In-House Counsel

Individual lawyers, making risky decisions, are the key to saving money on outside counsel

By Rees Morrison

All the techniques in the world for outside-counsel cost control make barely a dent unless the in-house lawyers who direct firms willingly set their shoulders to the yoke. The hard pulls of choosing not to retain counsel, but if so of then choosing a good but lesser-known and less costly firm, and even then of telling it to leave some stones unturned and that some work has too little value to be billed -- all of it falls on the responsible in-house lawyer.

You kid yourself, you putter at the periphery, to think depersonalized system changes like requiring prompt billing permit more effective cost management than do the individual decisions of lawyers: to coax out putative discounts, go through the charade of reviewing bills, crack down hard on copy charges, jawbone flush partners, and re-issue your outside-counsel guidelines. Those peripheral efforts are not where a general counsel will reap significant savings.

No, the unpleasant work of lowering legal fees demands vigilance, vigor and some violence to the accustomed routines of law firms made wealthy by cost-plus excesses. The analogy in military terms is boots on the ground, the grunts on the front line.

To reduce external legal costs, in-house lawyers have to take risks. Risks that their client ought to understand and accept; risks to the lawyer?s career when some decisions backfire. The lawyers who manage outside counsel have to make tough calls, some of which will look bad in retrospect. And they have to do consistently what they dislike to do at all ? exercise tough love on lawyers they need and like. That grass-roots discipline doesn?t happen steadily enough without massive shifts in culture, incentives, training, and tools.

Full post as published by Law Department Management on June 26, 2008 (boomark / email).