Monday, July 23, 2012

Managing Outside Counsel

Sometimes, one of the most frustrating aspects of in house practice can be managing outside attorneys.  This may be amplified when working for a smaller company that doesn’t have hundreds of millions of dollars in legal spend.  It only makes matters worse when balancing getting the right representation with managing your internal budgetary goals. Inconsistent service from outside counsel not only takes a lot of my time to manage, but it makes me look bad to my executives.  Neither of which is a good thing if you want more of my legal spend or for me to recommend you to my other in house colleagues. 

I’ve recently had to “fire” an outside counsel and have a discussion with another on expected performance.  It’s not fun having these conversations.  I understand that we aren’t a Fortune 500 and that my work alone will not get you that Summer Bonus.  (Although I have a hard time being to sympathetic as we don’t get Summer Bonuses in house…)  But that doesn’t mean that my matters are any less important or that you can slide on the customer service aspect.  I usually pay a higher hourly rate than those big guys because I don’t get the volume discount, so I expect full service.  And really, is it so hard to calendar important dates or actually listen to what’s being discussed instead of jumping ahead to what you think we’re going to ask next?  Ok, enough of my rant – the real question is how do we, as in house counsel, make this process easier?  I’m still fine tuning my approach, but I have found a few things that work and have few more up my sleeve.   

Here’s my short list:

 First, and definitely most important is to set clear expectations.  Is the firm going to be a general fall back for all sorts of matters, or will the representation be limited to a single matter?  What’s the scope of the matter?  What’s the urgency?  Why is there urgency?  What will the rates be?  Perhaps more importantly, what won’t be billable? 

Next, set milestones for review.  For litigation, after the initial analysis I want to review whether the initial case summary/strategy is still right, or if the budget and expectations need to be reset.  For IP issues, I want to know when each step is filed or each office action is sent – and when to expect the next. For transactional matters, I want to touch base after the initial contract review and again after the first round of negotiations.  I don't want a play by play, but I do need an overview so I can keep everything in line with expectations.

Finally, here’s one I’m starting to implement:  get feedback from the internal clients.  At relevant milestones and at the end of the matter solicit feedback from internal clients and rate the lawyers and firms yourself.  This helps to benchmark whether the firm/lawyer met expectations or if they need to work harder to get the next matter.  I will also share the results with some of my in house colleagues to see if my experience is unique or to recommend for or against their use of a particular firm or lawyer.   It’s a good idea to let your outside counsel know that you’re doing this.  People who know they’re being measured tend to try a little harder than ones that are banking on a good result to erase the bad process to get there.

Now you know mine.  I’m curious, what tricks have you found that help manage outside counsel more effectively?

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