What do general counsels want from outside lawyers?

Imagine you are a general counsel or other person responsible for purchasing decisions for legal services. Then reflect on how your performance is evaluated in terms of the work product of your team. You’ll realize that your criteria for selection and retention of help from outside counsel will include: 

• Strong technical competence
• Cost-consciousness
• Results-orientation
• Responsiveness
• Flexibility
• Integrity
• Diversity
• Business acumen

And that implies these seven criteria for selecting our outside counsel.

1. Just OK can be good enough

Verlyn: The lawyers I engage must have a level of experience and competence in the area of law involved. I will not hire a lawyer or firm to handle something outside of their area of specialization, no matter how highly I think of that lawyer or firm.  But the level of experience and competence I look for is highly dependent on the particular situation.  Because it’s generally true that the very best lawyers cost the most, I don’t often seek out the very best lawyers.  The work we don’t handle in-house is primarily employment and commercial litigation, with some real estate, transactional, or IP work thrown in, and most of our litigation is what I would characterize as routine, low-stakes, and/or low-merit.  In these limited-exposure cases, I don’t need the sophistication, depth and research capabilities of a top-tier firm – I just need someone with some demonstrated practical experience and a strong business orientation. 

To me, a lawyer with a business orientation will help me create a strategy that produces the desired result at the lowest possible cost. This requires, for instance, a willingness to prepare and file a motion that may not be perfect, but is good enough to accomplish our tactical objectives.  This kind of thing is anathema to some large firms I’ve worked with, apparently because they feel anything that has their name on it has to be the best possible quality.  Fortunately, many smaller firms understand this, and one benefit of the lawyer glut for people like me is that you can find very capable lawyers with business orientations at smaller firms for half the cost of big-firm representation.

Carolyn: Given the reasons why we engage outside counsel, and based on the skill and technical background, training and knowledge of our staff, we generally look for outside counsel highly recognized in his/her field of subject matter expertise.  Strong technical expertise and extraordinary professional competence is a basic requirement for outside counsel.  We typically look to counsel who can add value to our complement of in-house talent.  We want outside counsel who work well with our internal business partners and express interest in developing solutions to meet the business goals and objectives.  

We have developed a panel of attorneys that have worked with us over time.  These attorneys have demonstrated outstanding ability to provide not only the necessary technical competence; but also, critical strategic thinking to achieve excellent results and meet our expectations.  Those that do not are no longer considered for continued business.  We do changes to the panel depending changes in our needs, as well as the level of services received.  

GC Checklist:

Appropriate level of experience and competence Business results orientation Team player who works well inside Value for money

2. Firm reputation not so important

Carolyn:  As a practical matter, we generally hire attorneys based on their individual reputation, skill set, and work style, not law firms.  In certain situations, however, it does help to also have the weight of a prestigious law firm, well renowned for its success in the type of matter at hand, to influence the outcome of the case.  Any worthy opponent will consider the reputation of the attorney and the law firm on the other side in assessing the strengths and weaknesses of his/her own case.  

Verlyn: Firm reputation, at least in a general prestige-oriented sense, is relatively unimportant to me in most of our matters.  This changes whenever the matter has attracted the attention and interest of our CEO and CFO.  This is true for three reasons:

• First, there is at least some correlation between reputation and excellence, and obtaining the highest quality of representation is obviously important in a high-stakes matter. 
• Second, quite candidly, if management’s opinion about my performance and judgment are going to be affected by the perceived success or failure in the matter’s outcome, I am motivated by a self-preservation instinct to deprive them of at least one possible basis for criticism – my choice of outside counsel. 
• Lastly, in these types of matters I need to consider whether the CEO or CFO have relationships of their own that I ignore at my peril. 

GC Checklist:

Individual reputation Relationships with top executives Firm reputation possibly, depending on situation

3. Transparent billing practices:

Verlyn: This may be a personal pet peeve, but I am negatively predisposed toward any firm that makes it difficult to determine whether its rates and charges are excessive.  To my mind, firms that do not list individual billing rates, for example, are intentionally trying to conceal their rates from me, which obviously reflects negatively on them.  I also get annoyed by all-day entries with twelve activities for a total of 11 hours that make it impossible for me to discern whether any of those activities took longer than it should have. 

As one last example, firms also should never bill on a given month’s invoice for charges incurred in previous months.  I reconcile my invoices against my monthly budget closely and at times have to report internally fees incurred to date on a matter, and I don’t appreciate having to revise my expectations or communications because a firm can’t get its people to submit its time sheets.  The point in all of this is not that I’m looking to nickel-and-dime outside counsel (I don’t), but that the invoice is the easiest way for me to determine whether they take my concerns seriously and are performing my work in a cost-effective manner.

GC Checklist:

Measurable cost-effectiveness Timely billing for monitoring Open disclosure of rates

4. Timely communication

Verlyn: We fully expect our outside counsel to get back to us within a few hours, if at all possible. We think this feeling is relatively common among in-house lawyers, and may have something to do with the lifestyle for dollars tradeoff we have made by going in-house, i.e., if law firm partners are going to make two or three times what we are, the least they can do is come running when we snap our fingers.  As unfair as it may be, we will not continue to use outside counsel who do not appear to us to be accessible and responsive.

GC Checklist:

Timely responsiveness Accessibility Addresses issues and concerns Giving us a sense of control

5. Appropriate strategic deference

Verlyn: While outside counsel usually have greater expertise in the area of law involved than we do, outside counsel need to realize that we know our mutual client and its values better than they do, and they are not necessarily smarter than us just because we are in-house.  When we make a strategic suggestion in a matter to outside counsel, we expect it to be carefully considered.  If it is unwise for some reason, we have no problem with being told why, but it should not be ignored or dismissed.  In the last few years, we have become convinced that we were too deferential to outside counsel earlier in our careers.  At times, we have detected a subtle condescension in the way outside counsel view inside counsel’s opinions, and this does not sit well with us at all.  For example, a consumer products company does not tell its customers that its tastes are stupid.

GC Checklist:

Respect Recognition of business and legal insights understood     from within the company Adds value to inside resources Team player

6. Cost-consciousness

Carolyn: Our concern is that outside counsel manage the case in a manner that is not designed to manufacture fees, but rather lead to the desired outcome as expeditiously as possible.  Clearly, there is always more than one way to accomplish the same result.  We are looking for the high quality, low cost services.  We do not, however, expect to sacrifice quality for cost. We are always interested in working with counsel who are willing to consider alternative compensation arrangements.  In fact, we currently have discount arrangements with highly utilized firms.  

Our Retention Guidelines set forth our billing requirements and matter management requirements.  For example, in general, we do not believe it is necessary for two or three outside lawyers to attend the same meeting with us or with the opponent.  We do not expect to incur expenses for such an occurrence. If outside counsel believes in any particular matter that our Guidelines are not applicable or could impair his/her ability to provide quality services, he/she can explain and we will likely waive any restriction.  Again we are cost conscientious but we will not sacrifice quality, for cost.  Our in-house attorneys know which law firms work effectively and which ones provide the best value.  

GC Checklist:

Focused on business outcome Cost management and cost-consciousness Value for money

7. Diversity

Carolyn: To achieve the best value, we have learned that it is imperative to bring diverse perspectives to bear on addressing our legal and business needs.  Different individual viewpoints add to the quality of thinking and produce more creative approaches and solutions. In addition to enhancing the quality and clarity of our perspectives, a commitment to creating and maintaining diversity within our legal department and outside legal service providers also allows us to better serve a diverse internal client base.

Diversity shapes our ability to develop key strategies.  A true commitment to diversity is fast becoming essential to law firms attracting and retaining large corporate clients. We expect our outside law firms to consistently assign a diverse team of attorneys to work on our company matters as a basis to continue doing business with them.

GC Checklist:

Diversity in staffing and perspectives Creativity in solutions

In summary, the best outside counsel have the following attributes, and will be selected or retained by general counsels accordingly:

• Recognized for subject matter expertise and experience in area of practice.
• Applies legal advice to client’s business and provides analysis that helps the client meet business goals and objectives.
• Is cost-conscious.
• Adds value to existing in-house staff
• Anticipates client needs.
• Offers solutions to issues and concerns.
• Is a strategic thinker and clear effective communicator.
• Is accessible, timely, responsive, and results-driven.
• Provides diverse viewpoints.
• Exceeds client’s expectations.