Should you use external counsel for your litigation? If you ever find yourself asking this question, then you’re not alone.
In the high-stress world of an in-house legal department, navigating legal challenges efficiently and effectively is paramount. Even with a robust in-house legal team, however, there are instances when the specialized expertise of outside litigation counsel is required.
In this post, we will examine the overall relationship with external counsel for litigation, from discerning the initial need to maintaining a productive working relationship.
Ultimately, your company needs an outside firm that is not only excellent at their job, but one that is carefully aligned with the company’s strategic interests.
Let’s dive in.
Using external counsel in litigation
There are several instances in which you may consider using outside counsel, such as when your firm finds itself embroiled in litigation that is either too vast or too specialized for the in-house professionals.
The decision to bring on external litigation support should be approached with the same rigor and deliberation as the company uses to select its board members, executives, and partners.
After all, this relationship is not merely transactional; it can profoundly impact the trajectory of significant legal disputes and, by extension, the company’s reputation and financial health.
Why would an in-house department need outside lawyers at all?
Today’s corporate legal landscape is characterized by a broader range of issues than ever before; from old-school contract disputes to thoroughly modern privacy breaches. And while many of these challenges can be competently navigated by an in-house legal team, there are distinct scenarios where the expertise, perspective, or resources of outside counsel become invaluable.
Let’s take a look at some common instances when a corporation might need to seek outside legal representation.
Specialized expertise
Let’s face it, the in-house legal team can’t know everything. Even if the legal department is carefully tailored to match the company’s typical legal needs, atypical legal events happen all the time. That’s why specialized lawyers are so important.
Let’s say, for example, that a California-based chip manufacturer is sued when a hacker located outside the United States steals and misuses data belonging to customers located in Atlanta who used the company’s website, which is hosted from Ohio. The jurisdictional issues alone are likely far outside the in-house team’s expertise, making this a perfect scenario for an outside hire.
Conflict of interest
At times, the company’s in-house team might have a potential or perceived conflict of interest in a case, making it prudent to bring in neutral third-party representation.
For example, an in-house attorney might have personal relationships or financial interests in a company that is a party to litigation or a transaction with the corporation.
Alternatively, the legal team might have previously represented another client (prior to joining the corporation) on a matter that is adverse to the corporation’s current interests.
In these instances, external counsel is the only way to go.
Resource limitations
If the in-house team is already occupied with other pressing legal matters or lacks the staff needed to handle a new, time-consuming case adequately, external counsel can provide the necessary bandwidth and support.
Geographical considerations
A local firm can be invaluable when the company is sued outside of one of its usual business locations. This is particularly true when local customs or specialized court rules make practice within that jurisdiction less than intuitive.
Crisis management
Sometimes, a company finds itself facing a public relations crisis, intertwined with legal implications.
In these situations, outside counsel with expertise in crisis management and public relations can save the day.
Recognizing these situations promptly and understanding the value external counsel can bring is the first step towards effectively leveraging external legal expertise.
Making the right decision at the right time can dramatically influence the outcome of legal disputes, saving both time and resources in the long run.
Factors to consider when choosing outside counsel
The selection of outside litigation counsel is a pivotal decision for corporations, as the quality and compatibility of representation can significantly sway the outcomes of bet-the-company legal matters.
Here are some of the key factors to consider when choosing an outside law firm:
Expertise and experience
The first thing to consider is the outside team’s depth of knowledge. Consider firms that have a strong foundation in the specific area of law pertinent to the case because their experience can offer nuanced insights that mean the difference between winning and losing.
Of course, you’ll also want to investigate the firm’s past performance with similar cases. Obviously, a history of favorable outcomes will tip the scales in your favor going forward.
Reputation in the legal community
As with any other client seeking a lawyer, recommendations from peers, other legal professionals, or industry groups can be the best indicator of the firm’s competence and integrity.
You’ll also want to review the outside firm’s past verdicts, settlements, and recognitions. This will give you invaluable insight into not only their competence but also their overall standing in the legal community.
Cost and billing structure
If you serve in a general counsel role, you know that in addition to protecting the company’s legal interests, it’s also your job to prevent overspending.
Take the time to understand a potential firm’s hourly rates, flat-fee options, or other alternative fee structures. It’s essential to ascertain whether these costs ultimately align with the potential value or stakes of the case.
Keep in mind too that those firms that offer clear, transparent billing practices will help you to avoid unexpected costs and/or fee disputes down the line.
Compatibility with corporate culture and strategy
Your company was built by individuals with specific values and missions. It’s vital to engage a firm that resonates with the corporation’s broader objectives, risk appetite, and ethical considerations.
You’ll also want to choose firms that match or complement the corporation’s preferred communication frequency, mediums, and protocols.
Consistent and open dialogue can enhance collaboration while the opposite can lead to chaotic relationships filled with doubt and resentment.
Resources and infrastructure
You’ll also want to consider the size, expertise, and composition of the firm’s team.
Access to a diverse set of legal professionals, from paralegals to seasoned attorneys, can enhance the breadth and depth of representation and can also align with your company’s internal goals and values surrounding diversity.
You should also consider whether the firm can match or exceed your department’s technological capabilities. In today’s digital age, a firm’s technological prowess, research tools, and software choices can streamline processes, facilitate communication, and enhance legal research and strategy.
Selecting the right outside counsel is much like forging a strategic partnership. It requires due diligence, clear communication of expectations, and a shared vision of the desired outcome.
By methodically evaluating the above factors, corporations can bolster their legal arsenal and approach litigation with confidence and clarity.
Building a healthy working relationship
Once you’ve selected your outside counsel team, the next (and arguably most important) step is to cultivate a productive and harmonious working relationship.
This is not merely a formal collaboration; it’s a dynamic partnership grounded in mutual respect, clarity, and shared objectives.
Let’s examine some key factors to nourish once the company’s relationship with outside counsel is in place.
Clearly defined roles and responsibilities
Both the in-house team and outside counsel should have a shared understanding of their respective roles in the litigation process.
This could range from who takes the lead in court to who handles the day-to-day communication with opposing counsel.
To facilitate this type of relationship, the lawyers should designate specific individuals from both the corporate side and the litigation firm as primary contacts for communications and decision-making.
Regular communication
Establish a routine for status updates, whether through weekly calls, emails, Zoom conferences, or in-house meetings.
Regular touchpoints ensure all parties are aligned and informed. It’s also important to determine the most efficient and preferred channels for communication. This might mean the use of dedicated software, email threads, or secure messaging platforms.
Feedback
The truth is, the relationship won’t be successful if the parties aren’t committed to getting (and staying) on the same page.
Encourage an environment where both the in-house team and outside counsel can freely offer feedback to enhance the collaborative process. Legal matters are highly stressful and often the first thing to go out the window is clear communication.
If you put a predefined mechanism in place for addressing and resolving these issues, you’re likely to maintain a highly productive relationship with your outside counsel.
Shared vision and strategy
This factor is critical yet it can be easily overlooked in the frenzy of responding to a newly filed lawsuit.
Before the first pleading is filed (if possible), your team should sit down without outside counsel to understand and agree upon the desired outcomes, potential risks, and overall strategy.
What to do if things aren’t working out
As with any dynamic partnership, the relationship between a corporation and its outside litigation counsel will inevitably evolve over time.
Poor performance, questionable ethical maneuvers, or bad communication can quickly sour the relationship and, in extreme cases, difficult decisions may need to be made.
Here are some of the things you should consider if it gets to a point where the relationship needs to be adjusted:
Honest reviews
Conduct regular reviews of the outside counsel’s performance against set expectations and objectives.
While it’s easy to forget about reviews when you’re embroiled in litigation, having a regular feedback schedule can help keep existing problems from escalating.
Re-evaluate communication
As cases progress or change in nature, the frequency and mode of communication may need to be adjusted.
A simple email might need to be elevated to weekly video meetings, for example. Don’t be afraid to demand changes that make management of outside counsel more effective and efficient for your in-house team.
Redefining roles and responsibilities
Depending on the phase of litigation, the roles of in-house and outside counsel might need to be redefined.
For instance, during the discovery phase, the outside counsel might take the lead, but during settlement negotiations, the in-house attorneys might be more involved.
As the in-house team, you’re in control. Be clear about your expectations and make sure they’re honored.
Budgetary adjustments
At some point in any litigation matter, money will become an issue. In any case, the scope of litigation can expand or contract, leading to changes in costs.
It’s crucial to reassess the budget regularly and, if necessary, renegotiate terms. Beyond just costs, evaluate the overall value the outside counsel brings to the table.
Are they providing strategic insights and guidance that go beyond mere representation or are they falling short in certain areas? If the latter, communicating that drop in perceived value and demand changes.
The relationship between an in-house team and outside counsel is one of the most important in the law. With effective communication from start to finish, outside counsel can make your in-house team shine in the eyes of your Board of Directors.
Conclusion
In conclusion, the decision to engage external litigation counsel is a critical one for any corporation. It’s a choice that can significantly impact the outcome of legal disputes, the company’s reputation, and its financial health.
Recognizing when to bring in outside expertise, whether due to specialized knowledge, conflict of interest, resource limitations, geographical considerations, or crisis management, is the first step in effectively leveraging external legal support.
When choosing outside counsel, factors such as expertise, reputation, cost, compatibility with corporate culture, and resources should be carefully considered. This selection process is akin to forging a strategic partnership, requiring diligence and clear communication of expectations.
Building a productive working relationship with external counsel involves clearly defined roles, regular communication, feedback mechanisms, and a shared vision and strategy. If issues arise, honest reviews, adjustments in communication, redefined roles, and budgetary reassessments should be considered to ensure the partnership remains effective.
In the end, a well-maintained relationship with external counsel can enhance the in-house team’s performance, making it a vital asset in navigating the complex legal landscape.
