INTA 2019: Outside counsel must share Starbucks’ values, says in-house lawyer

We can buy fair trade coffee, so why not fair trade legal services? IP experts during INTA’s Annual Meeting in Boston tackled just that topic on Monday, discussing how the legal industry could establish standards to ensure that a business can be successful while also putting people and the environment first.

Starbucks’ IP counsel Yihong Ying communicated how already-established fair trade certifications in the coffee business can apply to the legal industry.

“Sustainability is quite important to our industry, whether it is coffee or IP practitioners,” he said.

Ying said that trademark law already lends itself well to fair trade practices, since IP professionals play a part in branding the very certifications associated with fair trade products. “We use IP as an important tool,” he said.

The non-profit Fair Trade Federation defines the practice as “an approach to business and to development based on dialogue, transparency and respect that seeks to create greater equity in the international trading system.”

Applying this concept to the legal industry, the panel started with two main areas to define a fair trade standard: 1) social responsibility and how conducting business affects surrounding communities, and 2) how law firms can regulate themselves to promote equal competition among other firms.

Diversity and inclusion

While fair trade as a general concept has not often been connected to practices in the legal industry, there are elements of it that already have plenty of visibility, such as diversity and inclusion efforts.

Part of a firm’s social impact is how inclusive it is with its hiring practices. Whether a firm is diverse in terms of gender and race is a consideration that in-house teams already have when hiring legal counsel, even if they are not thinking about fair trade legal standards in general.

Ying said this is a standard that Starbucks already follows, both internally with its own personnel and externally when the company hires outside legal counsel.

“We want to work with people who share our values,” he said. “Starbucks operates in over 88 major countries and areas … To maintain that type of trademark portfolio we need to be able to work with counsel from different backgrounds, and that’s very important to us.”

Ying added that the company currently conducts assessments of its outside counsel to ensure that the firms meet its diversity standards.

Other factors that fall under the social impact area of fair trade include anti-bribery measures, transparency, safe working conditions, and environmental efforts.

Price competition

The main considerations in the second area of fair trade legal service hinges largely around pricing and pro-competitive practices.

It isn’t news that companies have tight legal budgets, and some firms use attractive pricing models as a way to win client work. So the question was posed by the panel: “Is there an ethical line to be drawn when it comes to price competition among law firms?”

If some firms use aggressively low fee structures to appeal to budget-conscious clients, there may need to be a minimum established so that law firm employees are properly compensated for their work and competition is fair, the panel suggested. There are many firms that are based in or have support teams in developing countries, where this type of minimum would be a strong benefit.

This could lead to higher prices than today’s most competitive fee structures, but the panel said that a proposed fair trade certification could entice clients to opt for a slightly higher cost, much the way shoppers choose pricier food products if they meet certain ethical standards.

At the end of the discussion, attendees were left with two questions: 1) should the industry move towards developing a standard or certification for fair trade legal services? And 2) would clients be willing to pay a premium if they were guaranteed these defined ethical practices?

The panel determined that the first step is awareness, adding that with enough attention, established legal organisations might be best positioned to create a fair trade standard in the industry.

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