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October 2, 2012

In-House Counsel Give Outside Lawyers the ‘Real Deal’ on Value

At an _ 2012 Annual Meeting program that promised to offer “the real deal” from in-house counsel of powerhouse companies, the founding general counsel of Internet giant GoDaddy.com wondered aloud why there weren’t more rainmakers in the audience.

“Why isn’t every single partner of a law firm that’s attending this conference in this room right now, when there are this many in-house lawyers in here?” asked Christine Jones, who retired from the website-hosting company in May 2012 after a decade of service. Co-panelists at the ABA Section of Litigation program were Paula Boggs, a 10-year veteran as general counsel of Starbucks until she retired in April 2012; Kim Rivera, general counsel of healthcare provider DaVita Inc.; and Valeria Bailey, general counsel of longtime mapmaker Rand McNally, which has expanded its business to corporate navigation and transportation-planning services.

A Staffing Balancing Act

A challenge for the general counsel when they began their jobs was to determine the optimal balance of staffing between in-house and outside counsel. During Boggs’ first two years at the coffee company, she decided it would be cost-effective to hire more lawyers in-house to handle the company’s considerable commercial matters, while continuing to retain local law firms for its real estate work involving store locations. During her tenure, Boggs tripled the number of in-house lawyers.

When GoDaddy.com hired Jones, it was a startup with no in-house legal team. “When you’re the whole law department, you become an expert on everything,” she said, recalling that she even drafted and filed a software patent application early on.  “It took me exactly one patent application to figure out I needed to hire a patent lawyer in-house,” Jones said.

Although the 156-year-old Rand McNally may be seen as the cultural opposite of GoDaddy.com, it, too, had no legal department when Bailey came aboard in 2011. Instead, the company had many firms on retainer. As Bailey reviewed each one to determine whether the firm deserved to keep the company’s business, she found that few were responsive or demonstrated an understanding of the company’s needs.

Rivera drove the lesson home: “When there’s a change of general counsel at a company, you can be sure that the first thing they’re going to do is review the entire panel of law firms that are providing services. They’re going to figure out who’s providing value and who isn’t, who they want to work with, and who’s good for the organization and who isn’t.”

Get to the Point

That means law firm partners would be wise to build contacts early on with prospective and existing in-house clients and maintain their relationships.

“Tell me why I should hire you. Help me help you,” Jones advised. She said that a lawyer who wants a company’s business should give simple yet specific reasons why the firm can bring value to the client.

“Don’t write me a 10-page memo,” Jones said. “Send me two lines.”

The panelists offered cautions about long-winded, impractical legal analyses and other hallmarks of traditional law firm culture, which can clash with more aggressive and fast-paced attitudes in the top echelon of a corporation. “I don’t have time for 10-page memos,” Bailey said. “I don’t have time for the lawyer not making a judgment call. I need practical answers.”

Understanding Your Business

“What you’re looking for in your external counsel are people who get it, who get your business, who get what you’re trying to accomplish and know how to build a partnership with you,” Rivera said.

For example, Boggs suggested that many corporate legal departments would find it helpful for their outside law firms to offer on-site CLE sessions on current legal topics. This “gives an opportunity to show you get it, that you can add value to the company,” she said.

“Walk the walk, show that you get it,” Boggs advised. By gaining insight into the client’s issues in this manner, “not only do you learn about the business, but you also cement your relationship with the in-house counsel,” she said.

Billing Practices

Panelists noted that relationships between outside and in-house counsel often come to a head when it’s time to review the bills. Bailey said that bills lacking in detail are especially frustrating.

“Work on file — what file?” Bailey exclaimed, noting that she has little time to follow up with the outside lawyer but nevertheless needs to. Bailey added that law firms need to send out their bills as quickly as possible, since late bills interfere with timely corporate financial reporting.

A lawyer’s ability to connect with people in the corporate world — what several panelists called “empathy” — is crucial for his or her success, panelists said.

“Lawyers who have that, do better,” Rivera said. They do better at in-house practice, they do better in law firms because, fundamentally, people want to work with people who they like and enjoy.”

Learn More About:  Litigation