side, does not seem detailed enough for you, or seems to focus too much or not
enough on business matters (as opposed to technical legal matters), you may
become dissatisfied. This may not indicate a weakness on the part of either
the lawyer (or law firm) or you as much as a different cultural orientation.
You also should consider what size law firm you want to work with. You
will have to determine how much big firm bureaucracy you can tolerate and
balance that against how complete a solution you would like to have in one
place. Larger law firms are, by their nature, more bureaucratic and, there-
fore, potentially less responsive than smaller firms. For example, it may be
more difficult to persuade a larger firm to show f lexibility on fees because
the lawyer may have more procedures to go through before he or she can
agree to a billing approach that is outside standard firm guidelines. This is
not necessarily a negative characteristic of large firms, but rather an obser-
vation on organization size. And this principle may apply to firms of any
type, not just law firms. On the other hand, a larger firm may be more likely
to be able to provide a more comprehensive solution to your legal issues. You
may decide the reduced complexity and increased consistency provided by a
larger firm outweighs the disadvantages.
It is also worth noting that these needs may vary over time. As a firm
grows and its business and staff change, its legal needs and requirements
change as well. As with any service provider or vendor, the legal relation-
ship should be reviewed from time to time to ensure that it has remained
productive and appropriate.
Conducting the Selection Process
Once you have determined what criteria matter to your firm, you will have
to go through the actual process of engaging an attorney. The lawyer you hire
will probably play an important role for your company, so the process you use
should ref lect that. This section provides a few suggestions you may find use-
ful when conducting your selection process.
TREAT THE PROCESS AS IF HIRING AN EMPLOYEE. The process of hir-
ing a lawyer should share many of the steps most firms use to hire senior em-
ployees. Ideas you may find helpful include:
â€¢ Review each candidateâ€™s resume and track record.
â€¢ Check references. Good sources of references may include current or
former employers and clients.
â€¢ Conduct a diligent interview process. Too often lawyers get off easy in
an interview process with prospective clients because of their unique
(and sometimes intimidating) knowledge; do not hesitate to ask lawyers
the tough questions.
â€¢ Do independent research of the lawyer or firm. Two places to start are
the firmâ€™s web site and the legal resource site Martindale-Hubbell
GATHER CANDIDATES FROM A VARIETY OF SOURCES. As you con-
sider which lawyer or firm to engage, try to take the time to consider a va-
riety of candidates. Candidates may come from many sources. One good
510 The Back Office: Efficient Firm Operations
way to identify quality candidates is by asking for referrals from people you
know and trust. Another potential source of candidates is industry sources.
Some useful industry sources may include, for example, other firms in your
industry, lawyers you heard of in the context of doing good work on an in-
dustry-related matter, or attorneys who publish relevant articles or speak at
industry events. Yet another source of potential candidates is the recommen-
dation of other lawyers. Other lawyers can be especially helpful if they have
worked with you in the past or know your business well.
CONSIDER AN IN-HOUSE COUNSEL. One act that can make a tremen-
dous difference is hiring in-house legal counsel (or general counsel). An
in-house lawyer can address a significant amount of your legal-related activ-
ities, thereby providing you with extra time to focus on other things. Further,
if you have a high enough quantity of work, having legal work done in-house
can save money. The benefits an in-house lawyer provides should include,
among other things, improved ability to:
â€¢ Select outside attorneys when necessary.
â€¢ Evaluate fees.
â€¢ Distinguish among different firms based on skill sets (when selecting
outside counsel for discrete projects).
â€¢ Identify legal issues that need to be addressed.
Additionally, you may improve your firm by having an in-house attorney
execute some projects you might find are impractical to execute with an out-
side firm. These projects might include, for example, completing a whole set
of form documents (reviewed by outside counsel) or developing a firm nego-
tiating strategy for engagement contracts.
Your in-house general counsel should be a strong generalist with an ex-
tensive set of contacts in the legal community and good general business
sense. You should not expect an in-house lawyer to handle everything. For
example, if the firm confronts some very large, customized agreement or
transaction (e.g., a complex licensing agreement), the in-house lawyer will
probably need to bring in an outside attorney who specializes in that area.
The in-house attorney, however, should be proficient in identifying and re-
taining specialists as needed. Finally, if a general counsel is effective, it is
likely that over time he or she will become more involved in firm business
activities, especially administrative matters and general firm strategic de-
The disadvantage to hiring an in-house counsel may be cost. Ultimately, to
decide whether to hire an in-house counsel, the firm must do the math. Look
at the firm operating history, and try to adjust for what has traditionally been
missed that would be caught going forward. Bear in mind, however, that this
analysis is complex. On one hand, the firm will probably get better advice on
a more rapid and f lexible basis. The in-house lawyer should be able to catch
and address more legally related issues early. For example, he or she may be of
assistance in identifying and resolving disgruntled employee issues, dealing
with auditors, preparing for fund-raising, and so on. Also, you may end up
having fewer issues that warrant legal attention, but previously had not re-
ceived it, due to simple luck. For example, bringing in an in-house counsel
may result in fewer contracts being signed without adequate legal review. All
these matters, and whatever else is relevant to you, should be included in your
analysis. The Risk Management chapter (Chapter 14) of this book discusses
the process of analyzing the trade-offs around such business risks.
Managing the Relationship
with Your Lawyer
Managing the relationship with your lawyer is an area where clients often fall
short. In this section of the chapter, we look at some ideas for managing the
relationship with your lawyer more effectively.
Defining the Relationship
Once you have selected your lawyer, you should spend some time clarifying
the nature of the relationship. This part of the chapter provides some ideas
for defining your relationship with your lawyer.
ENGAGEMENT LETTERS. Many law firms require their clients to sign an
engagement letter before starting work. Frequently, however, the engage-
ment letter is focused on issues that are of primary importance to the lawyer.
For example, the engagement letter is likely to discuss what the lawyer will
and will not be responsible for rather than the guidelines for how the lawyer
will perform. You can use the engagement letter to cover items that are of
primary importance to you. It may be useful to look at the engagement letter
as a master services agreement. Different professional services firms care
about different things, so we are not suggesting there is a specific way for you
to structure your engagement letter. We note, however, a few areas that you
may want to cover.
Generally, your engagement letter should cover how the ongoing operation
and communication between your lawyer â€™s firm and your firm works. Ulti-
mately, to determine what is covered, you will have to cover what is important
to your firm. One useful approach may be to start by looking at the master
services agreement your firm uses with other professional services providers.
One thing every professional services firm cares about is the fees it will
incur for legal advice. Thus, you will probably want to include detailed
512 The Back Office: Efficient Firm Operations
information about your lawyer â€™s (and his or her law firmâ€™s) billing rates and
practices in your engagement letter. Most engagement letters contain some in-
formation about fees, but you may want to check to see whether the informa-
tion covers what you want it to cover. One important issue to consider is how
the billing is structured. Depending on the nature of the work, you may prefer
to opt for a f lat fee or retainer structure instead of being billed on an hourly
basis. For example, if the lawyer performs certain activities on an ongoing or
recurring basis, a f lat fee or retainer may be a desirable option. If, on the
other hand, the activity appears to be a one-time event, you or your attorney
may prefer to use an hourly billing approach. Additionally, there are billing
questions to be covered in the area of procedure and extras. For example, how
often will your lawyer bill you? What will the bill contain? And what are your
lawyer â€™s policies regarding extra expenses? Will the firm charge for long dis-
tance? Copies? Document delivery? There may be other concerns, depending
on your situation.
Another item your engagement letter should include is the explicit identi-
fication of your primary contact. If the primary contact works at a firm, he
or she should be the person who is responsible for ensuring that the work
done for you is effective and efficient.
There is no special formula for covering everything. You may have any
number of specific needs or concerns that you want to set out in the engage-
ment letter. The important point is to understand the situation and cover
what is important for you.
WORK ORDER MODEL. To take the professional services model to its
logical conclusion, a client could implement a work order model with its
lawyers. Under this approach, you and your lawyer would complete an en-
gagement letter that served as a master services agreement. Each subsequent
piece of work would be set forth in a statement of work containing informa-
tion typically found in a statement of work, but tailored to address your spe-
cific situation. This approach would help promote a common understanding
of the relationship between you and your lawyer as well as the lawyer â€™s spe-
Scope of Assignments
In addition to defining the nature of the relationship in the engagement let-
ter, it will probably be useful to implement some measures to control the
scope of each assignment. Having clarity about project scope before work
starts is important to a successful completion of the project. In this section,
we discuss several ideas you may want to consider as part of an effort to de-
fine each assignmentâ€™s scope.
ESTABLISH A PRIMARY CONTACT FOR EACH MATTER. In addition to
having your lawyer serve as the primary contact for the relationship as a
whole, it should be useful to maintain a primary contact for each individual
matter. While your primary contact should be able to help resolve issues for
you on any particular matter, a primary matter contact will be more familiar
with the nature and status of the particular piece of relevant work. Thus, a
primary matter contact can provide updates more frequently and in greater
detail. And the primary contact for a particular matter can also serve as a
contact for your lawyer.
BE CAREFUL WHAT YOU ASK FOR. In making requests to your lawyer,
you will probably want to consider the surrounding business context of your
request as it relates to what you ask the attorney to do. For example, what if
you receive a lengthy contract from a large telecom provider for a small, in-
expensive service, and you understand that the contract is essentially a form
agreement that, given its size, is unlikely to be amended (or even seriously
discussed) by the provider? And what if you have serious concerns about a
single, stand-alone provision in the agreement? If you ask an attorney to re-
view the agreement, without even providing context, you are placing the at-
torney in a situation where he or she, without understanding the business
context, may spend many hours thoroughly and thoughtfully reviewing the
document, perhaps providing extensive comments. And the accompanying
fees are likely to be significant given the size of the agreement. While this
may frustrate you, resulting perhaps in a negative experience with your
lawyer, it would not necessarily be the lawyer â€™s fault. By providing the attor-
ney with the business context of the situation and educating the attorney
about what issues are of particular concern to you, you will provide guidance
and business context, leading to a more efficient result.
EXPLAIN THE ASSIGNMENT CLEARLY. When you give an assignment to
your lawyer, try to explain the assignment clearly and in detail. Complaints
about lawyers who seem to f loat around sometimes center on the lawyer â€™s in-
ability to understand and act on what the client wants. It is unfair to the at-
torney, however, to expect him or her to have either a thorough understanding
of a given matter or clear direction about the deliverable if the client has not
provided adequate preparatory information. This explanation really falls into
two areas: the background of the assignment and the assignment itself.
First, you should try to help your lawyer understand the background of
the assignment. Remember, your lawyer does not shadow you all day every
day, so he or she will not know all the background facts to the matter you are
assigning. Additionally, the lawyer may not know what you are trying to
achieve. You may be glad in the long run if you take the time and make the
effort to provide your lawyer with a greater understanding of what is going
on from a business perspective.
Second, ensure that the lawyer understands what you want delivered.
Everyone has heard cautionary tales on this front: The client requests an an-
swer to a seemingly simple question and 10 days later receives a 10-page
514 The Back Office: Efficient Firm Operations
memo on some esoteric choice of law issue. Lawyers are in the client service
business, and most attorneys want to provide good client service just like any
other professional services provider would, so when there is a major discon-
nect and failure in delivery, the client should recognize that the deliverables
may not be clearly defined. Clients who take the time to clearly explain what
they expect the lawyer to deliver will have a better chance of receiving the
deliverable they want, even if the answer to a question is not the answer they
hoped to receive, and receive fewer surprises.
ASK QUESTIONS. It sounds obvious, but it is nevertheless worth mention-
ing because it often emerges as a source of dissatisfaction with legal services
providers. Legal matters can sometimes be difficult to deal with, especially
for busy professionals who have other important matters on their mind. For
example, you may not be sure how the lawyer expects the relationship and
process to function. Or you may not understand the nature of the matter
being addressed. Additionally, sometimes clients are hesitant to display what
they may fear is a lack of sophistication about legal matters. Thus, they avoid
questions they think may be perceived as dumb, perhaps assuming things are
covered, and instead move their attention to something else.
If you do not understand what is happening, ask questions. You should
take the time to understand the details of the legal relationship. Again, the
majority of lawyers, like most other professional services providers, want to
provide quality service. And most lawyers understand that it is valuable for
his or her client to ask questions up front instead of learning about things at
a later date. Thus, you may be well served to ask any questions you may have
concerning issues ranging from operational matters such as billing, which
lawyers will be working on the matter, and any number of other issues, many
of which are covered in this chapter, to legal matters, such as, for example,
what the clientâ€™s options are on a given matter or the benefits and risks of a
particular course of action.