(OCG Week) Outside Counsel Guidelines — Client Concerns and Challenges

Disqualification week was a hit. So let’s focus on another theme this week. Several interesting stories, updates and perspectives to share on the always hot topic of Outside Counsel Guidelines. So many, that (like a lengthy document with many interesting nooks and crannies) it makes sense to break this update into a multi-day affair. First up, analysis and opinions from the client side of the equation, which is always helpful to keep in mind. (Guess what’s up tomorrow?)

First, Barnes & Thornburg partner Karoline Jackson and legal operations manager Shanna Davidson make some strong “Brussels Sprouts”-like assertions, worth reading in full in: “Outside Counsel Guidelines Drive Positive Change” —

  • “What we are seeing in the legal industry is that many clients are facing increased pressure to manage their corporate legal budgets… A positive change we are seeing, because of these internal changes, is that many law firms are now responding with their own centralized process improvement initiatives. Since a law firm’s retention of clients is often dependent on compliance with these guidelines, we see more law firms developing their own legal operations departments. Over time, we think that the institutionalization of legal operations will maximize the value of efficiencies across all departments and help build sustainable, outcome-driven partnerships with clients.”
  • “From a client’s perspective, outside counsel guidelines are a way to bring predictability and standardization to all of the law firms that work with a company. However, from a firm’s perspective, outside counsel guidelines are not standard, because each client has its own requirements. While this can be challenging, it also can be viewed as a positive, because the variety helps us identify trends in what the client values; then law firms can proactively collaborate with those clients on those issues throughout the year.”
  • It is important to build processes around reviewing those outside counsel guidelines at client intake or when a revision to an outside counsel guideline is made for an existing client. The goal is to centralize where those contracts are stored, not only from an electronic standpoint, but also in terms of who has responsibility for portions of those contracts. By extracting key information from the guidelines and setting validation rules to warn key stakeholders when there are possible upcoming violations, you can make sure that you don’t run afoul of any of the client’s technical requirements.”

Next a direct client view, though from an anonymous author only described as “in-house counsel at a well-known company that everyone loves to hate,” who published: “Outside Counsel: Work With Me, Not Against Me” —

  • “So, in this age of cost-cutting and zero-sum budgeting, you would think the outside counsel we do bring in for non-bet-the-farm litigation would get with the Program. And the Program is simple: ACT LIKE AN ATTORNEY AND DON’T MAKE ME LOOK BAD. No, really. It’s that simple. And yet, for as many outside counsel I adore and keep at the top of my rotation, there seems to be an equal number of bad eggs out there. And it all boils down to one true thing: Don’t act like a business person.”
  • “First, don’t make me chase you. If you say in your email you’ll have comments back by this Friday, then I should have the draft by (wait for it) Friday.”
  • “Follow directions. Particularly, when it comes to billing. Yes, I too hate our billing software. I completely support your theory it was designed by soulless millennials. I sometimes spend more time approving your invoice than I do reading that email guidance you gave me. But, like the tide, the software is inevitable. Please don’t try and skirt the process, or ask me to make an exception for you. Remember the Big 4 ex-pats? They’re all over these invoices and reports like flies on … garbage. I can’t move up your payment term. I can’t approve your block billing. Please just follow the directions in the outside counsel guidelines I gave you.”
  • “Maybe the answer is, I actually was right all those years ago on that panel, when I said the key to a successful partnership with an outside counsel is clear and concise communication and level setting of expectations. Maybe being more explicit up front as to how I expect us to work together is the way to go. And in any event, it should at least cut down on the amount of memos that cross my desk.”

And finally, law practice management consultant (and former GC of the ACC) Susan Hackett writes and excellent advisory for client eyes: “Are your outside counsel guidelines working for or against you?” —

  • “Most in-house and outside counsel feel that their outside counsel retention guidelines and RFP processes don’t do much to improve their inside/outside counsel relationships, even though both sides agree that both are very important and they spend large amounts of time on them. Why is this the case?”
  • “If you ask me, it’s because most guidelines and RFP processes are very often written poorly, promote dysfunctional behavior, and are not developed to promote the purposes they were designed to address. “The most jaw-dropping outside counsel retention document guideline I ever saw was one issued by a large company/large department that was 327 pages long. The idea that anyone was conversant with what was in that document (on either side) or had any intention of either implementing or enforcing it (until they wanted to prove their point in an argument) is crazy.”
  • “As a document written by corporate counsel, retention guidelines are a one-sided, one-way list of requirements or demands. Sure, the department owns its own business and relationships, and often these documents reflect the learnings of decades of relationships with firms… But it should be noted that a one-sided document in a relationship that is supposed to promote a partnership is not a governing document that will likely succeed in creating a win-win experience. It is like one hand clapping.”
  • “I’d also argue that many guidelines promote exactly the opposite behaviors than they are intended to promote. Lawyers may look to follow the letter of the rule, rather than the spirit or intention of the document. Or because a massive document exists that is supposed to regulate the relationship, lawyers on both sides may forget or forego conversations that should be part of the start of any successful relationship. Once a document like a guideline is filed, it is often forgotten and gathers dust.”
  • “But perhaps the best review of your guidelines and suggestions for how they could be more successful might come from some of the very firms they’re intended to “regulate.” Why not invite them to be partners in your guidelines, so that you can prevent both sides from being victims of them?”
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