While selecting outside counsel has not changed in principle, what Canadian general counsel (GC) expect once a firm is selected has shifted considerably in recent years. Here, Canada’s senior lawyers explain where the bar now sits.
How general counsel select and manage external counsel
The starting point for most Canadian GCs on selecting an outside counsel is simple:
- keep as much work in-house as possible, and
- go external only when there is a clear reason to
Dorothy Wong, the Vice President for Legal and Corporate Services at Insurance Corporation of British Columbia (ICBC), says the default position at her organization is to handle work internally. “We try to keep as much as we can internally because we have a really strong internal team with great experience,” she says.
As such, external counsel enters the picture mostly in two situations:
- when the work falls into a niche area the internal team does not cover, and
- when capacity is the constraint for the internal team
“We send work out if it’s a very niche area of law we don’t cover internally, like environmental law, or when it’s just a question of capacity,” Wong says. “For complex litigation, we go external. So, it’s a hybrid model.”
The model in selecting outside counsel
This model is not unique to ICBC. Melissa Reiter, General Counsel at Jobber, is clear about where her internal team’s limits are and where external counsel earns its place. “We really value external counsel for their deep knowledge in specialized areas,” she says, adding that her internal team has built up its own expertise in those areas partly through long-standing relationships with external advisors.
For a more structured approach, Félix Turgeon, Chief Legal and Real Property Assets Officer at Aalto, assigns each external firm a clearly defined mandate tied to its specific area of expertise. “It’s very complex and multidisciplinary,” he says.
As for Allen Garson, General Counsel at Investment Management Corporation of Ontario (IMCO), the question of external counsel selection is about what a firm actually contributes once it is engaged.
“The firms that add the most value are those that can take information — review, assess, synthesize — and be a real partner in discussing what it means for our risk appetite and business objectives,” Garson says.
Check out this podcast from Canadian Lawyer’s CL Talk on how in-house counsel can become a trusted strategic advisor:
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Criteria in selecting external counsel
When selecting external counsel, GCs say that technical expertise is the price of entry. However, it is not what gets a firm onto the shortlist and keeps them there.
Laure Fouin, Associate General Counsel at Coinbase Canada, is direct about this. Securities regulatory expertise is a baseline requirement for her, given the nature of Coinbase Canada’s work.
But technical knowledge alone is not enough. What matters more, Fouin says, are:
- striving to actually understand what they do and understand their product, and
- giving them actionable, risk-adjusted, and business-centric advice
“Now that AI exists, ChatGPT can give me the full list of regulations I need to look at and interpret,” Fouin adds. “That is definitely not what I need from outside counsel. What I need is advice based on my risk appetite and my business priorities — not a list of regulations.”
Garson agrees. “Private practice lawyers are great at spotting issues and doing analysis, but many struggle to stretch into the risk question — is this an acceptable level of risk given the organization’s objectives?” he says. “That’s the gap I look for growth potential on.”
When selecting external counsel, Reiter wants external advisors who are completely current on their subject and connected to regulators in real time. “We work with people who are living and breathing the subject, connecting with regulators, who in 10 minutes can say ‘I’m right on top of that issue and here’s my perspective,’” she says. “Those conversations are tremendous in redirecting our thinking.”
Managing relationships with external counsel
Two things stand out in managing relationships between GCs and outside firms:
- the relationship built over time, and
- understanding the legal issue in its full context
“We have really good partnerships with firms that have gotten to know us over the years,” Wong says. That familiarity is something a new firm cannot replicate quickly, and it is part of what Wong is protecting when she chooses to maintain long-standing relationships.
On the other hand, Turgeon manages his external counsel relationships through clearly defined mandates, but the standard he holds those firms to goes beyond mandate delivery.
“For large, multifaceted projects like ours, both in-house lawyers and outside counsel need to consider the legal question in its full context,” Turgeon says. “I look for that quality whether I’m hiring in-house or engaging outside counsel: someone who can understand more than just the law and who is genuinely engaged with the full picture.”
How to select outside counsel: More of a partner than just a provider
The criteria GCs follow when selecting outside counsel are straightforward, but the expectations have quietly risen. The bar right now sits at keeping as much work in-house as possible, going external when the expertise or capacity is not there, and only keeping firms that genuinely understand the business and can prove it every time they pick up the file.
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