GCs Vent Their Frustrations About Outside Counsel

GCs Vent Their Frustrations About Outside Counsel
Petra Pasternak
The Recorder
May 23, 2006

Richard Gray is not fond of surprises.

Not the kind that arrive when Gray, the Claria Corp. general counsel, is on a conference call with the company's entire board of directors and his outside counsel brings up a new legal requirement or a potential problem for the first time.

Caught off guard, Gray said he once had to scramble to field the initial questions and save what could have turned into a precarious situation by telling his bosses he would look into the matter and present it at a later time. "That's not a warm and fuzzy feeling," he said. "It worked out fine, but I should never be put in that position."

Surprises are just one thing outside counsel are well-advised to keep out of their repertoire if they want to earn a GC's love.

According to a study published this year by BTI Consulting Group Inc., a Massachusetts-based legal consulting firm, only about 30 percent of GCs nationwide were satisfied with their primary law firms in 2005, down from 43.5 percent the previous year. The picture was a little rosier in Northern California, but satisfaction still dropped from 60.2 percent in 2004 to 56.8 percent last year.

BTI attributes the decline to three main factors: law firms' failure to keep up with a GC's changing needs, an inability to articulate the value of services delivered and poor communication. The survey included more than 1,000 interviews from corporate counsel at large and Fortune 1000 companies.

Fed up GCs, squeezed by budget constraints and pressure from boards of directors, are reacting to shoddy work by outside counsel by demoting and replacing their primary law firms and spreading the wealth among a larger network of secondary firms.

Nothing is more dangerous than a client who's left to assume a lawyer is playing golf or, worse, napping on their dime. So it's always a good idea to regularly gauge client satisfaction and keep aware of the following pet peeves that have peppered GCs' legal careers for decades:

What does Outsourcing Really Do?

Another interesting outsourcing focused piece - Outsourcing, Schmoutsourcing! Out Is Over, from the author of "The World is Flat", Thomas Friedman.
In this piece he focuses on the increased possibilities due to globalization. Things we take for granted, like going online and buying something which is delivered to us in 2 days. Do we ever give a thought as to where the product is made, where the company whom you are buying the product from is based, who is the distributor who enables you to have the product in 2 days?
The entire process is completely transparent to the end user. That is the power of technology combined with the global economy.
Another very important point he ends with in the article, is the reduction of world poverty. People inherently are not altruistic. People in developed nations are not interested in eradicating world poverty at the cost of their comforts (for which they have worked long and hard for) or promoting dependent laziness(as has been the case with many welfare states.)
What globalization provides is an opportunity for the less developed nations to catch up. The money is not being provided to them for free. There is a price - its called hard work.
The article is available to Times Select subscribers but I am taking the liberty to quote from it.
"A short time later I was interviewing Katie Jacobs Stanton, a senior product manager at Google, and Krishna Bharat, founder of Google's India lab. They told me that Google had just launched Google Finance, but what was interesting was that Google Finance was entirely conceived by the Google team in India and then Google engineers from around the world fed into that team — rather than the project's being driven by Google headquarters in Silicon Valley...

If more countries can get just a few basic things right — enough telecom and bandwidth so their people can get connected; steadily improving education; decent, corruption-free economic governance; and the rule of law — and we can find more sources of clean energy, there is every reason for optimism that we could see even faster global growth in this century, with many more people lifted out of poverty. "

Tariq Akbar

Virtual Help: An Outsourcing Relationship With a Virtual Assistant Can Complete Your Team

by Edward Poll
April 2006

Lawyers function best as members of a team. No lawyer can do everything. A paralegal or administrative assistant whose qualifications and skills meet your needs will effectively extend the reach and quality of your practice. You can hire such a person to work full time, on your payroll. However, technology increasingly affords an efficient alternative: the VA, or virtual assistant.

VA Relationship
VAs are paralegals or other administrative specialists who work offsite and online, creating work product to your specifications and tailored to your practice. They represent an extension of the outsourcing that lawyers and law firms have done for years. Once that outsourcing was limited to mailing and records storage services. More recently it has come to include transcription of voice files for depositions, accounting support for billing, data entry, litigation support graphics, and legal research. Such outsourced services are transparent to the client – to such an extent that they now can be performed a continent away.

The relationship with a virtual assistant is complex and rewarding. As an independent business owner, the VA is neither employee nor subordinate. VAs more closely resemble an accountant or any other business consultant with whom the lawyer has an ongoing, collaborative relationship. They become familiar with your practice and attuned to your business needs as much as any service provider engaged for a substantial length of time.

VA Selection
An excellent example of a virtual assistant practice is The Relief, a Tacoma, Washington-based firm that delivers remote administrative and legal assistant/paralegal support services to solo and small practice professionals. Danielle Keister, principal of The Relief, graciously shared with me her insights on what makes the VA relationship work from the service provider’s perspective. She recommends taking these factors into account when engaging a VA:

Is there an informative, well constructed Web site, as evidence that the VA has the technical skill and sophistication to conduct an effective online business relationship?
Conduct a personal consultation, face to face or by phone. It is not appropriate to ask for resumes or for work history beyond professional references, but the VA should be willing to provide information on experience and qualifications.
Request a business track record. Look for a VA who has been successfully in business for at least three years, and one who is actually IN business (not just working part time or providing an incomplete service package).
Does the VA provide a realistic cost structure? Inappropriately low rates can signal a lack of business sense and indicate a practice that is not profitable (and won’t be around for long). Because you want to rely on the VA long-term, you want assurance that their business is viable. Proper VA rates will average between $30 and $65 per hour. And if the work provided is paralegal in nature, don’t forget that this work can be billable client hours that you can mark up at a profit.
VA Qualifications
Beyond these business considerations, think through the professional qualifications that you want from the VA. If you’re seeking paralegal services, you should expect a certificate of completion from an accredited educational institution. Do your own research on that institution and don’t rely blindly on “ABA-approved” status. Make sure your VA paralegal can demonstrate knowledge of local rules regarding court and civil procedure, in addition to practical insights pertinent to your practice. Other relevant skills include the ability to:

Organize files and chronologies
Prepare documents for summons, complaints, answers, motions and other proceedings
Conduct investigations and summarize depositions
Perform legal research
Coordinate with outside vendors for trial preparation
Create and maintain client files.
A virtual assistant should be able to conduct all these activities electronically from a remote location. That assumes and requires compatible email, word processing, document management and database capabilities. If your word processing system is WordPerfect, engaging a VA who works only in Word can complicate and not simplify your life. The same is true for other software products: Excel versus Lotus, Quicken versus QuickBooks. There are of course other document exchange tools – f ax, overnight courier, even surface mail. But effective electronic integration is a must.

VA Versus Employee
One of the most important considerations about the outsourced VA relationship is to ensure that it is in fact an engagement of an independent contractor. Do not make the mistake of thinking that every part-time or offsite paralegal or legal assistant qualifies. The IRS has very clear guidelines to determine whether a hired individual is an independent contractor or an employee for federal tax purposes. An employee is subject to the will and control of the employer not only as to what shall be done, but as to how it shall be done – an employee does not have independent control of the work process. By contrast, The Relief, as a true independent contractor, states on its Web site: “Our expertise is based on over 20 ears top-level administrative experience and training. Our legal support services for attorneys and investigators are based on paralegal and investigative training and experience.” If you engage a service provider who cannot provide the same assurance, they likely are not a true VA.

VA Versus Temp
Note also that a VA relationship is different from that with a temporary employment agency. Temps can be a viable solution to small firm or solo personnel needs, but if you need anything other than the most basic clerical assistance it would be wise to consider and select a temporary on a long-term basis, known as “temp to perm.” This option accommodates extended projects and protracted litigation, but should only be pursued with a temporary agency that specializes in temporary legal personnel.

The VA Advantage
Virtual assistants are an outsourcing strategy that can give lawyers the best of all solutions to the need for help. You get a professional team member, selected to your criteria, attuned to the business and professional needs of your practice. You are relieved of the cost (and potential liability) that in-house staff can represent. Best of all, you have an efficient solution to “The Business of Law”®, one that frees you to do the client representation and development work that you want to do. As Ms. Keister remarked to me, “ When I first started, I wondered if attorneys were so above the crowd that concerns like working at a profit, operating efficiently, finding ideal clients and dealing with problem ones were just too petty and far beneath them. Since then, I’ve seen that they have the same marketing and operating issues that any other business has.” Help from a knowledgeable virtual assistant can be a major step in resolving them.

Should You Bring Litigation In-House?

Should You Bring Litigation In-House?
Blake Guy
Legal Times
May 5, 2006


At first, the term "in-house litigation" seems rife with contradiction. The legal departments of most companies simply are not set up to handle litigation without significant help from outside counsel.

Of course, companies should consider a number of factors -- company size, the nature and scope of the current litigation docket, available budget -- before they decide whether some or all of their litigation will be handled in-house.

At BearingPoint we have developed an approach that breaks with the traditional role of an in-house litigation team. Drawing upon my experiences since joining the BearingPoint litigation team, in December 2003, I can offer a sort of preliminary guide for companies that may be considering bringing some portion of their litigation docket in-house. It is as much a reflection on lessons learned as it is a set of practical recommendations to be considered before companies make such a move.

SELECTING A MODEL

The work of an in-house litigation team can cover a number of different areas. Generally, however, the litigation model for most companies will fall into one of three categories: management of outside counsel, handling all litigation in-house or a combination of the first two (a "hybrid" model).

The first step in deciding whether to move all or part of a company's litigation in-house is to define which model will be used. At BearingPoint we use what I would call a hybrid litigation model. For example, the majority of single-plaintiff employment disputes are handled in-house with minimal or no assistance from outside counsel.

Similarly, commercial disputes that fall below a flexible threshold in terms of scope and potential liability are handled in-house. But in cases that are clearly beyond the available resources or expertise of the litigation team, we turn to outside counsel, and one of the company's litigators will manage, direct and assist with their approach.

Defining which model will be used helps to establish expectations, set objectives and attract the right talent. Whatever the model, the company must commit to it (in other words, invest in the model) and identify what it expects in return for its investment. Once the model has been determined, the next step is to consider what resources will be available to the team.

RESOURCES

How will the litigation team be staffed? Of course, the quality of an in-house litigation team will be heavily influenced by compensation. In order to attract litigators who will produce results comparable to those obtained by outside counsel, compensation packages need to be established that, although below market rates for private law firms, are sufficiently generous to lure senior associates away from the comfort and stability of private practice.

Though they are increasingly more difficult to find, the focus should be on locating and recruiting attorneys who have tried cases and negotiated settlements in cases otherwise destined for trial. Rather than concentrating on attorneys who have toiled for years in the litigation departments of large law firms with little or no practical trial experience, try to staff the in-house litigation team with trial attorneys who have had meaningful trial and negotiation experience.

Trial attorneys will generally have a better feel for how the facts, as well as a company's explanation of those facts, will play out in a courtroom. Consequently, an experienced trial attorney will better serve the company's need to quickly assess and reassess the advantages and disadvantages of taking a case to trial.

In addition, it's important to invest in high-quality paralegals and administrative support. In order to properly staff a case, even a case that can be handled by a single in-house attorney, paralegal support is essential. In fact, the higher the quality of the paralegal staff, the more likely it is the in-house litigator can take on additional litigation matters without a decline in the manner in which he handles each case. In a department where in-house litigators are truly expected to serve as lead counsel on their cases, there should be one paralegal for every two, or maybe three, in-house litigators.

Of course, technology can play a huge role in allowing in-house litigators to manage their docket without the vast (and expensive) resources available at most law firms. In particular, there are two technology resources that I believe are non-negotiable essentials. First, the company must invest in commercially available software that can be used to collect, store, preserve, organize, search and produce documentation.

Without such an investment, the nature, size and number of cases that can be handled in-house will be vastly reduced. Second, the company must make available to its litigation team the full panoply of research and data available through Lexis or Westlaw. Without this basic but critical resource, a company forces its litigation team to compete on an uneven playing field.

USING OUTSIDE COUNSEL?

Although the motivation for handling litigation matters in-house is often related to growth in expenditures on outside counsel and other vendors, it would be foolhardy to think that outside counsel can be dispensed with altogether. In fact, outside counsel can play a number of roles for companies that elect to handle more litigation matters in-house.

First, there will always be a need to associate with local counsel in jurisdictions where the responsible in-house litigator is not licensed. In this scenario, local counsel should be viewed as a useful part of the litigation team. In fact, local counsel should be selected based on their knowledge and familiarity with the court, the judge, the opposing counsel, the opposing party and the jury pool. Furthermore, in the event of unexpected developments, local counsel will need to stay familiar with the case in order to assume first-chair responsibilities if necessary.

Second, outside counsel can be used in a second-chair capacity. Under this approach, outside counsel is not responsible for directing how a case is handled but is responsible for assisting in-house counsel in executing the specific game plan. The in-house litigator remains responsible for taking and defending depositions, preparing or responding to motions, and serving as lead counsel for negotiations or the trial.

Third, in those instances where the resources of the in-house litigation team are lacking, outside counsel can be used in an economically smart way. For example, some litigation matters involve extensive paralegal support but can otherwise be handled by a single litigation attorney. Other litigation matters involve voluminous document review and processing, but once that is complete, one attorney can do most of the rest of the work.

In instances such as these, it is helpful to establish relationships with outside counsel that will allow an in-house litigator to lean on the raw manpower that outside counsel can usually provide with very little advance notice.

Finally, no in-house litigation team, whether it uses the hybrid model or not, can reasonably expect to handle all litigation matters that come through the door. Most in-house teams will never match the resources, size and flexibility of outside counsel.

Not only will outside counsel remain necessary to handle overflow litigation, but a number of dispute categories should always go to outside counsel. These categories include "bet the company" litigation, class actions, significant intellectual property disputes, criminal matters, grand jury subpoenas, Securities and Exchange Commission issues and disputes with current or former executives.

THE BENEFITS

Handling the right litigation matters in-house can save a company money that otherwise would be spent on outside counsel. It also removes one of the common settlement leverage points often raised by opposing counsel.

For example, a company may decide it is going to handle most or all of its employment litigation in-house. Alternatively, it may decide it is going to handle in-house all commercial litigation with exposure under $1 million. In the traditional management model, these are the types of cases that can quickly start to become too small to defend.

As the fees paid to outside counsel start to approach the amount of the underlying claim, it is only natural to question whether the cost of defense is (or ever was) justified. By assigning just three or four of these cases each year to an in-house litigator, assuming that the results will be similar to what outside counsel would achieve, a company will more than offset the investment it makes in each of its litigators.

In settlement negotiations, the less exposure there is to the company, the more likely the other side will emphasize the cost (such as outside-counsel fees) that the company will still have to incur before it can get rid of the case. Handling certain litigation matters in-house can minimize or eliminate this pressure during the negotiation process, and the company can make a decision more focused on the anticipated outcome than the cost of obtaining it.

More than once, in an attempt to exploit the expense of defending against an employment lawsuit, I have been reminded by opposing counsel that, either by statute or agreement, "My client will incur no attorneys fees in this matter."

It is always nice to be in a position to reply, "That's great. Neither will mine."

Blake Guy is an associate corporate counsel with BearingPoint Inc., based in McLean, Va. BearingPoint is a global management consulting, systems integration, and managed services company.