Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50886
Some companies prefer not to pick one strategy over another. Manitoba Hydro, for example, uses a hybrid approach. Ken Tennenhouse, general counsel and cor- porate secretary, says his team of a dozen lawyers records where they spend their time, the majority of which is passed through to the electrical or natural gas sides of the business. When they perform significant tasks for particular projects, such as negoti- ating a construction contract to build a new plant or handling a regulatory hear- ing, those costs are charged to the spe- cific projects. "It makes sense to me that we would charge the big projects, that's part of the cost of the project. The rest of it is just the amount of effort you want to spend recording your time and billing your time," he says. Gary Hannaford, CEO of the Institute of Chartered Accountants of Manitoba, says billing individual departments for legal services used is the most accurate way a company can determine the profit- ability of its separate parts. "What it really does is try to get as many of the specific costs that pertain to a division allocated and properly ab- sorbed [by the division]. It becomes a user pay system. The user of the legal ser- vices is paying for the services as opposed to the [legal department] being one giant cost for the corporation." Hannaford likened the situation to a company giving employees their own code for the photocopier. "As differ- ent departments use the same copier, the cost of the copies is allocated to the division [making them] as opposed to being picked up by the whole organiza- tion." He says the larger the company, the more likely it will want to allocate por- tions of all costs, including heat, light, and power, to the specific divisions using them. Finding out the true profit or loss of a department can help upper manage- ment decide whether changes are needed, such as reducing expenses to help an un- profitable division get into the black or cutting out a department altogether. MacDonald says departmental billing has been on the rise in corporate Canada so individual divisions will recognize they are the recipients of scarce and ex- pensive resources. "We prefer education, so we promote that departments contact the legal de- partment on any matter they need. We also do training on other things to [help them] recognize that we are a scarce re- source, but departments need guidance on legal matters." He says the Investors Group legal de- partment has considered billing separate divisions but it's never gone beyond that stage. "Every year we put together a busi- ness plan that we review with the finance department and at no point have they said, 'you should be billing other de- partments.' We would prefer our lawyers spend time solving problems rather than billing departments we work with on a daily basis." IH Editor-in-Chief: Harvey M. Haber, Q.C., LSM with numerous leading experts as contributors The long awaited new edition of a classic text Take advantage of the reliable and up-to-date guidance of 51of Canada's top commercial leasing practitioners of the day with Shopping Centre Leases, Second Edition! This collection of updated as well as new articles and precedents covers all aspect of commercial leasing: • Technology and Telecommunications Concerns • Pandemic Preparedness for Building Owners and Managers • Insurance for Shopping Centres • Leasing Aspects of the Franchise Relationship • Transfers of Lease, Assigning, Subletting and Change of Control • Operating Costs and other Additional Rents in a Commercial Lease from a Landlord's and Tenant's Perspective • Agreements to Lease, Letters of Intent and Term Sheets This resource includes numerous precedents to help you draft your own agreements and a table of cases to help you locate the decisions you need. Shopping Centre Leases - considered the definitive resource on the subject since its inception in 1976 Now updated, revised and renewed to bring you the same powerful guidance today. Order your copy today! Hardbound • 1,108 pp. • December 2008 • $185 • P/C 0279010002 • ISBN 978-0-88804-477-8 For a 30-day, no-risk evaluation call: 1 800 263 2037 or 1 800 263 3269 www.canadalawbook.ca Canada Law Book is A Division of The Cartwright Group Ltd. • Prices subject to change without notice, and to applicable taxes. Haber_shopping centre(CL 1-2h).indd 1 INHOUSE FEBRUARY 2009 • CL1008 1/6/09 11:28:18 AM 29