleet operators to comply with the relevant regulations and policies on the operation of commercial transport. And this include the key components of the establishment  of Safety Units for operators,  registration of commercial vehicle operators, continuous education of drivers and ensure compliance with code of conduct and ethics of transport association or unions. Commercial Banks are also expected to make statutory compliance by the Central Bank of Nigeria and the Security Exchange Commission before mergers and acquisitions. A host of other statutory requirements from various governments are also expected to be complied with, depending on the company involved and purpose. An in-house lawyer should also be able to update his employers with the relevant statutory requirements to continue to be in business.

iii. Offering Legal Advice and Opinion to his employer.

An in-house lawyer is expected to offer necessary legal opinion to his employers as issues unfold and are brought to his notice in the organisation. It is unethical to give legal opinion on gossips and free talks. Legal opinions are given to address contentious legal issues, to correct legally defective actions, restate the truth about an issue, to inform the organization about the position of the law and possibly make recommendations on necessary legal steps to be taken on a matter.

For the records and reference purposes, it is advisable that legal opinion be in written form. The in-house lawyer must be versed in the knowledge of the law relating to the line of business of his employers. Brevity, conciseness and logicality must be watch words. The issue or fact must be clearly presented and the legal advice must be easy to understand.

One of the greatest legal minds, Lord Denning MR[10] (as he then was) put it succinctly this way

         Words are the lawyers’ tool of trade, when you are called upon to address a judge,

          it is your words which count most. It is by them you will hope to persuade the judge

          of the rightness of your cause. When you have to interpret a section in a Statute or a

          Paragraph in a regulation, you have to choose your words well. You have to look into

          the future, envisage  all the contingencies that may come to pass —- and then use words

          to provide for them. On the words you use, your client future may depend— words are the

          vehicle of thought —when you are advising your client in writing  or by words of mouth—

          you must use words to do it convincingly, do it simply and clearly

 As an in-house lawyer, there might be needs to make research and make reference to legal materials, statutory provisions and decided cases to enrich the quality of the legal advice. The importance of this cannot be over emphasised because a sound legal opinion should be able to restate the law and what ought to be done legally to prevent an intending adverse legal effect on the company. A good command of English and not necessarily high sounding words is required[11].

Issues and situations which would otherwise have led to protracted litigation with its attendant unnecessary expenses would be prevented. The resultant positive effect is that there will be boom  in public private  sector participation in corporate governance,  through partnership initiative which will in turn help in not just  growing the economy , but create a progressive investment climate environment that will be conducive for foreign investment[12].

Legal advice must be compelling and convincing with the necessary facts and the statutory provisions to support it. In some cases, one may need to state the laws guiding the various situations and possibly distinguish between any that is of conflict.    

  1. Duty to ensure Compliance with Corporate Governance Codes.

As varied as the definition of Corporate Governance are, there appear to be a consensus as to what it entails. Corporate Governance is the manner in which corporations are directed, controlled and held to account with special concern for effective leadership of the corporation to ensure that they deliver on their promise as wealth creating organ of the society[13].

It involves the monitoring of the company based on its ethics, parameter of conduct and behaviour of its company and management. It involves the way the company are governed and to what purpose. It is concerned with practices and procedures for trying to ensure that a company is run in such a way that it achieve its objective.[14].It is one of the several duties of an in-house lawyer to ensure that his employers comply with the relevant Corporate Governance Codes.In some cases in might be part of the internal monitoring team of the company. Complying with the relevant corporate codes have a way of boosting the corporate rating of the organization

  1. Duty of an In-house Counsel as a Company Secretary.

The requirement that every public company must have a company secretary is statutory[15]. It is a mandatory provision for public company and the qualification are also contained therein, even though the requirement for appointment as Company Secretary for Private Company is that it must be one who have requisite knowledge and experience to discharge the functions of that office.

For a Public Company, it is a different ball game. The requirements are that a person to be so appointed must be a member of Chartered Secretaries and Administrator or a Legal Practitioner within the meaning of Legal Practitioners Act, or a member of the Institute of Chartered Accountant of Nigeria or such other bodies of accountant as are established from time to time by an Act or any person who has held the office of a Public Company for at least three years of five years immediately preceding his appointment in a public company or a body corporate or firm consisting of members, each of whom is qualified under paragraph (a) (b) (c) or (d) of this section.

Further to the above, the duties of the office is as provided in the Companies and Allied Matters Act thus[16];

  1. Attend the meeting of the Company, the Board of Directors and its Committees, rendering all necessary secretarial services in respect of the meeting with applicable rules and regulation.
  2. Maintaining the register and other records required to be maintained by the company under the Act.
  3. Render proper returns and giving notifications to the Commission as required by the Act
  4. carry out such administrative and other and other secretariat duties.

These duties are imperative[17]. The general trend is for companies to employ in-house lawyer who act as Company Secretary. One must state here that even though a company secretary is an in-house counsel, through its function, he helps to ensure the necessary statutory demands of the company are maintained.  

  1. Vetting of Legal Documents.

Without prejudice to the provisions of the rules of professional conducts, it is the responsibility of the in-house counsel to vet legal documents involving transactions between his employers and other bodies or members of the public. On a daily basis, organizations are usually involved in transactions and dealings that require drawing up of agreements that will guide the proper running of every specific transaction. While representing the organisation, it is the duty of an in-house lawyer to scrutinized and vet the agreement drawn up by parties. And in doing this, he is expected to take care of details and ensure that the interest of the corporation is protected. He should be able to advice on the proprietary of every transaction. It is important that in the course of such scrutiny, errors should be identified and noted down for corrections or in the alternative the necessary corrections should be made on the copy for a reprint of another copy. An in-house lawyer may need to do consultation with the opposing parties for clarity of the meaning or intent of words used in the legal documents. On the alternative, the management of the company may be consulted for clarifications on the provision contained in the document under scrutiny.  Through the scrutiny of the document, he should be able to anticipate the likely problems or issues that will arise in future and take the necessary steps to arrest them. After the corrections have been made, it is also the duty of in-house counsel to ensure the final copy convey the intentions of the parties involved.

vii. Represent Employer as an Officer or Agent in Court.

The Rules of Professional Conduct in Nigeria exempts lawyers in Salaried Employment from appearing in Court or tribunals. The exceptions to the rule is as provided thereunder to include the receipt of a fees as a director of a limited liability company, provided that the recipient of such fees shall not appear as advocate, employment as a Legal Officer in any Government department or a statutory Corporation or a University, employment as a pupil in the Chambers of another member of the bar within five years, employment as a lecturer in law, a legal Practitioner holding whole time employment with local Government Authority, nationalized industry or statutory corporation may appear in court as a counsel on behalf of their employers.

The provisions as contained in the rules permit none practising Barristers in full time salaried employment to only represent the employers in court as officer or agent and this should be done without being robed. He is also not permitted to argue his employers case. While in court, he is only permitted to stand up as a representative of the company when the case against his company is called. The court may ask him to state his position in the company which may be documented by the court. 

viii. Explaining the contents of Legal Documents.

In-house lawyers are most often in the midst of laymen as co employees and or employers. It is the duty of an in-house lawyer to explain the contents of legal documents that are referred to him. The legal training that have been acquired over the years come to play here. Ordinarily, one may be tempted to say that an in-house counsel interprets legal documents. But the fact is that it is the court that has the sole responsibility to do so. However, in a way their functions in this regard is akin to the interpretative role of the courts. At times Legal drafting involves the use of unfamiliar words, following the rules of legal constructions and a whole lots of other factors which a lay man may not understand. The role played by an in-house lawyer in explaining statutory constructions and documents for his employers may be a factor in saving the company from taking steps which may jeopardize her business success or interest.  

Viiii. Maintaining Records of External Solicitors, Interfacing with them and monitoring their appearances in Court.

An in-house lawyer play a vital role in maintaining records of external solicitors under his organizations retainer ship and also monitor their appearances and conduct of cases in court for the interest of the organization. The in-house Counsel is usually saddled with the responsibility of receiving applications for retainer ship from external lawyers for consideration. He may also need to visit and assess the law firm of prospecting applicants to know their suitability and how they are equipped to tackle likely legal issues referred to them.  External Solicitors are usually retained by a company for a specified fees, period of time and stated purposes. Often, a retainer ship agreement is usually entered between the external solicitor stating the amount payable as a retainer ship fees, the role the external solicitor is to play in the agreement and how debts incurred in the course of the discharge of their duties are to be paid. It may also be necessary for the in-house lawyer to go to court and watch proceedings so as to acquaint himself on how cases being conducted by the external solicitors are faring. Payment to the external solicitor could be annually biannual, monthly or quarterly depending on the agreement between parties.  

  1. CONCLUSION.

The discussion centred on the role of an in-house lawyer, with specific mention of the duties in respect to dispute management, advising on compliance to legal frame work, offering of legal advice and legal opinion, vetting of legal documents, duty to comply with Corporate Governance codes, the role of an in-house lawyer as a Company Secretary, representing his employer as an officer or agent in court, explaining the contents of legal documents and maintaining records of the external solicitors , interfacing with them and monitoring their appearances in court. The duties are not are not limited to the ones discussed in this paper. The most important thing is the exercise of discretion on a whole lots of the duties. There are still issues associated with lack of a code of conducts with respect to the duties of in-house counsels. One may argue that there are already in existence a general rule to regulate members of the profession, but there is need to have a specific code of conducts or policy document to guide in-house counsels in the performance of their duties. There is need to continuously strengthen the competences of in-house counsels in order to enhance the quality of their input not just to their employers but to the legal profession in general.

                                                         REFERENCES         

  1. 1. Drafting, Conveyancing and Wills (1995) by C O Adubi, published by Light house

          Publishing Company Ltd. Lagos Nigeria 1995.

  1. Companies and Allied Matters Act Cap C20 Law of the Federation of Nigeria 2004.
  2. Constitution of the Federal Republic of Nigeria 1999 (as amended).
  3.  Discipline of Law, Published by Butterworth’s 1979, 332
  4. 5. Legal Practitioners Act Cap L11 Laws of the Federation of Nigeria 2004.
  5. Company Law and Practise in Nigeria, Orojo J O 5th Edition, South Africa, Lexis ,Nexis.
  6. Makers of Modern Africa, Profiles of History, Published by African Books Ltd, 2nd

           Edition 1991.

⃰  LLB (BL) LLM (Ibadan) Email;estineokolo@yahoo.com 08032892218

[1] Robert Bonner (1927)Lawyers and Litigants in Ancient Athens;- The Genesis of the Legal Profession(New York) Benjamin Plum ,202

[2] Karibi Whyte,(1993) History and Sources of  Nigerian Criminal Law,Spetrum Publishers Limited

[3] Geoffrey Oputa, Nigerian Legal Profession and Lawyers Directory.

[4] Noel Out. (1999). Colonialism and Criminal Justice System in Nigeria, International Journal of Comparative and Applied Criminal Justice, Vol. 23, Issue 2.

[5] DO Thomas, The Legal Profession in Nigeria at a Glance-History, Nature and Regulation ,Alex Odunami’s  Blog and retrieved on12th February 2019

[6] https//www.nigerianlawschool.edu.ng retrieved on 23rd February 2019

[7] Raph Uwechue, Maker of Modern Africa, Profile in History, published by African Books Ltd, 2nd Edition.

[8] Atah Simeon;Hidden Meaning in Conversation , a paper presented at Effective Negotiating Skills and anchored by Schechina Resources Ltd in Ogun State 2008

[9] Konke, Joshua L.(2008) Legal Risk Management requires a Corporate Strategy, Mind set and Commitment, DCIG

[10] Discipline of Law (1979) Published by Butterworth’s , 332.

[11] CO Adubi (1995) .Drafting , Conveyancing and Wills .Light house  Publishing Company Ltd.Lagos Nigeria .

[12] Michael Bamidele (2015), Lawyers & National Development, published in the Guardian Newspapers on 20th August.

[13] Wilson I (2006) Regulatory and International Challenge  of Corporate Governance in Nigeria, Post Banking Consolidation –Nigerian Economic Summit Group, Economic Indicator

[14] Ayokule Adetiba; The Bar Code, A Review of Corporate Governance Codes

[15]Section 293 of Companies and Allied Matters Act 2004

[16] Section 298 of Companies and Allied Matters Act 2004

[17] Orojo JO Company Law and Practise in Nigeria, 5th Edition, South Africa ,Lexis ,Nexis

 

Estine Okolo Esq is an Attorney at Law based in Osogbo, Osun State., Western Nigeria

 

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