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Do you have any effective techniques for getting the most out of external counsel, in terms of how to instruct them?

Höegh LNG is committed to continuously improve the way we are working. With the aim of increasing efficiency and productivity, we have introduced outside counsel guidelines as the primary way to communicate our expectations for work performed by external counsel. To my understanding, this is not common practice in Norway. However, as a member of the Association of Corporate Counsel (ACC), I had access to a variety of guidelines in ACC’s resource library and could easily adopt a set of guidelines that fitted Höegh LNG. We believe the guidelines will assist us in obtaining the highest quality and most efficient form of services from the law firms we work with, all for fair prices. The purpose of the guidelines is to strengthen the relationship between the legal department and our law firms and setting clear expectations from the company in terms of instruction rights, billing guidelines, payment terms, travel, reporting, budget tracker, dashboard, communication, and evaluation. We believe having thoughtful conversations around staffing, communication and billing expectations are paramount for fostering an advantageous, long-term relationship.

Do you have any effective risk management techniques and compliance strategies that can translate across a global organisation?

As Höegh LNG has operations on nearly all continents, risk management and compliance have high priority. The responsibility for both risk management and compliance lies with each function and employee. This is important to ensure proper ownership. We have a group function which is responsible for the enterprise risk management process, including ensuring that relevant policies and procedures are established and implemented, templates are available and that relevant employees get training in risk management. In order to ensure a structured approach in strengthening the corporate culture of integrity and compliance within Höegh LNG, we establish an annual business integrity and compliance plan for the group. The plan covers aspects such as tone from the top initiatives, compliance awareness campaigns and training program, in addition to actions identified through compliance risk assessments, employee compliance surveys, incident reports and internal audit and internal control over financial reporting processes and findings.

Have any new laws, regulations or judicial decisions greatly impacted your company’s business or your legal practice?

I appreciate the importance of staying compliant, however, with the ever-increasing compliance obligations imposed on all businesses, this will be increasingly difficult. The EU’s General Data Protection Regulations is an example of new rules which have an important purpose. However, the bureaucratic, very detailed and difficult available regulations apply in-full to all businesses, not only to those who are the main target. Same applies to the know-your-customer regulations under the anti-money laundering rules. Sometimes you feel you are a criminal until documented otherwise.  

Looking forward, what technological advancements do you feel will impact the role of in-house legal teams in the future the most?

In the FSRU business, the contracts are often long and complex with several schedules. This applies to both customer charters, shipbuilding contracts and financing agreements. Hence, I expect that artificial intelligence will have a big impact, both in terms of assisting in reviewing the risks and the contract provisions and identifying ambiguities and contradictions in the single contract and across agreements.

What can law firms do to improve their services to the legal department?

Most importantly, the law firms need to fully understand who the client is and what the client’s expectations are. When a company has decided to have an in-house legal team, it is expected that the in-house team have full overview of all relevant legal matters. Hence, external lawyers who operates directly with the commercial teams without involving the in-house lawyers, have misunderstood their role, unless, of course, this is the client’s instruction.   

Thought Piece: External Counsel Tenders

Höegh LNG has recently conducted a tender for legal services in close co-operation with the company’s global procurement department and the various business units. The purpose was not only to obtain the best rates from the selected law firm, but to enter into a strategic partnership.

The cost aspect was inevitable an important part and the tender requested the law firms to provide quotes for different price models. In order to better control legal spend and cost, the law firms were requested to accept Höegh LNG’s outside counsel guidelines.

In addition to demonstrate qualifications within the relevant legal areas, the law firms were requested to respond to various non-legal matters which are important to Höegh LNG:

The law firms were requested to advise which measures they had implemented or were in process of implementing and planning for in terms of digitalisation (electronic attorney-client portal or use of artificial intelligence for contract revieware some good examples of this). As Höegh LNG often are involved in complex projects, it is important that the external lawyers can demonstrate effective project management. Hence, the law firms had to advise both what formal competence lawyers proposed working on Höegh LNG matters had and what the law firm offered in relation to ensuring effective project management on legal matters.

Data is powerful. We know our outside counsel generate and track a significant amount of data about the clients and the matters on which they work. The law firms were requested to provide an example of a dashboard or report of various metrics highlighting the relationship between the company and the law firm. The dashboard or report were to include any metrics that the law firm thought would be useful in showing the value of services provided to Höegh LNG and the effectiveness and efficiency of the law firm. We asked that the dashboard should include, at a minimum, the total invoiced amounts across all matters, the timekeepers staffed to matters, and the mix of alternative fee arrangements provided.

The law firms were requested to demonstrate through surveys, legal directories or feedback from other clients (or similar) how the firm delivered on quality and service experience.

Höegh LNG is committed to diversity, both internally and in its outside counsel hiring practices. Hence, the law firms were requested to demonstrate which measures they had taken to maintain a working environment that respects individual rights and dignity.