A remarkable career has seen General Counsel Chua Lee Ming spend time as coroner, magistrate, public prosecutor,

and private practitioner. The opportunity to go in-house to set up and lead a legal department arose twelve years ago, and he shares with us some of his reflections on being an in-house counsel. Asian-Counsel: How did your career lead you to your current role with the Government of Singapore Investment Corporation Pte Ltd (GIC)? Chua Lee Ming: I started my career with the Singapore Legal Service in 1984 and served first as magistrate, coroner, and assistant registrar, and subsequently as state counsel and deputy public prosecutor. In 1990, I joined a law firm and practised as a litigation lawyer for eight years. In 1998, I joined GIC to set up and head the legal department. Whilst in the Legal Service, I had the benefit of learning both legal skills and ethics from the best lawyers who appeared to argue cases before me, or who were on the opposite side. My experience in the judiciary taught me the importance of stepping back and looking at issues objectively; this helps crystallize the critical issues of a problem. Litigation practice helped hone my forensic skills and also taught me the importance of understanding human nature. I enjoyed litigation practice; theres nothing quite like conducting a trial in court, examining and cross-examining witnesses, or arguing an appeal before the appellate court. Definitely tiring, at times intimidating, but always exciting. It therefore took a lot of soul searching when the GIC offer came. In the end, what GIC had to offer in terms of experience and exposure was just too compelling. After all, GIC invests all over the world, in the capital markets, in real estate, in private equity, and in infrastructure. Two other reasons influenced my decision to go in-house. Firstly, I had had experience in the Legal Service and in legal practice. Going in-house would complete my experience. Secondly, I had noticed that the in-house role was evolving fast, and the challenge to be part of this evolution was an inviting one. I have had no reason whatsoever to regret or have second thoughts about going in-house at GIC. The experience has been rich beyond what I could have imagined. Testament to this is the fact that I have just completed my twelfth year in GIC! AC: How has the in-house role evolved during your years in practice? CLM: Without doubt in-house counsel have become an integral part of any business organisation. Globalisation and technological advances have made operations of businesses today much more complex. In addition, as everyone knows, regulatory compliance is ever increasing and remains a major concern for businesses. Corporations need legal advisers who have a good knowledge and understanding of the corporations structure, operations and business. There is also increasing use of in-house counsel as a means of reducing legal costs. In a way, this has put more focus on when and how one resorts to using external counsel. AC: What qualities do you think in-house counsel should have? CLM: Being commercially minded is key. Being commercially minded encompasses many things. First and foremost, it is an attitude. It is about always looking for solutions to problems to enable deals to be done. Secondly, it is about understanding the business and operations so that an in-house counsel can help his business colleagues identify other issues that may arise. Thirdly, being commercially minded means identifying with the business; this requires an inhouse counsel to share accountability with his business colleagues in making decisions on legal risks. Fourthly, it is about not losing sight of the big picture. For example, where a legal risk has already been factored into the price, the legal protection that one might otherwise negotiate for becomes less important. In-house counsel must also be realistic in assessing legal risks. Finally, being commercially minded requires in-house counsel to understand industry practices relevant to the business, and to keep abreast of industry developments. An in-house counsel needs to be able to advise his business colleagues early if there are legal or regulatory developments that may affect the business. Often, an in-house counsel is also required to deal with colleagues from different sections of the organization, and who may have conflicting interests. Sometimes, he or she may also have to manage boundary issues or disputes. It is important therefore that in-house counsel should have good interpersonal skills, and be good negotiators and mediators.

AC: In your opinion, what are the main challenges faced by in-house counsel? CLM: Staying relevant! In-house counsel have to stay relevant to the business. This means keeping abreast of developments in the business and being able to prepare oneself to deal with new issues that the business may face. Another challenge is the constant pressure to evaluate the performance of an in-house legal team. Unlike external lawyers, the in-house legal team is largely a cost centre. Finding a workable and fair method to evaluate an in-house legal team remains a big challenge. One of the rare products I have seen in this area is IKD LegalScores an interesting proprietary performance index designed specifically for inhouse legal teams by the Melbourne-based Institute of Knowledge Development. A third challenge in-house counsel face relates to legal professional privilege. The European Court of Justice has held that as an in-house counsel is an employee, he or she cannot be considered independent and therefore internal communications with in-house counsel are not protected by legal professional privilege. The latest case on this is pending the appellate courts decision. Although the decisions pertain to competition cases involving the European Commission, there is a danger that an in-house counsels independence may come under siege in other jurisdictions, including those jurisdictions that afford the protection of legal professional privilege to communications with in-house counsel. In my view, the assertion that an in-house counsel cannot give independent advice merely because he or she is an employee is one that sadly fails to understand the role played by inhouse counsel in todays world. Where it can be shown that an in-house counsel has in fact not acted independently in any specific case, the court may hold that the in-house counsel was not acting qua legal adviser with the consequence that the relevant communications would not then be protected by legal professional privilege. Absent evidence that an in-house counsel has not acted independently, the protection of legal professional privilege should not be denied merely on the ground of the in-house counsels status as an employee. It is true that, in the common law system at least, legal professional privilege belongs to the client. However, legal advisers (including in-house counsel) can discharge their duties effectively only if those who depend on them for legal advice can consult with them in confidence. The ability to obtain effective legal advice, whether from external counsel or in-house counsel, makes for a better legal system. AC

Conquering the divide

The General Counsel for the Shell Group of Companies in Malaysia discusses his transition from private practice to life as an in-house lawyer, and shares why Shells extensive recruitment process helps retain the cream of the crop. Asian-Counsel: How did your career lead you to your current role as General Counsel? Thavakumar Kandiahpillai: I joined private practice back in 1991. I had always thought about moving to an in-house position, but I wanted to first gain the experience of practice and I particularly liked the R&D aspect of law that external practice offers. After 9 years, I then wanted to try to learn the business or applied aspects of law. In practice you are, perhaps necessarily, independent of the businesses you advise, and I have always felt that both aspects R&D and applied law are equally important, and that merging the two would be great fun. An opening came up in 2000 to join Shell in Malaysia. Coming from a corporate finance and banking law background, I initially undertook corporate M&A and finance work, including offshore-financing. I then led the Malaysian upstream legal team for about 5 years, before leading the downstream and the gas business teams. In 2006, I moved to this job, and I have found that everything I learnt in practice proves to be useful to this day. AC: How did you find the transition from private practice to a corporate role? TK: I found it quite easy as it was something I was anticipating. A good practitioner from a fused profession who is adaptable and able to understand the business aspects of law should

not find the transition too hard. After all, there are practitioners who already behave like inhouse counsel, and conversely in-house counsel who behave like practitioners! By that, I mean there are practitioners who are very business savvy yet retain independence to the extent the law and ethics require of them, and in-house counsel who want to keep a distance from their clients. I believe the former will find the transition quite natural, whilst the latter is a dying breed there are very few lawyers in practice today who refuse to help seek solutions and are keen to purely advise on the law, purporting to keep themselves above it all but I have come across such lawyers both in practice and in-house. AC: What is the current composition of your in-house team? TK: I have 3 teams of lawyers spread across 1500km: 2 teams are in Kuala Lumpur and 1 team is in Sarawak. These teams comprise a very diverse group of 21 lawyers, ranging from litigators to M&A experts, with a good mix of skills, and we provide what I believe to be seamless advice. In terms of our lawyers years of experience, the average is 9-10 years post-qualification. As a global function, we report into one of the Group General Counsel based in the Netherlands. AC: Is there such a thing as a typical day for an in-house practitioner in your team? TK: No, I dont think so. We have a good mix of planned, project-type work and, due to the extensive nature of our operations throughout the country, ad-hoc matters crop up without any notice. In addition to planned and unplanned meetings, we do a lot of work by email and online and also have a fair number of telephone calls. We also have to cater for walk-in clients. I think this combination makes our jobs exciting and in many ways, similar to practice. AC: How often and in which circumstances does the Shell Group of Companies in Malaysia brief out? Are there any criteria followed in choosing suitable practitioners? TK: We do roughly 90-95 percent of legal work in-house. We brief out mostly where Malaysian law requires us to we cannot appear in court for instance, but I am revisiting the choice to appear in industrial tribunals and arbitrations. We also brief out for advice on specialist matters like taxation. We have a global guideline for appointing external counsel, which was drawn up with much input from the Malaysian legal team. Locally, we have an extensive, open, and wellreceived KPI process for our litigation-panel lawyers. Appointments are made based on fee quotations and meeting the KPI scores, and we take measures to prevent any conflicts of interest in such appointments and try to keep the playing field as level as possible. AC: What qualities does the Shell Group of Companies in Malaysia look for in candidates for in-house roles? TK: We have a well-established global recruitment process which is considered one of the best, and has even been adopted by some governments. This process seeks out behavioral and functional competencies and long-term potential. From a behavioral perspective, we assess whether candidates will fulfill our Shell General Business Principles and show leadership skills. From a functional perspective, we test extensively on pure legal skills. Some candidates, particularly external lawyers, are very surprised by the depth of our questions. Testing for longterm potential also requires candidates to role-play as top management. AC: What would a new legal recruit find most surprising in terms of his or her role and function in the company? TK: Mostly, new recruits have found the diversity of work and the qualitative and quantitative demands surprising, in addition to the team-work and seamlessness required of them. Practitioners thinking that their work will be less intense when they join us in-house will also be surprised. A very good lawyer who is unable to work in a diverse team, and unable to frequently face intense time and business pressures, will not be able to cope in my team. Great legal skills are a given, and are only the beginning. Maybe that is why we ensure we only recruit and retain top talent. AC: Do you have any tips for how in-house teams can cope with tighter budgets in light of economic conditions? TK: At Shell, we start by separating core and non-core legal work. We have to drop certain activities which are nice to have and which we would have undertaken in less-challenging times, and our clients understand this. The challenge is to continue focusing on critical legal work, come what may. We also have to ensure our lawyers time is allocated as optimally as possible, which includes re-aligning portfolios. Many in-house legal departments time-write and,

if done appropriately, this helps spot inefficiencies in resource allocation. Externally-appointed work also needs to be better focused and accurately defined to avoid surplusage. In addition to obtaining focused opinions, strategy needs to be decided upfront in litigious matters so that costs, and the legal risks, are clear. AC

The skys the limit

Sharifah Julina Afaf Syed Jalaludin, Group General Counsel at Malaysia Airlines (MAS), tells us about her high-flying role and the improving relationship between her legal team and the business Asian-MENA Counsel: How did your career lead you to your current role in MAS? What is the nature and scope of your role? Julina Jalaludin: I joined MAS legal department in 1996 soon after completing my law studies. As a young Associate Corporate Counsel, I discovered firstly that aviation and airline law, though quite unknown in Malaysia, was (and still is) a highly specialised area with few local legal practitioners. My first few years were dedicated to managing and advising on airline and passenger liabilities in Malaysia and foreign jurisdictions (where MAS operates) and providing inhouse legal support to the business in terms of contract review and opinions on commercial contracts and managing the smaller valued litigation matters. I was also made company secretary of one of MAS subsidiaries. I was promoted to General Counsel in 2002 and was tasked with managing aircraft and equipment related contracts, IT contracts which included the outsourcing of MAS IT operations and code-share agreements. I was appointed to my current position as Group General Counsel in 2009. My role is to ensure that MAS Group effectively manages and mitigates legal risks and liabilities while supporting the companys business plans. My scope of work includes providing legal advice to the management team, board of directors and the Government of Malaysia with respect to conventions and foreign laws and regulations which impact MAS, to manage the companys litigation and dispute resolution matters and to educate and increase the legal awareness of MAS staff. AMC: How is the value and cost of MAS in-house team measured? JJ: Our value is measured in terms of the value of material contracts, transactions and revenue generating and cost reduction initiatives which the in-house legal team supports the business with. Further, in terms of cost avoidance, we contribute by managing and containing MAS exposure to claims in dispute resolution matters. Our individual and departmental performance in terms of adding value, delivering results and cost avoidance initiatives are tracked and results calculated annually via MAS Performance Management System (PMS). In 2010, we participated in an industry-wide benchmarking exercise to benchmark the costs of running an in-house legal function against the monetary value in-house brings to the business. We found that our value and costs were very competitive even compared to the other in-house functions. AMC: What are the biggest obstacles faced in your role, and on a broader level by your in-house team? JJ: I think that one of the biggest challenges we face as an in-house aviation counsel is the continually evolving legal landscape of the aviation industry and the effort required to keep abreast of the latest developments which impact MAS operations, especially as MAS is expanding globally and thus we are required to comply with local laws and regulations. In terms of business ventures, the challenge is to ensure that MAS legal risks are mitigated and exposure minimised while enabling the business to obtain the best commercial deal. Striking this balance usually involves tremendous time and effort on our part to communicate our position to the business due to the perception that legal is a stumbling block and creating unnecessary barriers for the business. As Group General Counsel my biggest obstacle at the moment is recruiting and retaining the legal talent within my department. Since we deal in a small and highly specialised area of law it takes between 18 and 24 months to train and develop fully competent counsels to manage aviation and airline law matters. AMC: What is the current composition of your in-house team? JJ: Group Legal Practice (GLP) currently has 16 staff consisting of nine lawyers five General Counsels and four Associate Counsels three paralegals and four administration staff. We are a

centralised legal function for MAS (including our branch stations overseas) and its subsidiaries except for MAS Aerospace Engineering, our engineering subsidiary, where we have two lawyers, one as head of warranty & contracts and the other head of corporate ventures. As part of GLPs Transformation Plan [2010-2012], we are in the process of expanding our organisation to include an additional four lawyers and three paralegals as the demands from the business in terms of legal services has risen over the past five years and also to enable us to deliver our initiatives under the transformation plan. AMC: What is the nature of the relationship between the companys in-house function and the business? JJ: In recent years, the relationship between GLP and the business has improved tremendously due to GLP initiating certain activities which have increased the communication channels between us. These activities include conducting open dialogues, knowledge sharing sessions and training modules, which has resulted in improving the businesss understanding of GLPs role and vice versa. Currently, we find that most business managers engage the counsels on a regular basis for all kinds of legal matters or queries. The business relies on the counsels and appreciates the value we bring as part of a project team in terms of legal knowledge and ensuring compliance to governance. This is evident from the feedback we receive from the business on a regular basis through the Customer Satisfaction Survey (CSI) form which GLP distributes to all who use GLPs legal services. AMC: What qualities does MAS look for in external counsels/ are there any criteria followed in choosing suitable practitioners? JJ: We would naturally look for external counsels who provide quality legal services and are able to design their advice and solutions to fit the MAS business whilst maintaining strict applications of the law. Those firms who provide additional value in terms of training seminars and newsletters and publications would be preferred. In terms of legal costs, we would look for firms who are more amenable to fixed/capped fees with realistic estimates of legal costs to facilitate our budgeting. We also appreciate firms who are cost conscious and alert us before they incur any additional costs which are beyond their estimates. In terms of criteria, we would prefer firms who provide us with a single partner as the point of contact regardless of the practice areas involved, and are able to empathise with our culture and business sensitivities so that solutions proposed are workable and pragmatic to the business. Usually we tend to continue building on the services of existing law firms which have a continuous good track record with us. Currently we do not have a formalised panel of law firms so we review the performance of external lawyers on a bi-annual basis. AMC: When hiring for your in-house team, which candidate qualities would be of most value? JJ: The main qualities which would set apart a potential candidate from the rest would be someone who portrays leadership qualities, is able to see the big picture and has a vision and purpose. The person would also need to be a good team player, creative with the perseverance and drive to deliver results. Most of all I welcome those who love their job happiest are those whose hobby is their job!

Implementing the legal processes required to affect the privileges, obligations, and rights of the organization. Preparing and reviewing various legal documents such as contracts, licenses, leases, sales, purchases, real estate, etc. Applying for registration or copyrights of the products, devices, processes, and trademarks of the organization. Collecting information and evidence for decision making of management. Examining legal information to find out the advisability of prosecuting or defending lawsuit. Conducting pretrial preparations for conference and defending the organization in law cases. Examining material, such as publications, advertisements etc., for legal implications. Performing advisory, informatory, and trial works. Representing the organization before administrative or before quasi-judicial agencies of the National Government. Discussing with colleagues specialized in specific areas of law for establishing and verifying groundwork for legal personnel. Advising officials on government regulations, tax matters, and legal rights. Preparing business contacts, settle labor disputes, administer legal matters, and pay taxes. Advising regarding transactions of business concerning internal affairs, directors, stockholders, officers, and corporate relationship with public.