An article published recently on ACC Docket.com and jointly authored by Scott Rosenberg and Dan Safran of LegalShift, LLC and Jim Wilber of Altman Weil, presented a handful of techniques for selecting and managing outside counsel.
With extensive experience in implementing law department strategy and operational efficiency improvement projects for legal departments, the trio has witnessed first-hand the challenges general counsels face when attempting to manage outside counsel spend effectively without sacrificing responsiveness and positive results.
Entitled “5 Techniques for Selecting and Managing Outside Counsel Without Upsetting the Applecart,” the article actually outlines a half-dozen techniques corporate law departments can use to ease the pain of selecting and managing outside counsel. Among their recommendations, the authors point to legal project management as a key practice.
“Legal project management (LPM) is composed of methods, practices, and toolsets to manage risk to the corporation and proactively track legal work. Transparency, real time status on matters, real time cost tracking, early issue escalation — all equate to the nirvana of no surprises!”
We couldn’t agree more. In fact, legal project management is a topic that we’ve explored on the Business of Law Blog in previous posts. The ongoing interest in the subject is an indication of its critical role in a corporate legal operation’s ability to function cost-effectively. As the authors of the ACC Docket article point out, the “methods, practices, and toolsets” they refer to include forming and maintaining a close relationship with outside firms, clearly communicated budgets and regular reporting on budgets and matters. Director of Strategic Consulting for LexisNexis CounselLink, Kris Satkunas, elaborates on these themes in a video presentation and a whitepaper. Providing additional insights gained from her own experience working with corporate law departments, Satkunas digs deeper into best practices for creating a process for managing outside law firms effectively.
Satkunas says that a properly structured vendor management process benefits corporate legal departments in several ways, including helping departments:
- Objectively and consistently measure law firm performance
- Integrate vendor management with expectations set forth in billing guidelines
- Strengthen relationships with law firms
- Select the best mix of law firms
- Deliver and demonstrate greater value to the organization
Advising that developing and implementing a vendor management system is a multi-step process, Satkunas says that the first step is to choose the metrics that will feed into the evaluation of outside firms, and ultimately, affect the law firm selection process. Often, the first metric considered is price-related, such as partner billing rates paid to each firm in the company’s panel. Because managing price is merely one objective of legal operations, a more comprehensive set of metrics is required – one that compares firms across all of the factors that are important when it comes to managing vendors. The challenge is to select metrics that will lead to an understanding of which firms meet expectations in terms of relevant variables such as price, matter cycle times, outcomes, adherence to billing guidelines, etc.
To arrive at a comprehensive, yet concise, set of metrics, says Satkunas, it can be useful to conduct discussions with in-house counsel. Asking what sets a trusted, “go-to” law firm apart from other firms often produces information about expectations that can be translated into metrics.
The latter advice echoes that of the ACC Docket article’s authors, who say that transparent collaborations between in-house and outside lawyers “almost always lead to clarity, better solutions, and buy-in. “