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July 2007
Survey Shows Corporations Increasingly Unhappy with Outside Lawyers
By Douglas E. Motzenbecker, Litigation News Editor-in-Chief, and Joseph P. Beckman Litigation News Associate Editor
Panelists at Section Annual Conference discuss solutions
Lawyers interested in getting new clients and keeping existing ones take note: A 2006 survey conducted by the American Corporate Counsel Association (ACCA) reports that nearly 70 percent of in-house attorneys are dissatisfied with the outside law firms they use, and one out of three corporate clients fired at least one of its law firms during the past year. ACCA also notes that satisfaction levels dropped significantly from its preceding survey.
At the Section of Litigation’s Annual Conference in San Antonio in April, four in-house attorneys presented a program, “Litigation: Are You Managing the Process or Is It Managing You?” The panelists discussed the dismal results of the ACCA survey and ways that outside counsel might improve their service to, and thus their standing with, corporate clients.
Do not countenance surprises! Neither accept them from outside counsel nor be the reason for them happening to your client.
“If 70 percent of Fortune 1000 companies are dissatisfied, this creates opportunities for law firms who are customer-driven and savvy,” says Horace W. Jordan Jr., Lake Forest, IL, Cochair of the Section’s Corporate Counsel Committee, who moderated the program.
The panelists explained that corporate clients hire firms who have proven expertise in a given area and who can staff a case with a team of qualified attorneys. They said corporate counsel do carefully review a firm’s website and conduct other due diligence before retaining a firm. They emphasized it is equally important that outside counsel learn the client’s corporate culture and visit the client periodically.
The program’s written materials included a list of top 10 rules for dealing with outside counsel. The number 1 rule: “Do not countenance surprises! Neither accept them from outside counsel nor be the reason for them happening to your client.” The panelists repeated this point several times, adding that outside attorneys must likewise avoid needlessly creating panic for in-house counterparts. All agreed, for example, that it can be fatal to suddenly change a long-held assessment of liability or damages, or to request substantial additional settlement authority on the eve of trial.
The panelists noted that counsel must devise an early and sound litigation strategy that summarizes the strengths and weaknesses of the case, and that outside counsel are expected to submit a budget of defense costs, even if it makes only rough estimates. They said law firms hurt their credibility when they claim to be unable to realistically predict litigation costs or fail to stay within their budgets. They agreed, moreover, that a firm’s bills will be a firm’s single-best marketing tool.
In-house attorneys “are subject to strong and stringent budgets,” says Jordan, who warns that a firm that “does not value and keep on top of budget will not be around the next year.” For the same reasons, it is important for law firms to provide at least some services for free: “Do something without billing the client for it,” says Jordan.
The panelists stressed that communication is key [PDF]. Not only must outside counsel promptly return all calls and email but at the same time must avoid barraging clients with a blizzard of mail. Counsel should provide only information that is relevant, material, and informative. Lengthy opinions and reports should be digested, and copies of only the most important documents produced in discovery should be provided.
The panelists noted that although outside attorneys will typically deal with one or two contact persons within a corporation, they must remember that the contacts must report to their own supervisors. The panelists agreed that it is essential for outside counsel to help the contacts manage their own supervisors’ expectations, and that they speak with the contact in advance of making any major statements about the case to the contact’s supervisor.
Written materials from the seminar include the caveat that outside counsel must “understand [their] place in the universe” and be aware that in-house counterparts are concerned with many other projects. In summary, as the course materials state: “Don’t forget your role as counselor… Be concise and logical, and be right most of the time, and you will find yourself in the role of trusted counsel, not just the hired gun.”
