Following the trend in developed legal markets around the world, Asia's in-house profession is growing in number, stature and influence, as companies recognise the value of integrating strategic legal advice as part of the day-to-day running of their businesses - with the added advantage of cutting back on external legal costs.
However, this is not coming without a fight. In-house lawyers are being forced to justify the value they can provide, and bring about large changes in organisational culture to bring them closer to the role of forward-looking, strategic legal risk managers, rather than just advisors or dealing with company decisions after the fact.
These in-house trail-blazers are also faced with the difficulties of operating in a fast-developing, emerging legal market, marked by constantly evolving regulation and legislation, coupled with the associated legal grey areas - and even black holes.
However, as ALB discovered in its survey, Asian in-house lawyers are measuring up with their global counterparts, becoming heavily involved with senior management decisions and even going so far as to influence government policy.
In-house practitioners - in a blow for private practice lawyers - also claim to be gaining more job satisfaction from being more closely involved with their business objectives than during past private roles when they were kept at arm's length.
At the coal face
Taiwan Cement group legal counsel Catherine Chang is the sole in-house lawyer with the manufacturing group - a position she has occupied for the past 15 years.
In an extremely busy and demanding role, she provides legal advice for the group as well as 13 affiliate companies, in varied areas including power and transportation.
Though looking for another person to join her now, over her 15 years Chang has had to fight hard alone to prove the value of her advice to the company.
"At first my colleagues were not familiar with the legal role and were a hassle to me - it was hard to tell them they could not do whatever they wanted," Chang said.
"But they have become familiar with my role in the company - not telling them what to do but advising on the legal risks they might face in their decisions," she said.
Chang's struggle to develop and prove her role within the company is indicative of a broader struggle by in-house lawyers across Asia over the past decade or more.
Siendy Wisandana is another in-house that has faced this battle - with success. In her three plus years as legal vice president and general counsel of oil company PT Medco Energi International Terbuka, she has managed to prove her value enough to grow her team from being a sole legal advisor to having a four-strong legal department.
Part of this growing acceptance is due to the cost-effectiveness of in-house advice.
"I believe cost is the main concern, as in Taiwan, if a company wants to get a good legal service from good, big law firms, they will pay a lot in expenses," Chang says.
In-house lawyers are also perceived as more value for money due to their knowledge of the individual business and their proximity to it.
"In-house lawyers are more familiar with the culture and internal business concerns - when my boss makes a final decision, he doesn't want to just listen to an outside legal opinion, he wants to modify it based on the company's actual needs," she says.
On the up and up
The cost-effectiveness and value of legal teams is causing a growth in numbers across the region. From the list of top in-house counsel put together by ALB, the vast majority indicated their in-house teams were on the increase in the next year.
Eunice Kim, chief legal officer for Citibank in Korea, says 10 years ago in-house counsel were an anomaly, were not utilised effectively and were not understood. She says foreign firms changed this as in-house were more normal in developed markets.
"Now I see many Korean companies, big or small, have in-house counsel," Kim says.
Outside of her Citibank duties, Kim chairs an in-house counsel forum in Korea.
"When we started eight years ago, we were half a dozen people that got together to share experiences, more of a support network group, but now we have 120 on our roster, meet regularly and run seminars on key issues," she says.
"While we are in the incipient stages of the in-house profession, it is growing and that growth is not going to stop, not only the number of companies having in-house counsel but the ones that have will add more people to the team," Kim says.
This sentiment seems to be echoed right across the region, especially in China on the back of its marked economic growth and increased business activity.
Hong Wang from Shanghai GM says he has seen the car company's legal team grow in size but that this is not surprising as the business itself had grown rapidly.
"China is an exception really in terms of the growth and development of industries, so our business has grown very fast. We have grown in the number of lawyers, and also the level of skills required as issues for the company have grown more complex."
Stella Guo, regional legal advisor for BP China in Guangzhou, agrees.
"Based on the number of head-hunter calls I get every day, I can see more and more companies in China trying to build an in-house team," Guo says.
Balancing act
Though boasting new-found status and numbers on the rise, in-house lawyers are also finding they have plenty of responsible work to occupy their time.
In China, navigating the minefield of rapidly emerging, untested law and regulations is proving a huge challenge for in-house lawyers.
"The legal system is immature and has many grey areas, as it has been developing very quickly with new regulations coming out every day," Guo says.
She says lawyers are getting "confused in an ocean of regulation", and that a good in-house in China has to assess situations for a variety of risks and different scenarios, consult government and external council for their opinions and interpretations, and then try to come back to the basic principles of the rules in making a decision.
However, the majority of challenges being faced by lawyers across Asia stem from the walking the line between objective legal opinions and commercial objectives.
Vice president legal at India's Hindustan Lever Limited, MS Gupta, says in-house lawyers need to read the grey area between the black and white letter of the law to achieve business objectives without crossing the boundaries.
He says this comes back to a basic traffic light system.
"If it is a red light, it is a complete no-no. If it is a yellow traffic light, then the apparent risk can be managed and mitigated - it is doable," he says.
"Your job is not to totally eliminate risk," Citibank's Kim says. "You have to understand the likelihood of risk and its consequences and have frank discussions within the business to get a sense of risk tolerance. It is consensus building and business facilitation - not just saying don't do this."
In-house lawyers in Asia are also increasingly expected to be pro-active in this risk management role by getting involved in deals from their inception to strategically look at legal risks to the business and any possible social impact or concerns.
Raising the bar
As in-house lawyers gain more control and responsibility within businesses they are also demanding higher standards from their external legal counsel.
In Indonesia, PT Medco Energi's Wisandana says bribery of in-house legal counsel by law firms is common, and that this is avoided by her and her group.
"It's very competitive, and some firms would do anything for some fees, but if I do something funny or strange it will be me to blame," Wisandana says.
Guo from BP says in China the advice given by local private firms is lacking.
"In the market the quality of the service is not as good as in-house. Local firms are improving, but sometimes their advice is not satisfactory," Guo says.
MS Gupta says company's are favouring in-house counsel largely because of the speed at which they are accessible and can provide decisions.
"If the managing director needs advice before the end of the day, its not easy to access information from a private law firm," Gupta says.
Company's are also seeing advantages in terms of accountability, with in-house lawyers more answerable for their advice, and confidentiality, with no need to provide any sensitive information in a brief to outside counsel.
Firms in Asia are also being expected to provide commercially sensible advice rather than a black and white or "bookish" interpretation of the law.
Most lawyers claim private firms provide them with conservative positions on legal issues that have to be adapted to fit the company's risk tolerance.
The way forward
Though most in-house lawyers surveyed come from a background in private practice, it appears their proximity to an individual client is giving them more job satisfaction.
Taiwan Cement's Catherine Chang worked at three law firms of different sizes over 14 years before moving in-house, which she said was a tough decision.
"But I don't think any one of them could satisfy me because of the gap between the lawyer and the client," she says.
"The first thing a lawyer will do when providing legal advice is to protect themselves first or risk being sued by the client, and that is not the life I like," she says.
China Resources senior legal advisor Albert Chak says he is also enjoying the in-house role much more than private law.
"I'm much closer to the people and not just sitting in the office doing things like drafting advice. I can't see myself going back to private practice," Chak says.
But GM's Hong Wang says the move in-house requires lawyers to learn a whole new set of skills - and this is only likely to increase as their importance increases.
"What is required is a much more sophisticated understanding of the business. You need to become more involved early on and consider not just the legal side but the business impact, providing a broader scope of perspectives and solutions," he says.
So what do the top-guns of the Asian in-house profession think will be required for best in-house practice in the future?
Lawyers say they will need to have an in depth knowledge of all of the company's products, people and processes, and be able to keep constantly abreast of the legal issues facing the sector the company is in.
"You also can't be an armchair executive - you have to manage the issues of the company as part of a cross-functional team. It is a role totally integrated with business and an action-oriented role," Gupta says.
The in-house role can even go further than this, according to some, to the point of constructively influencing government policy over the long-term.
Gupta says he has personally been involved in a change of outdated food laws in India, after the government took note of a comparative study he conducted of food laws across Asia to implement new legislation dealing with the issue.
"By the time the bill got drafted, it was after seven years of constantly engaging and meeting with government - but even if it takes 10 years its better than sitting idle," Gupta said.
Kim also thinks in-house lawyers can have an influence on policy in Korea.
"I sit on some government policy review committees, and there are many channels for this industry feedback to happen," Kim says.
The combination of this increased responsibility and growing market adds up to a bright future for budding in-house lawyers.
"Having a growing number of in-house counsel does diversify the market and the career tracks of professionals," Kim says.
The best of Asia
Catharine Chang: Group legal counsel, Taiwan Cement
Number in team: 1
Team increasing or decreasing? Possibly to increase by one
Best achievement in role: "Encouraging change so that my colleagues now consult me as part of doing their everyday business."
Top tip for being a good in-house: "I think you should accumulate experience in a law firm before becoming an in-house council, so you can know the line between how outside counsel might see the matter and how they can adjust that line based on the company's needs."
Siendy Wisandana: VP Legal and general counsel, PT Medco Energi International Terbuka, Indonedia
Previous employment: Hadiputranto Hadinoto & Partners, Jakarta
Number in team: 4
Is team is increasing or decreasing? Stable
Firms used: Skadden Arps - Hong Kong; Baker & McKenzie - Singapore; Macleod Dixon - Calgary, Alberta, Canada; Allens Arthur Robinson - Melbourne; Trowers & Hamlins - Muscat, Oman; Hugh Fraser - Dubai; King & Spalding LLP - Houston; Hadiputranto Hadinoto & Partners - Jakarta; Mochtar Karuwin Komar - Jakarta; Ali Budiarjo Nugroho Reksodiputro - Jakarta; Thamrin & Rachman - Jakarta.
Best achievement in role: "Best Corporate Lawyer" - awarded by Merrill Lynch and Credit Suisse last year (2005) during the company's GDR Luxembourg Listing.
Hong Wang: General counsel, Shanghai General Motors Company
Number in the team: 10
Is team increasing or decreasing? Increasing
Firms used: Selected on case-by-case basis, depending on the underlying subject matter and expertise and quality of service of the firm
Best achievement in role: Structuring solutions which help achieve the
business objectives and being part of a fast growing business
Top tip for being a good in-house lawyer: "You have to be a good lawyer
first and foremost. In addition, you need to have a good grasp of the
business and know your clients well."
Madhu Sudan Gupta: Vice President Legal, Hindustan Lever Limited, India.
Number in team: 12 Legal Managers / 20 Para-legals
Is team increasing or decreasing? Gradually increasing
Firms used: Global Legal Associates, New Delhi; Udwadia, Udeshi & Berjis in Mumbai, Delhi and Bangalore; Dua Associates in Delhi and Bangalore; Crawford Bayley, Mumbai; Trilegal, Mumbai; Vaish Associates, Mumbai; Supreme Court Advocate CS Lodha, indirect tax law specialist, Mumbai.
Best achievement in role: Corporate restructuring of Unilever Group businesses through mergers, acquisitions and disposals, including several cross-border transactions, as well as succeeding in complex indirect tax litigations against central and state governments and defending substantial tax holiday benefits for green field projects.
Eunice Kim: Chief legal officer for Citibank, Korea.
Number in team: 11
Is team increasing or decreasing? Increasing
Best achievement in role: Building the legal team so that it is not just a place to go when there is a problem, but is an integral part of company management.
Albert Chak: Senior Legal Advisor, China Resources.
Number in team: 12
Is team increasing or decreasing? Increasing
Firms used: No definite panel, but preferred lawyers include Herbert Smith, Slaughter and May, Richards Butler, DLA Piper and Johnson Stokes & Master.
Top tip for being a good in-house: "Be practical and have strong inter-personal skills."
Stella Guo: Regional Legal Advisor (Guangzhou), BP China
Number in team: 3
Is team increasing or decreasing? Increasing
Firms used: Frequently use King & Wood
Best achievement in role: Advised on a number of M&A projects in China, for investment in business sectors such as Liquefied Petroleum Gas, chemicals and solar energy. The most significant was the establishment of the first solar JV in China.
Fumikata Eshima: Managing director and the head of legal, UBS Investment Bank, Japan
Number in team: Nine
Is team increasing or decreasing? Expected to increase in the next 12-18 months
Firms used: Anderson Mori & Tomotsune; Nagashima Ohno & Tsunematsu; and Mori, Hamada & Matsumoto together with major international firms in Tokyo.
Best achievement in role: "Having managed challenging projects and built partnerships with the businesses."
Mario Valdes-Lora: Vice president, deputy general counsel, AIG
Number in team: 15, including attorneys and support staff
Is team increasing or decreasing? Looking to add one more full time attorney this year.
Firms used: Allen & Overy, Fairbarn Catley Low & Kong, Johnson Stokes & Master, Simmons & Simmons and T.S Tong.
Best achievement in role: "After only one year in Hong Kong I have made a good transition and have developed a good understanding of the life insurance market and the legal and regulatory environment existing and being developed throughout Southeast Asia."
Bharat Vasani: Group General Counsel, TATA Group, India.
Number in team: 5
Is team increasing or decreasing? Increasing
Firms used: Domestic - AZB & Partners, Amarchand Mangaldas, Mulla & Mulla, Udwadia & Udeshi, J. Sagar Associates, Crawford Bayley & Co. International - Herbert Smith, Arnold & Porter, Linklaters, Kelley Drye & Warren
Best achievement in role: "Successful completion of the highly complex de-merger of TCS Division from TATA Sons Ltd, which had global ramifications in 57 different countries, together with being one of the most successful IPO's of the decade."
Philana Poon: General counsel, PCCW Group
Number in team: Currently 20 lawyers (based in HK, PRC, Singapore, and the UK) three paralegals and seven support staff.
Is team increasing or decreasing? Increased headcount this year and are currently trying to recruit another two lawyers to support increasing business requirements.
Best achievement in role: I am very lucky to have a very enthusiastic internal legal team who provide legal support to all businesses within the PCCW Group.
Top tip for being a good in-house: "A good in-house must have a commercial approach, be solutions-oriented, and be interested in and feel a part of the business, while protecting the interests of the business from unnecessary risks.
MR Prasanna: Group executive president of the legal function, Aditya Birla Group
Number in team: 8
Is team increasing or decreasing? Now increasing to 12
Firms used: In India, we use Amarchand Mangaldas, Mulla & Mulla, AZB Partners, and Economic Law Practices. Foreign law firms are again chosen keeping in view the jurisdiction and the area of practice.
Best acheivement in role: "The de-merger of the cement business of Larsen & Toubro Limited into a subsidiary of Grasim Industries, a Aditya Birla Group entity, and taking Aditya Birla Minerals public on the Australian Stock Exchange."
Michelle Hung: Group General Counsel, COSCO Pacific Limited
Number in team: Six, as well as three chartered secretaries and two clerical staff
Is team increasing or decreasing? It is expected there will be further recruitment to cope with the increasing workload of the legal department.
Firms used: Orrick, Herrington & Sutcliffe (in association with Coudert Brothers), Holman, Fenwick & Willan, Linklaters, Woo, Kwan, Lee & Lo
Best achievement in role: The legal department aims to ensure compliance with all regulatory and corporate governance requirements and to act as a conduit between senior management and regulatory bodies. COSCO Pacific has received various awards which represent market recognition of our dedication toward corporate governance, excellence and professionalism.
DJ Goh: General counsel, IMC Group
Number in team: 8
Is team increasing or decreasing? Increasing
Firms used: Stephenson Harwood, Norton Rose, Watson Farley & Williams, Ince & Co, Allen & Gledhill.
Best achievement in role: (1) Nomination of team as an ALB finalist for the Shipping In-House Team of the Year 2006. (2) Managing the growth of in-house team in conjunction with the expansion of group's business activities.
Ojoon Kwon: Vice president and general counsel, LG Electronics, Korea
Number in team: 120 (Globally)
Is team increasing or decreasing? Increasing
Firms used: Korean firms - Lee & Ko, Kim & Chang, Woo Yun Kang Jeong & Han. International firms - Sidley & Austin, Winston & Strawn
Best achievement in role: Enacting internal legal policies and systems for global legal risk prevention and developing contract review guidelines.
Anil Fernandes: Senior vice president - legal and company secretary, Entertainment Network (India).
Anil Fernandes - Entertainment Network India
Number in team: 4
Is team increasing or decreasing? Increasing by 2
Firms used: Mulla & Mulla and Craigie Blunt & Caroe. Crawford Bayley & Co (For the IPO).
Best achievement in role: The successful IPO of the company in a span of about 5 months from decision making to listing, which inter alia included a reduction of capital.
Lena Chia: Managing director of legal and regulations department, Temasek
Number in team: 10
Is team increasing or decreasing? With a strong focus on human capital, we always look towards strengthening the depth and breadth of the team.
Best achievement in role: "Strengthening of the legal and regulations team and the stepping up of efforts to build more robust systems and processes to meet the requirements of our regional and global investments. Ensuring that all strict legal and regulatory compliance of all the jurisdictions in which we invest in are met.
Catherine Yeung: Legal Manager, China Light & Power
Number in team: 6 lawyers, 3 paralegals and a part-time librarian
Is team increasing or decreasing? Increasing
Best achievement in role: "My role - to inspire and lead a dynamic team to deliver total solutions to our internal clients."
Top tip for being a good in-house: Provide solutions. Excel in what you do..... "We are what we repeatedly do, Excellence is therefore not an act but a habit."
Sang Hun Kim: General counsel and executive vice president, LG Holdings Korea
Number in team: 9
Is team increasing or decreasing? Increasing
Firms used: Kim & Chan, Lee & Ko
Best achievement in role: Establishment of holding company, LG Corp
Top tip for being a good in-house: Being continuously motivated by intellectual curiosity and desire for challenges
Sean Hogle: Vice president and general counsel, Aplix Corporation
Number in team: 5
Is team increasing or decreasing? Stable
Firms used: Lee & Li, Morrison & Foerster
Best achievement in role: As the company's first chief legal officer,
established all of the company's formal legal policies, procedures, template
agreements and written legal negotiation strategies; advised the company
through its significant international growth and transition from private to
publicly listed company; negotiated cross-border mergers and investments
(including Aplix's merger with iaSolution, a Taiwanese company) and
established overseas subsidiary operations in the US, France and Germany.
Nurman Djumiril: Chief counsel, LNG Gas & Power, Chevron Indonesia
Number in team: 8
Is team increasing or decreasing? Increasing
Firms used: Project specific, depending on nature of need
Best achievement in role: Resolution with an off-taker of its delinquent payment and advocacy role as chair of Indonesia Petroleum Association in structuring regulatory framework for the oil and gas industry.
Top tip for being a good in-house lawyer: Do not compromise integrity and ethics.
Josephine Ong: Group general counsel, Hutchison Whampoa Properties Limited.
Number in team: 21 members of staff including five lawyers, three chartered secretaries and one insurance manager in Hong Kong. 32 members including 18 lawyers in the PRC; 1 lawyer in the UK.
Is team increasing or decreasing? Increasing
Firms used: Simmons & Simmons, Baker& McKenzie, Woo Kwan Lee & Lo.
Best achievement in role: establishing and running an extensive net-work of PRC in-house lawyers in the PRC
Samson Ng: Senior vice president - corporate development - Meiya Power Company
Length of service: 7 years
Number in team: 6 (legal and company secretarial team)
Is team increasing or decreasing? Increasing
Firms used: Hong Kong - Baker & McKenzie, Latham & Watkins, Allen & Overy, O'Melveny & Myers, Simmons & Simmons; Taiwan - Baker & McKenzie, Lee & Li (Taiwan); Korea - Kim & Chang, Hwang Mok Park; China - King & Wood, Global Law Office
Top tip for being a good in-house lawyer: Have a good commercial sense.
David Graham: Managing Director and General Counsel, UBS Investment Bank, Asia Pacific
Number in team: 165 legal and compliance professionals
Is team increasing or decreasing? Has increased by 70% over various jurisdictions
Firms used: Linklaters, Clifford Chance, Freshfields Bruckhaus Deringer, Allen & Overy, Sullivan & Cromwell, Sherman & Sterling, Mallesons Stephen Jaques
Best achievement in role: "Attracting and retaining first class talent to the department - and providing clear 'value add' to the UBS businesses in Asia Pacific.
Top tip for being a good in-house: Be fair in your dealings will colleagues and constructive in your dealings with clients.
Greg Terry: Managing Director and General Counsel, Asia Pacific, Morgan Stanley
Number in team: 22 lawyers
Is team increasing or decreasing? the number is growing steadily as our overall Asian business grows. We have probably doubled in size over the last 3/4 years
Firms used: Morgan Stanley has a global panel of 12 preferred firms (mainly the magic circle UK firms and the leading Wall St firms) and a wider but still defined list of approved firms for certain geographies or products. Our principal relationship firms in Hong Kong are Davis Polk on the US side and Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters. In Australia we use Mallesons Stephen Jaques, in Singapore Allen & Gledhill, in Taiwan Russin & Vechi and in India Juris Corp primarily but a limited number of other firms in each jurisdiction as well.
Top tip for being a good in-house: You must always remember that you primary role is not to provide legal advice, it is to be the "consigliore" to management - the trusted advisor who uses his/her legal skills as the basis from which to guide the managers of the business in their business decisions - think the Tom Hayden character in the Godfather.