As we move toward the end of 2013, in-house counsel should place onto their agendas a formal meeting with their outside firms to review the following core topics: success rates and accomplishments; budgets; and a preview of the business issues for which they are preparing in the new year. In a perfect world, your outside counsel would have scheduled this meeting twice yearly, like clockwork. As well-intentioned as many partners are, it's not likely that most will come to you, list in hand, to have this conversation. As you well know, the months of November and December often involve warp-speed client deals that must close before the end of year; litigations that need to move off a client's books before the bubbly is poured; and tax issues that need to be settled before anyone begins to even consider humming “Auld Lang Syne.”
Equally compelling are the collection “derbies” that take off this time of year. This juggernaut hampers even the most diligent partners from taking stock and looking back at the current year. You will definitely hear from your outside firm if there is a bill to settle, so combine the billing talk with the quality talk. We never have someone’s attention as keenly as we do when money is at stake.
What are some questions that your outside counsel expect you to ask about their service? My insights here come from having these conversations with partners about major accounts at year-end. (I was fortunate to work for very large firms that never left these issues to chance – they understand just how competitive a marketplace it is today and have no intention of squandering your business.) These questions may be different from some of the ones you might pose, and I share them to give you insights into where your outside counsel may be focusing.
1. Were there any objectionable surprises in our service?
Outside counsel certainly understand that your least favorite activity is standing before your board of directors and explaining how a selected law firm made an error or ran up an insane budget that puts your own bonus at stake. Your losing any part of your compensation is considered the holy grail of errors and is on the mind of every one of the best practitioners with whom I have worked.
2. What did we do this year that had the biggest positive impact on your business?
Outside firms don’t always appreciate that some of the smaller matters they handle successfully have particular political impact. Detail for them which matters made you appreciate their skills most.
3. Did we adhere to budgets? How did we help you save money?
In this marketplace, any law firm not pointing out how they are saving money and delivering great service is risking your business.
4. How do you feel about the team? Is there anyone you don’t like working alongside?
The response to this question almost always garners glowing news about senior associates. Be candid with your outside firm they need data to elect the most talented to partner status and ensure quality succession in the handling of your accounts.
5. How do we stack up against other firms with whom you currently work?
There is way too much navel gazing in even the best of firms. Let them know if a competitor is making you happier in any element of your relationship.
6. Are our rates too high? How do they stack up against your other providers?
Again, the navel-gazing technique often comes into play and firms believe that “everyone is raising rates” post the depths of the recession. No need to sugarcoat it – four digits in an hourly billing rate is difficult unless it’s a “bet-the-farm” matter.
7. Will there be major changes to your org chart next year?
The best lawyers will ask this in a far more delicate manner: “What are your personal career goals – and how can we help support you in achieving them?”
8. Any chance you will be increasing the use of RFPs and procurement?
Smart lawyers ask whether they can be on a panel or approved list and avoid being on a list of commodity firms that get tapped to prepare responses to these (rather endless) proposals.
9. Is there anything you feel uncomfortable telling me directly about our service?
Now this one is interesting. If firms send in a third-party consultant to review the terms of the relationship, the in-house counsel almost always says something critically important as to how the relationship could improve. Don’t wait for the third-party interview – say it.
10. Did you see the Wall Street Journal article that claims our partners earn in excess of $2.5 million dollars in revenue?
Nah, just kidding. There isn’t a partner alive that’s putting that on the front burner to discuss (unless they are trying to recruit you). Joking aside, it makes sense for your team to follow how your firms do in the American Lawyer’s annual scorecard on revenue and profits. The Wall Street Journal assiduously reports the headlines each July. Your call as to whether to send a congratulatory plant – or ask for a rate decrease.
Here’s to a marvelous 2014!
This column is designed to provide corporate counsel with insights into what they should look for in contacts with outside counsel. Carolyn A. Sandano, the author of this month’s column, has led marketing efforts for several AMLaw 20 firms in the last several years. Please contact her for further information regarding outside counsel relationships at firstname.lastname@example.org.