Dueling “best practices” – embed lawyers with clients; require legal approval of contracts (BHP Billiton)

Small wonder that I doubt the miracle drug of “best practices” (See my post of June 6, 2006 regarding an article I wrote and my post of June 6, 2006.). How can one reconcile the two initiatives John Fast, general counsel of BHP Billiton, decreed against the exactly opposite practices that others extol?

BHP’s legal function “took the lawyers out of the business units in which they were embedded and placed them together in one department,” according to Legalweek.com, May 25, 2006 (Ed Thornton). It appears from the article that some of those business unit lawyers reported to a business unit head and that the change relocated many of them to a centralized office location. The exact opposite of this practice – such as at GE where business unit lawyers report to that unit and have offices near those unit’s executives – has been touted as a best practice. For example, Honeywell scatters its approximately 100 lawyers at 23 different sites – and each lawyer reports to both their law department superior and the head of the business unit they serve, according to GC Mid-Atlantic, May 2006 at 28.

The second BHP practice “introduced a policy whereby business units had to seek endorsement from the legal department before submitting a contract.” Opposing this practice are those law departments, such as Cisco, who only want to review important contracts and therefore train clients to handle less significant contracts (See my post of Jan. 3, 2006 on ways to expedite contracts.).

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