We asked Missouri in-house attorneys for their advice on dealing with outside counsel. Here is the wisdom they shared on what works — and what doesn’t.
1. BE CHOOSY
What’s the right situation for outsourcing a matter?
For Bill Colby, general counsel at Truman Medical Centers in Kansas City, it’s “when you can’t figure out the issue yourself.” In his case, such issues include bond financing, tax credits or billing matters that involve complex federal laws. He’s not afraid to ask for guidance in those areas.
“That’s what the best outside counsel do, to me: Give you comfort that you’re heading in the right direction,” he said.
Philip Kirkpatrick, the St. Louis-based regional general counsel of Rabobank North America, will farm out only litigation and low-stakes, high-frequency matters. With those, he said, “it’s almost like making widgets at a certain point.”
Once you decide to use outside counsel, Kirkpatrick said, choose wisely.
“Our adage is do the due diligence in the beginning, because once you go live with someone, you’re stuck. So put in the upfront energy to make sure you make the right choices.” And to make that choice, he added, you need to be very clear about fees.
“You have to be very aggressive on the compensation piece and establish what happens if we deviate from the schedule. I’d much rather have those conversations early. We don’t want to be in business of making an unfair partnership, but we also want the third-party provider to manage the risk of a cost overrun.”
Kirkpatrick said it’s crucial to make outside counsel feel comfortable enough to push back, too.
“If there’s things I’m doing to cause the overage, tell me,” he said. “If I can figure out how to make your life easier, I’m going to do it, because at the end of the day, I don’t want to have renegotiate rates because I’ve used up too many of your resources.”
2. ASK AND YOU SHALL RECEIVE
Elizabeth Minogue knows too well the dangers of sparse communication.
“I’ve sent a question by email and gotten a 10-page memo back, and I didn’t necessarily want to pay for that,” said Minogue, who is assistant general counsel, M&A and Securities at Post Holdings Inc., in St. Louis. “I should’ve communicated how thorough I wanted the response to be, and maybe outside counsel should’ve communicated to me how much complexity there was in my question.”
In her eyes, the lesson was clear: “Open communication really is key. You need to talk about expectations, whether it’s the timing or type of work product you’d like outside counsel to provide.”
Almost every attorney interviewed stressed the primacy of communicating expectations. That can be as elementary as an in-house attorney alerting outside counsel to her own internal reporting requirements, said Kara Larson, assistant general counsel of Kansas City Power & Light.
“If you talk to outside attorneys about how frequently you’d like to be updated on the matter,” Larson said, “they help you get the information you need to do your job.”
3. PLAY TO THEIR STRENGTHS
Julia Brncic, who is vice president and deputy general counsel for litigation at Express Scripts Holding Company, said it’s crucial to recognize what outside counsel excels at, then assign work to them accordingly.
At Express Scripts, Brncic said, incoming matters are assessed internally to determine financial risk and public-relations risk. The higher the risk, the more likely the company will contract a top litigation firm, yet there also are many low-risk matters that pop up over and over that don’t require such an outlay. For those matters, the company has developed “playbooks” so outside counsel can get up to speed quickly on facts and arguments that have worked in the past.
Brncic said that for matters involving a massive amount of discovery, a common practice used to involve sending all of that data to outside counsel. She considers that a mistake.
“Outside counsel is not trained to review 10,000 lines of spreadsheet data,” Brncic said. “You need someone with systems expertise and accounting expertise. A lot of issues were solved when we stopped providing that data to outside counsel and instead went to consulting experts who told us what we might be missing.”
Creating this kind of division of labor, Brncic said, allowed outside counsel to focus solely on the law.
“It works really, really well to get the right data to the right people with the right expertise,” she said.
4. MAKE YOUR BUSINESS THEIR BUSINESS
If an in-house attorney is sending a lot of work to the same firm, it’s critical to explain how the matters will affect the business so that the attorneys know which to tackle first, Minogue said.
“It’s helpful to prioritize for them,” Minogue explained, “because they don’t know what the CEO is thinking — and that can change day-to-day.”
Larson shared that she has even gone as far as inviting outside counsel to meet company executives.
“I have found it really helpful to bring my outside counsel into meetings with some of our business people so they have the opportunity to hear what our business people’s goals are, to over time develop relationships,” Larson said.
In the context of interviewing witnesses within the company, however, outside counsel should be thoroughly prepped before ever sitting down with them, Brncic pointed out. She and her outside colleagues often walk into an executive’s office carrying binders with tabs.
“It’s not quite to a level of preparedness for a deposition, but it’s darned close,” she said. “When you’re taking up an executive’s time, it really benefits everyone if you know what you’re looking for. We have outlines and game plans, and we know what we need to find out.”
At the end of the day, Brncic said, outsourcing legal work does not mean outsourcing all responsibility.
“I would not advise just throwing something over the wall and hoping for the best,” she said. “Management is really important. You need to find that balance of trusting the attorneys you’re working with so they can provide the right kind of advice while also being very much engaged and not afraid to question some things.”