Feedback, advice from in-house counsel

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By Jeff Coburn
Dolan Media Newswires

Keeping up with regulatory compliance in a constantly changing legal environment is one of many challenges in-house counsel face.

The topic came up frequently during a recent Boston panel discussion among four Massachusetts corporate counsel who shared their likes and dislikes in working with outside law firms. Though the panel took place miles from Wisconsin, the insights shared are universally applicable.

Panelists were: Benjamin Berman, deputy general counsel at Kayak Software Corp.; Sarah Mullins, associate general counsel at Yankee Candle Corp.; Racquel Webster, senior counsel at National Grid; and Joseph Herlihy, general counsel at Boston College.

The session began with the question: What are some of the “hot-button” issues facing in-house counsel today?

Among the answers were “the growing issue of intellectual property protection,” “new complexities in risk management,” “the growing importance of Internet data privacy” and “litigation caused by external events out of our control.”

“It’s a continuous struggle to stay adequately informed across a wide range of issues,” one panelist said. “The unknown is my hot button,” said another. “We rely on outside counsel to inform us of what’s out there that we may not be aware of.”

The panelists then weighed in on the kinds of law firm marketing approaches they considered the most effective. Responses included:

• “Word-of-mouth and third-party references are the most credible ways for me to learn about new law firms.”
• “I’m a fan of industry and trade association panels. I recently attended a panel on which one of the lawyers did such a good job that I contacted him afterwards.”
• “CLE seminars are a great way for law firms to show their stuff in front of in-house counsel.”
• “Newsletters and alerts can be very helpful for areas of the law that change a lot, like employment. But use them selectively; don’t bombard us with them.”
• “I find law firm blogs to be very helpful in keeping me regularly informed and updated.”
• “The best way to market yourself is to become known for your expertise in a unique specialty … and then promote that specialty expertise.”
• “Offer to come into our offices and make a presentation on something of interest and relevance to us.”
• “I would recommend participating in listserves for industry associations and other affinity groups.”
• “Webinars, if they’re done well, can be very effective.”
• “If you’re on Twitter, make sure to put your Twitter handle on your business card.”
• “The best way to get introduced to a potential client is to know someone in the organization.”

Among the practices panelists warned against were cold calling the GC’s office about a recent litigation filing or getting a corporate director a lawyer knows to phone the general counsel’s office on behalf of the lawyer’s firm.

The panel was also asked about use of alternative fee arrangements. Most said they had used them, but felt they didn’t have the data to make a meaningful comparison with traditional billable hour pricing.

“With fixed fees it’s hard to know whether or not we’re winning compared to hourly,” one panelist said.

They cited a variety of circumstances in which fixed prices make sense — for example, basic contracts, patent filings, immigration applications, subpoenas and cease-and-desist orders.

According to one panelist, “We have found that planning and budgeting litigation in stages can be helpful in controlling cost.” Another said his company had developed such a clear and detailed set of billing and pricing guidelines that AFAs were not necessary.

In summary, all four panelists said that while alternative fee arrangements played a role in firm pricing, “in the end, the billable hour system works for us.”

As one panelist put it: “The hourly pricing model has been so ingrained in us and we’re so used to it that we have an inherent distrust of newer and different approaches.

Another said, “At the end of the day it’s the quality and the value of the work that counts, not the price. If we’re getting value, I don’t mind paying the bill.”

That led to a discussion of billing rates. The panelists agreed that raising rates is not necessarily an issue, but the way in which law firms raise their rates often is.

“It has a lot to do with the nature of the relationship and how satisfied we are with their services,” explained one panelist. “Recently, a large firm we frequently use for litigation came to us to explain they were raising their rates and the reasoning behind it. The firm had done great work for us, and we have a good relationship and inherently trust them. We didn’t have any problem with their raising rates.”

In contrast, another panelist cited a case in which he received an invoice from a firm containing rate increases up to $100 an hour. “I had no idea about this as they made no attempt to inform us beforehand. I called them to complain. When the response I got was unsatisfactory, I terminated the relationship.”

Another panel member related a “horror story” of an outside firm that raised its rates in the middle of an active case, with no warning or explanation, again resulting in the termination of that relationship.

As to whether rate and cost pressures are causing general counsel to look for smaller, less expensive law firms, all four panelists said yes, for certain types of needs. “I’m interested in learning about boutique and specialty firms in areas such as employment, intellectual property, and for certain types of corporate and litigation work,” said one panelist.

Echoed another: “I’m always interested in boutique firms. We’ve begun to shift business to smaller firms, especially ones with a specialty focus.” Another panel member said, “For certain kinds of patent cases, we’re moving to patent boutiques because the big general practice firms are too expensive for that type of work.”

The panelists were then asked to pinpoint some of their pet peeves in working with outside law firms. Among the responses:

• “My absolute pet peeve is working with outside lawyers who get ahead of me or who work around me by contacting other people in the company regarding our work. It’s very important that outside counsel respect the role of the GC and work with and through us and keep us informed throughout the engagement.”
• “One of my pet peeves is outside lawyers from large firms who are so specialized that they can’t see the whole picture. If we’re working on a deal and I ask, ‘What are the tax implications of doing this?’ They’ll respond, ‘I don’t know, I’m not a tax attorney. But one of our tax lawyers will [know].’”
• “A major pet peeve of mine involves outside lawyers who are working with us but who don’t bother to learn about our business, our industry, our technology. We’re a technology company, and I expect the attorneys they send us will be reasonably technology savvy.”
• “Long emails from my outside counsel drive me crazy. We’re all extremely busy, and we don’t have time to read long treatises. Just give me a summary of the major points and conclusions.”
• “If an outside lawyer does not respond to my email or phone call after a day or so, it’s not only a pet peeve, it’s a deal-killer.”

The session concluded with a question about whether the panelists’ outside law firms solicit feedback from them about their performance and, if so, how such feedback is provided.

“We welcome inquiries from our outside attorneys about how we think things are going. Too often we aren’t asked for our feedback, nor do we volunteer it,” one panelist said. Another added: “Providing feedback should be a regular, ongoing process. The best time to discuss how things are going is at the end of a case or project, when the client can sit down with the attorney and discuss how things went, and what went well and what didn’t.”

One panel member felt that it was his job as general counsel to oversee the quality of outside legal work, and therefore to provide outside attorneys with regular feedback on both their work and on the overall relationship.

“Unfortunately, when we do this, we often focus only on the negative feedback. We need to also focus on what was good and what went well.”

Another commented: “I like sitting down and talking face-to-face with my outside counsel. For one thing, I find it helpful when they tell me what else they’re doing in our industry. I also welcome their coming out to our offices since we are located in the boonies, and it shows that they care.”

Jeff Coburn is the managing director of Coburn Consulting in Boston.