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Effectively engaging with law firms is a priority for in-house counsel to enable them to provide the best outcome for their business. With the rise of alternative fee arrangements (AFA) and other disruptive services, the issue has become even more topical for in-house lawyers seeking to render processes as efficient and effective as possible. On 24 March 2021 ������Ƶ hosted an event in which over 70 legal professionals met to discuss how in-house counsel can enhance their relationship with law firms.

We were joined by Toby McCrindle, General Counsel at , a travel technology company, Will Long, Client Partnership Director at , a law firm relationship management platform, and Maria Johnston, Director at . Our panellists shared their personal experiences and gave us tips on best practice.

Emma Dickin, head of In-House Strategy at ������Ƶ, asked our expert panel questions relating to cost control and aligning ‘value’ to the needs of the legal department and wider organisation.

Participants also provided their own insight into how they are managing these issues through polls and were invited to submit questions under Chatham House rules.

Fee arrangements—Transparency, Predictability and Certainty

Our initial poll showed that legal departments are predominantly using fixed fees as an alternative fee arrangement (AFA), followed by capped fees. Will told us the poll mirrored what he’s seeing in the market—a shift to alternative fee structures. With current market uncertainty, predictability and cost certainty become the order of the day.

Toby felt that transparency is key and that constant conversations before and during the work about costs are necessary.

Over 40% of those that responded to the poll told us they were not satisfied with the transparency and communication around costs from law firms. Thankfully, out panellists provided us with tips to increase Transparency, Predictability and Certainty in costs:

• engage constantly with the law firm—to ensure transparency, discuss what issues may come in advance and provide feedback throughout, not just after the deal has been completed. In this way, there should be no surprises at the end of the project
• scope matters precisely—discuss what you want from a law firm and what they are offering with precision. What appears to be a ‘fixed fee’ may have lots of caveats so it doesn’t really deliver the predictability wanted. Ask the firm how it arrived at its fee estimate
• be prescriptive—tell your firm exactly what you want. This will save time for you later, ensuring you don’t have to redo the work and ensuring you feel the price paid is fair

   

  What ‘value’ should external counsel look for in a firm?

  Nearly all our poll participants told us that they measured value provided by their law firms through outcomes and quality of service. However, our panellists highlighted that the concept of value, particularly in the last year, has changed. It is a given that top firms should provide sound legal advice but Maria pointed out that what advice firms provide may differ.

  For example, are you seeking an academic response or do you need a more practical answer?

  You should also consider how they are going to provide these services—how will their staff be supported throughout? Are they an inclusive workspace?

  Our panellists provided us with top tips to ensure a law firm is right for you:

• prior to engaging them, provide firms with a standard briefing document on your business and your priorities
• invest time to sit in team meetings with the law firm—in this way, it is easier for the general counsel to instruct and therefore offer a fair price
• check whether their values align with those of your firm and strive to determine whether they live the values they claim
• in relation to ongoing relationship management, ensure feedback is provided throughout—foster an environment in which informal feedback is valued and try to capture it so it can be acted upon
• remember, value is subjective—a law firm recommended by a friend may not provide the value your business needs. Use your broader network and leverage the experience of others

Starting from scratch—how do I go about procuring external legal advice in a sector that's new to me?

• use your broader network—pick up the phone or email peers and ask for insight
• visit LexisPSL’s subtopics on and for a host of Practice Notes, Precedents and more covering essential information
• consider using law firm relationship management services, such as

In summary…

We asked our panellists for their key takeaways:

Will: It all boils down to communication. Counsel should strive to communicate more effectively with law firms. The onus is on them as the buyers of legal services to drive this candour.

Maria: Let the external team in—engage with them by bringing them to meetings and sharing your challenges. You may find people in the firm who have shared your experience as a general counsel and are able to understand your concerns more fully

Toby: Invest time to figure out your own values before seeing what you want from the law firms.

Join us on the  for further discussion on this and other topics relevant for in-house counsel. This online forum is an extension of Flying Solo—a forum for sole in-house lawyers or those in small teams. It is run by a committee of in-house lawyers and facilitated by ������Ƶ, Radius Law and F-Lex Legal.

Additional reading:

“Trust and Transparency: Towards or away from genuine trusted advisors” - an analysis of the relationship between in-house legal teams and large law firms.

Upcoming Senior Counsel event

Making the intangible, tangible: How legal teams are approaching value creation

Date: 28 April

Time: 10 am – 10:45 am

Join us on 24 March 2021 to discover how discuss how in-house counsel are approaching value creation through Chatham House peer discussion and sharing results from a benchmarking study of over 300 UK legal teams.