Canadian Lawyer

26 M a r c h 2 0 1 4 w w w . C A N A D I A N L a w y e r m a g . c o m Kellogg distributes and sells products in 180 countries and Maharaj is responsible for overseeing the majority of the legal staff in those countries. He reports in to the company's gen- eral counsel in the U.S. "There are a few places where legal is not considered part of the support functions or overhead and people are trying to squeeze every dollar out of that P&L line. So once people start looking hard at the P&L lines and over- head that's when you have to be concerned," he says. Companies questioning the need for local in-house law- yers is a process Barry Fisher has observed over the years although as vice president, general counsel, and corporate secretary at SAP Canada Inc. he has never felt his own posi- tion was threatened at the German-based software company. Fisher oversees 11 people, including four lawyers, in the legal function across Canada. He reports to the global general counsel of SAP. "I work closely with American colleagues and I've seen this sort of thing go on. At one level you figure you're safe because the law of the jurisdiction by definition isn't something that is done in New York. But many of the matters that in-house counsel face are not necessarily so jurisdiction specific," he says. "You're providing broad advice about mat- ters and if organizations think it is costing them more to sus- tain a legal department in Canada, or any other jurisdiction, as opposed to having that pure legal work sourced to outside counsel as required, and take the overall function inside." Adjustments to internal staffing levels have occurred in the Canadian office of DuPont. "Anytime you have a departure of any type the global organization is going to tend to take advantage of that as a potential opportunity for moving head count around," says Ernest Tuckett, general counsel for EI DuPont Canada Co. When the legal team at DuPont Canada lost legal counsel Clarissa Da Costa to John Deere Canada last fall, they were able to replace her, but Tuckett was not able to replace a prior departure, leaving the department at three lawyers versus four. "This is the climate in which you really have to make the case for not only increasing your head count but keep- ing it steady whenever you lose someone," says Tuckett. "I would have loved to replace the first one that left but they just decided to see if we could do with three lawyers instead of four. That's not as draconian as folding up the whole depart- ment, but others are also deciding they can do without those two or four people in Canada and they figure out a way to get it done from the U.S." consolidAtion/outsourcing R ecently, SAP Canada's legal department lost one of its paralegals because the company has estab- lished a shared services centre for North America to book contracts. That meant a component of what "a whole lot of people" were doing went to Brazil. "So they said we had to take the head count for doing that," says Fisher. "That was fine because it was relieving people of the responsibilities for something they didn't really like doing." He doesn't think that kind of approach to handling certain kinds of legal services will affect in-house lawyers. "I would think it's less a factor among lawyers. What is being outsourced are commoditized kinds of services not performed by lawyers and therefore not jurisdiction specific. I can see where a contracts administration group could well face at some point a centralized administrative function outside of Canada." Fisher says he doesn't feel his own department or generally in-house teams in Canada are threatened by outsourcing to jurisdictions staffed by people who don't have the knowledge of that particular legal system. That said, he admits there are organizations that may see "some items of a relatively routine legal nature" farmed out. "I can see where organizations that may not be on ascen- dancy and therefore in cost-control mode may say, 'We're not doing that much business in Canada, why do we have a lawyer or so many lawyers — there are other ways we can deal with these issues,'" says Fisher. Like any other business consideration, he notes, it could happen purely on a domestic basis — every year a company looks at the value legal is adding to the organization and what it's costing the company to have an in-house legal department. "Some may determine the cost outweighs the value and so even if they weren't American controlled they could still say, 'Hey, we're not doing that much legal work there, we can get it done with my favourite law firm on an as-needed basis. I don't need to have you on the health care benefits, pension plan, bonuses, and all the rest of it.'" Within the technology industry Fisher operates in he says established companies are generally growing in-house depart- ments as the level of work becomes more sophisticated and requirements more stringent. The longer and better-educated in-house lawyers become in their sectors, the better they can there are a few places where legal is not considered part of the support functions or overhead and people are trying to squeeze every dollar out of that pnl line. so once people start looking hard at the pnl lines and overhead that's when you have to be concerned." AV mAHArAJ, Kellogg co. where legal is not considered

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