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Help Outside Counsel Make Better Tradeoffs

One company in CEB's networks has a good process to help outside counsel prioritize the right work

Most parents wouldn’t leave their child with a babysitter without first laying out the ground rules for their time away.

They’ll probably come to an understanding with the sitter they’ve hired about what to do in the most common situations: so no playing of video games before homework is done, call the parents if anyone becomes ill, no sugar after 7 pm, bedtime at 8:30 pm, and so on. And they will also explain which instructions are most important, such as informing parents about sickness takes precedence over enforcing bedtime or the video game ban.

It’s Not Just Children that Need Babysitting

Not only is this a good arrangement for looking after your nearest and dearest, it makes sense for a whole host of situations where you pass on responsibility for something important. Like, for example, general counsel instructing law firms to handle their case matters.

But many in-house legal teams don’t seem to agree. Less than a quarter of teams specify priorities for how matters ought to be carried out, which suggests that the outcome of the matter is viewed as much more important. In other words, they leave babysitters to their own devices so long as the child is breathing and intact when they get home.

This tends to happen because of two misguided beliefs. First, that outside counsel already understand the legal team’s business priorities based on numerous prior interactions and, second, that it’s not worth the time it takes to define these kinds of priorities when instructing a law firm.

Don’t Let Legal Firms Decide On Your Strategy

But the reality is that, in the absence of additional guidance, outside law firms will develop their own ideas about how to support a particular matter based on their own past experience. To boot, it takes less time to set expectations at the beginning of a case matter than it does to rework misaligned work later.

Most legal teams do try to influence law firm behavior – most commonly through billing and staffing guidelines – but that’s not enough to get the right work product because it neglects to show the law firm how to make tradeoffs when any conflict arises. To do that, the in-house legal team should be establishing clear priorities for different matter categories.

One route to take is to weigh in at specific intervals laid out in advance, as the legal team at member company in CEB’s network of legal executives does.

Breaking Point

Another member has a process to teach outside counsel about the legal team’s needs before the work begins. This company is a US-based retailer of car parts and accessories, and the legal team used to manage outside-counsel matters on an ad hoc basis. They encountered the same quality problems over and over again: information overload that buried the essentials, little consideration of corporate strategy, and opaque invoicing (see chart 1).

Together, these drawbacks led to higher costs and lower productivity for in-house lawyers. So Legal created a process that got the company and law firms in sync.

Problems with outside counsel

Chart 1: Problems with outside counsel  Source: CEB analysis

Assessing Business Need: A Few Surprises

The legal team began by figuring out the most critical service needs for each type of matter. To make sure that none slipped through the cracks, the team then led discussions with senior line managers and other business leaders that teased out previously unarticulated areas of importance across the company.

Questions included:

  • How often does uncertainty about matter outcomes delay important business decisions?
  • Do you believe that our outside counsel understand our business goals?
  • Are you satisfied with your understanding of how we could prevent future similar litigation?

With responses in hand, the legal team translated the feedback, adding needs that the team would not have thought to specify otherwise (see chart 2).

Finally, Legal compiled high-level guidelines into a grid, covering each need the legal department had across several major matter categories. This saves time for in-house attorneys who would otherwise have to think through how to align work for each separate matter to fit what business partners need.

Business review and legal guidance

Chart 2: Business review and legal guidance  Source: CEB analysis

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