In-house legal teams have many reasons to work with outside counsel, ranging from litigation support to expanding your company’s legal knowledge and expertise. Even large corporations with dozens of lawyers on staff often retain outside counsel to help manage specific legal matters.
But according to a recent survey, 73% of in-house counsel are concerned about overspending on outside counsel, and 55% of respondents are prioritizing reducing legal spending as a 2020 initiative.
One way to reduce spending on outside counsel is to ensure these relationships are managed as efficiently as possible. Here are four tips for working with outside counsel to avoid potentially costly and time-consuming setbacks.
1. Set clear expectations from day one
When you are working with outside counsel, it is imperative that you not only set clear expectations for the assignment, but also for working with your company in general. Everything from how you communicate day-to-day matters to how you deal with occasional conflicts varies between companies, and accordingly you need to make sure everyone is on the same page at the start of a new project.
Start by setting out your general requirements for working together, and provide answers to questions like:
Who are your organization’s decision makers?
Who has authority to approve contracts and proposals?
How often should outside counsel check in with you?
From there, you should also ensure clear expectations are communicated around one-off matters, like completing risk assessments prior to initiating new contracts or litigation matters.
2. Communicate openly and consistently
One of the greatest challenges of working with outside counsel (or any other external partners) is harmonizing working processes and procedures. If one group prefers to work in Word and the other in Google Docs, even something as basic as document drafting and sharing can get messy.
To avoid this, consider creating a set of standard operating procedures (SOPs) for your core activities and sharing these with outside counsel prior to commencement of a project. Not only will this save you hassle in the long run, but it will also help minimize any micro-conflicts that can place strains on what otherwise could be a very fruitful relationship.
When crafting SOPs, remember to be explicit about even the smallest of details. It may seem obvious to you that a specific member of your department should be copied on all emails related to a project, but that may not be so to every member of the outside counsel team working on your account. Avoid confusion and conflict by communicating openly and consistently and asking for the same in return.
3. Implement legal project management best practices
Finally, consider legal project management (LPM) best practices in any matter involving outside counsel. According to Practical Law, broadly-speaking, LPM improves communication between the two parties, increases financial predictability (fees and costs), and allows in-house teams to better manage risk.
To ensure effective implementation of LPM best practices in working with outside counsel, you should:
Define a matter’s scope, which may include outlining steps to achieving a clearly defined goal and scheduling project phases and deadlines.
Ensure agreement on key matters, such as the project scope, deadlines, budgets, and client confidentiality requirements.
Identify, assess, and appoint the correct individuals to make up the team, from in-house managers to outside specialists.
Arrange for compliant data management practices that not only ensure case files are stored securely but that enable advanced analytics and tracking for audit purposes.
Provide a means of addressing out-of-scope requests and/or conflicts that could affect performance of obligations in respect of the project.
Monitor and analyze project issues, deliverables, timelines, and other key metrics that indicate the success or failure of a project.
4. Ensure technology is in place to support the relationship
A variety of software solutions exist specifically to help better manage relationships with outside legal vendors, including things like legal spend management software. Other solutions like contract lifecycle management software give you a way to store all of your company’s corporate agreements in a secure, online repository, and set varying levels of access to specific groups of users. Using contract management software, your legal team has one place to keep all documentation related to your outside counsel partnership, meaning individuals from the outside firm can access these files without seeing any of your other sensitive company information.
By following these tips, you can more effectively manage your outside counsel and help reduce legal spending, whether hiring for a one-off assignment or outsourcing an ongoing business process to an external firm.
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