A shift in direction

AC: What is the current composition of the in-house team at Telstra?
WI: The team is made up of a bit over 100 lawyers, together with paralegals and a small support team (our lawyers are relatively self sufficient compared to lawyers in private practice) who undertake a range of work. The legal team is structured in the same way as our business divisions and is largely co-located with our internal clients, although all the lawyers report to other lawyers (except for me – I report to the CEO). More than half the legal team are women, as are more than half my direct reports, and we have a significant number who work part-time given the demographics of telco lawyers in Australia; because of open competition commencing in the 1990s, which led to a huge increase in legal work, most telco lawyers are in the 30 to 40
age bracket.

AC: What are some of the biggest challenges the in-house team has had to respond to in recent years?
WI: Responding to major changes in our industry such as the Australian Government’s plans for regulatory reforms and the A$43 billion (US$38b) national broadband network (NBN), which is a very big deal in a country with Australia’s very spread-out population. The NBN is the largest single infrastructure project in the country’s history and has led to very complex transactions under which Telstra, as the existing incumbent telephone and internet company, will lease infrastructure to the Government’s new fibre network company. At the same time, we have seen our revenues declining and huge pressures on costs across the business, which has led to us looking for innovative ways to source legal work from our law firms and a move to non-hourly based billing.

AC: How is the value and cost of Telstra’s in-house team measured?
WI: To measure value, we do a comprehensive on-line survey of our clients, plus major matter reviews each year. We also track and manage our costs very closely via an on-line matter management system.

AC: In which circumstances might Telstra seek the advice of external counsel? Are there any criteria followed in choosing suitable practitioners?
WI: We have a panel of firms that we choose every few years after an extensive review. We brief out a large number of matters and also make wide use of secondees, as we find that ex-secondees back at the firms are usually far more productive than lawyers who haven’t been on secondment. We brief out based on expertise, scale and capacity criteria, and when briefing externally it is usually the individual partner or lawyer that we are focused on briefing, not the firm they belong to (where they have strong skills, we have a history of following good people when they have moved firms).

AC: Does Telstra expect more flexibility from its external legal practitioners in the current environment?
WI: Yes – via fixed fees and the other arrangements discussed below. By and large, the firms we use understand the dynamics of our industry and the current economic cycle, so the wise ones have focused on the long term and accept some pain in the meantime. Telstra has been a big buyer of legal services for a long time, and our work has ebbed and flowed in the past too.

AC: Do you have any tips for how in-house teams can cope with tighter budgets in light of economic conditions?
WI: Find some good mid-tier firms, or firms with spare capacity, and work with them on alternative fee arrangements. For example, you might guarantee a firm a certain volume of work in return for fixed fees, piecework rather than timed rates, or even just a larger discount than normal. But if you do so, you have to be ready to follow through and take work away from your existing providers, and this is harder when the pie is shrinking already.

AC: How has the in-house role evolved in Australia during your years in practice?
WI: Fifteen to twenty years ago, in-house was seen as the poor cousin to private practice. Today that is not the case at all. A number of managing partners of firms have moved in-house into General Counsel roles, and surveys suggest that far more private practice lawyers want to move in-house than the other way around. Given the level of regulation of many industries, in-house lawyers these days play a key strategic
and competitive role as well as facilitating business transactions and protecting the company when disputes arise.

AC: Is there a sense of community amongst in-house lawyers in Australia?
WI: Yes. At the big company level, senior in-house lawyers talk and meet very regularly, and the Australian Corporate Lawyers’ Association has grown very rapidly in recent years too.

AC: What advice would you give to in-house counsel striving to obtain a seat at the table alongside senior management?
WI: Learn everything you can about the business, ask insightful questions, think about the business’ objectives, and be relevant when you talk. Also, be proactive in making suggestions, but test them first with middle management if you need to. For lawyers, our task is often to make others look good, whether that is senior or middle management. If you are useful and help them, whether in how they analyse and solve problems or seize opportunities, they will want you in the room. AC