Chapter § 1.05 Retaining Outside Counsel

• Jurisdiction: United States
• Publication year: 2020

§ 1.05 Retaining Outside Counsel

[1] Preferred Counsel

With regard to hiring and retaining outside counsel, companies are beginning to place less emphasis on trying to retain the cheapest firm. Instead, they opt to retain preferred firms with proven track records. These firms may not guarantee the lowest rates on each case, but the incentive to offer generally discounted prices exists due to the long-term relationship and the opportunities for work that come along with it. Also, working with the same firms breeds mutual familiarity. Each knows and understands the other’s expectations, so the company does not have to spend time educating the firm on internal processes and procedures. Billing issues are fewer since the firm knows how the company wants to be billed, and the company benefits from the consistency and lack of surprises that may not be the case with an unfamiliar firm.

Working with preferred counsel also provides peace of mind for in-house counsel. The lasting relationship builds trust between the two parties, and the relationship of trust is often more important than the rates. “In-house counsel want to go to people that they trust are going to be completely accurate on their bills. If [in-house counsel] believes there is a problem, then they know that [preferred counsel are] willing to bring that bill down and make some adjustments.”⁴³ At the end of the day, the higher billable rate may wind up being a better value because of that trusted relationship. However, how a firm behaves toward its client regarding rates does affect the trust and length of the relationship. Preferred counsel are often selected through a request for proposal (”RFP”) process.

[2] Request for Proposal for Specific Cases

Some companies use a robust bidding process or request for proposal (“RFP”) process to retain outside counsel for specific cases; preferred counsel are sometimes included in the RFP process along with firms that are not on the preferred counsel list. Driving the RFP thinking is an internal view at companies that “much of how an in-house counsel department runs itself should be dependent on how the company is run.”⁴⁴ If a company has a philosophy of soliciting bids for projects to cut costs and increase efficiency, then in-house counsel should employ the same process for hiring legal counsel to handle certain cases.

Using an RFP process to hire counsel for specific cases is sometimes incompatible with the benefits that come with a preferred counsel...