Instructing law firms: what we are really looking for

You are an in-house lawyer doing pretty much what you trained to do in private practice. The main differences are that you are much closer to your clients, are no longer billing by the hour, and you are getting through the work more quickly. Then there is a small management earthquake and your GC moves on. The CEO would like you to be the new GC. You are euphoric for a couple of days, then realise you are now responsible for the quality and the cost of all the legal advice the company needs, whether it knows it needs that advice or not. After a decade or more of knowing precisely how to do your job, you are now left wondering what to do and how to do it. You are in the market for help, from whichever quarter.

You receive congratulatory e-mails and calls from law firms; a trickle at first, then a torrent. These are from firms you (or your company) have used before, but also from strangers. They want time in your diary. They want to help. They are desperate to help. They repeatedly mention that they cannot do enough to help. Terrific: help sounds great. It's just what you are after. The law firms have all the bases covered: corporate, commercial, litigation, competition, property, intellectual property, tax, regulation and employment.

Proud boasts are made about global footprints. It is made known in a vaguely comforting (or perhaps less than comforting) manner that these firms have strong relationships with senior individuals in your organisation. They say that there is a cultural fit between your company and their firms. Discounts are offered on hourly rates. They want to provide training to your team. Partners fly across continents to meet you. Action points are taken, and they are aggressively pursued post-meeting. However, in the end, there is a lot of heat but not so much light. Rarely do you come away more inclined to instruct than you were before the meeting.

Time passes, you give your first big instructions, and the work is done well. Then bills are presented. In between times, things got complicated. Sadly, you are told that the instructions were imperfect at the outset. Some of the assumptions have been broken. Partners from other areas of the firm (or from overseas) needed to become involved more than was anticipated, and your relationship partner is loath to offer to write off their time. That would be difficult; it would put him in a spot. The other side's lawyers were second rate or lazy, so your lawyers had to fill in the gaps, at your cost. Your non-legal business colleagues asked the same questions repeatedly, and this created unfortunate inefficiencies. Time dragged on, and time is money. The imperative to help has been replaced, or at least obscured, by an imperative to bill.

As many in-house counsel will know, too many of the UK's law firms pursue GCs' existing instructions energetically, with very little evidence to show that they are better or cheaper than the incumbents they are looking to displace. Then, once instructed, they are too ready to sacrifice financial discipline (at the client’s expense) on the altar of (even if unrequested) client service.

So what can be done about this in practice? Here are some hints:

GCs are responsible for the quality and the cost of all legal advice that our companies receive. This is serious stuff, and to discharge our responsibility, we need to keep the best lawyers onside, be they in-house or external.

The GC has direct management control over the in-house team and feels good about this. It's comforting. The GC has very little control over external lawyers, and worries about this. It's disconcerting. So what is the most important rule of all? Easy: ensure the GC feels in control, at all times.