Three ways to encourage clients, charged for internal time, not to avoid lawyers

In the early 1990s Aviva, a UK-based insurance company, started having its in-house team of lawyers track their time. According to an article in Law Dept. Quarterly, Vol. 2, Sept./Nov. 2006 at 44, they currently use an in-house system to track lawyer time.

The article points out three ways Aviva has dealt with the fear that if the in-house team tracks and charges back time, it will deter some impecunious business managers from incurring costs and they will avoid approaching the legal team with everyday issues.

The law department recharges its costs to each business unit as a whole, “with only exceptional non-business-as-usual activity being charged direct to specific business projects.” When legal expenses roll up that high, managers will be less inhibited about turning to lawyers. The second protection is that there are policies that mandate the use of in-house counsel. For example “contracts have to be passed on to the legal team whenever they are signed, and the legal team must also be consulted whenever an extra law firm is approached.” Third, the company encourages a culture which encourages the use of the legal function. Good antidotes, all, for an otherwise poisonous situation.