John Fast, chief legal counsel of BHP-Billiton, said he was surprised that conflict of interest continued to be an area that law firms didn’t get right.

“The area where I think the biggest difficulties arise is in … conflicts, and that is an area where increasingly firms that do not have a very clear conflicts of interest policy are at a disadvantage, and will lose business,” he said.

He said the really “focused” law firms had dealt with the issue effectively. “They enacted a policy, they know what it is, you are unequivocally clear about where you stand with them. You have very clear terms about what’s permitted, what’s not permitted, what you’ll deal with and what you won’t deal with.”

He said conflict of interest had been an issue with one or two firms seven years ago when he was appointed to head BHP’s legal department, but said “surprisingly it remains an issue today”.

“I know that you never want to say no to a big juicy transaction or a client, but in the interests of your relationships … you’ve just got to accept that sometimes you have to say no, because the interests of your client are more important to your long term relationship than the short-term value of an isolated transaction.”

Will Irving, group general counsel at Telstra, said in his view, he would love law firms to “do the impossible” and find a way to keep good three- to five-year lawyers. Beyond that, he said external counsel should really think more about their client’s business and the part legal problems play in its success.

“Think about the end problem, not just the specific legal problem,” he said. “ Lawyers are trained to analyse problems looking at rights, obligations, rules, but need to think more about interests, objectives, motivations, tipping points, external influencers of a party … in terms of changing opinions or behaviours or reaching agreements. Some outside lawyers do this very well. Some don’t.”

David Krasnostein, group general counsel at the National Australia Bank, said law firms should aim to be one of the top-10 things that make their clients more competitive.

“They need to understand where you want to go. What makes you more competitive, what your threats are, what your strengths are,” he said.

It’s “very valuable” if a law firm ensures they understand these factors, he said, and then tries to make sure any laws, regulations or court decisions that might affect them in future are flagged with their client.

“Those sorts of proactive things, where they’re not just sending you a newsletter or an email about some new law, [but] are actually able to connect that to what you do for a living and talk to you about how it affects your business — it’s very valuable firms which can do that,” he said.

See ‘What general counsel want…’ this issue