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CCCA61_018,019.qxd:CCCA_V1No2_Dept-CourtLeg-V1.qxd 02/07/2008 04:49 PM Page 18 Outside Counsel Making the connection Three best practices when dealing with outside counsel. utside counsel should make your Olife easier, better, more efficient and filled with fewer surprises.Moreover,they must perform excellent legal services that match the business needs of the ultimate client: the corporation and its investors. To make the relationship smoother, there are three fundamental questions that you and outside counsel should ask.What’s the exposure, and how can it be reduced? What are the implications for your ongo- ing business? What is it going to cost? Being prepared to answer these ques- tions increases the likelihood that your outside counsel will have a fighting chance to align the company’s legal interest with its business interests.These three questions form the fundamental guideline for budg- eting and risk management, and will help contextualize the matter as it relates to the total legal department caseload. Once the matter starts, it is essential that you communicate to outside counsel who should receive updates on your finances is as much art as it is science. By you tell your outside counsel what they existing matters.Too often, outside coun- having a candid conversation with outside need to do to match the financial expec- sel forget or neglect to (a)set billing stan- counsel on what is acceptable from a tations set forth between you and your dards, (b)identify how often and in what budget perspective, there will be less ten- CFO at the start of a matter,and that both manner communications should happen, sion in all expense-related conversations. parties are aligned in their understanding and (c)make sure that the appropriate par- At the end of the year, law firms do of that expectation. ties know one another. their best to get their final bills out, and equally importantly, they try to collect on Communication Billing standards as many bills as possible. When the law Understanding expectations permeates As in-house counsel, you have specific firm bills late, or bills far above the antici- every aspect of the inside-outside rela- needs that must be met to guarantee the pated fee, then your company is suddenly tionship. In-house counsel sometimes fail best possible working relationship with faced with unexpected expenses that can to explain the significance of a matter to your internal clients: CFO, CEO and cor- damage earnings.Tell your outside counsel their outside counsel. If you are the asso- porate controller. Too often, outside what is an acceptable range over or under ciate general counsel in charge of all liti- counsel presume that any conversations budget during any given financial period gation, you might have 40 ongoing mat- regarding billing standards are a thinly (is it 10%, 5%?). If the cost of a matter is ters and might only spend 30 minutes a veiled attack on fees. In practical terms $500,000, you may want to pay those fees week on a matter on which outside coun- FIRST LIGHT IMAGES for both publicly traded and privately all in one quarter, or evenly distributed on sel is spending 30 hours a week. held companies, managing the quarterly a monthly or bimonthly basis. Make sure If you successfully tell your outside 18 CCCA Canadian Corporate Counsel Association SPRING 2008