A roundtable discussion: Bridging the gap between in-house and outside counsel

David G. Susler, National Material, L.P.

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Obviously, integrity has to be the guidepost, and legality has to be the guidepost, but your clients have to think you’re on the team or they won’t respect you. And that means there is an array of places you have to be willing to go. Disclose what the risks are, but be a player consistent with your other obligations.

What role do the various and growing number of ”commercial awards programs” have on their selection of outside law firms?

Findlay: I can only speak for myself, but I would say that those sorts of rankings have virtually no impact on our selection of outside law firms. I get these gigantic boxes that are very heavy and I am hopeful that there will be something fun inside. But it’s x-y-z’s list to the best law firms. I just don’t find that type of information very useful …

Anybody who is trying that hard is probably not as capable as someone who is not trying so hard to get that kind of recognition.

Bouldon: I’ll be the outlier here. I have relied on documents, such as Chambers and Westlaw has an online service, in the past. I think they work best in conjunction with word-of-mouth and in conjunction with the experiences you may have had with other attorneys at that firm. I think they can be a component of a successful selection process. I don’t know that they can stand alone.

Doohan: I would agree. It’s kind of a double-check after I’ve already searched out and made a decision. But I do not choose law firms, I choose lawyers. I check it for a particular lawyer. There can be such a huge variation in talent at a particular law firm.

Susler: I’ll primarily rely on word-of-mouth recommendations from people I know and trust. I will go to Martindale-Hubbell online, they’ve been changing that and beefing that up too, but it’s a supplement. But the other ones, like who’s who in law today, don’t really mean a thing to me.

Findlay: Those publications ought to become less relevant as companies take on this convergence model of law firms. The traditional model now is you try to have a very small number of law firms who you know very well and they know you very well. If you have a problem, usually you’re going to have a certain presumption that you will go to your panel firm.

If one of your panel firms doesn’t handle that kind of matter, I think the first place you would want to go is one of your panel firms and they will have an honest conversation saying, ”We just don’t do that but somebody who is extremely good in that unique area is X.”

Bouldon: We have just done that. I joined my company less than a year ago and they had a selection process underway when I joined. That’s exactly what they were trying to do, very much narrow the number of outside firms.

One thing that I think outside firms may overlook is their relationship with insurance carriers if they are providing services that are covered by insurance. Many times I’ve called our carriers and said, ”Okay, who do you hear from? Which firms do you hear about? When you assign firm A to do work, who do you get the most calls about saying they were terrific and they did a really great job?”

A lot of the carriers will tell you, ”We always hear good things when we assign a file to this firm.” I’ve had outstanding results doing that because I thought about it and insurance firms assign cases basically every day of the week. If anything goes wrong, I’m sure they’re hearing about it. If things go well, they’re hearing about that also …

How do you decide which firms to go with? How does that process go?

Bouldon: If you are trying to have a model wherein you have a very small number of firms that are basically servicing most of the company’s needs there are a couple things that it helps to look at.

Number one: the relationship partner. Which partner will manage the relationship? If you have a strong relationship partner, it makes the life and the job of the general counsel so much easier. A really, really strong relationship manager is really going to see to it that the very best people are put on your matters. If you have any questions or concerns, they will be on top of that right away. They really become your outside advocate within the law firm because they are the ones most charged with managing the relationship.

The other thing I would suggest is that general counsel focus on the areas that generate the most exposure at their company. We ended up selecting a general service firm, and I’ve worked with companies that have done that in the past.

Some of the drivers are considerations of where you’re going to have the most activity and exposure, because if you’re narrowing your number of firms down, the idea that the firms that you select will be experts or rated top in every category, that’s probably not going to be the case. They are probably going to have core strengths for which they are nationally recognized or locally recognized, and hopefully those match up with the needs of your business.

Von Hoene: We do a very detailed RFP process every three years in which we select our preferred firms. It’s an exhaustive process. An enormous amount of information is requested. We interview the firms. Up until the last RFP I personally interviewed every firm that went through. On this one, I just couldn’t because of logistical matters. But somebody who is an officer of the company, or two officers of the company, will interview the firms.

We move out about a quarter of the firms in each RFP process, not by design, but just because we have additional firms come in who appear to provide superior value. What we’re trying to get to is the point where we don’t have to, except in very rare circumstances, inquire about a lawyer that we don’t know about. We have a relationship that is a continuum of the legal practice in the company.

We have about 30 firms. There are very few cases — and you have to have a legal staff, lawyers in-house, who are committed to this concept — but there are very few cases we have where we don’t know who the right lawyers are. Then we go to the firms and say, ”This is what we need.”

Doohan: I probably have about 30 firms. But I am not a proponent of the convergence model, although maybe I am practicing it. We have mining issues and health administration issues. Very rarely will that expertise be found also in a firm that knows consumer goods and branding. By necessity, we spread the work around, and we pick the lawyers that we want to do the work. Litigation, we have them kind of scattered across the country because you never quite know where you will be sued.

Findlay: When I arrived at Aon, I asked our head of operations of the law department to give me a list of all the firms we’ve written a check to in the last year, and the number of firms that showed up on this list was more than 500, which was all the more interesting because we only had about 700 matters. We were really spreading the work out very thinly.

We really went very aggressively in the direction of convergence. We put out an RFP-like document. We sent it to a lot of firms that we’d already used and sent it to other firms we thought would be the kind of firms we would want to work with. And, just as Bill said, we basically ranked the number of firms on things like client service, what their willingness is to enter into good rate deals and rate discounts, innovative billing arrangements, diversity.

And then we interviewed a subset of all the firms that responded to the RFP and emerged with, originally, it was about 20 firms. We now kind of tiered it so we have about 12 core firms and a number of others firms we use as well. That doesn’t mean you never go outside the list, because sometimes a problem will come up that none of your firms has an expertise [in]. We really have tried to concentrate the work on our core firms. The numbers for 2007, if you look at our top 15 firms — that’s about 80, 85 percent of our work …

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