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August 13 2020

Maximising Law Firm Relationships: A How-to Guide for In-house Counsel

Tips & Tricks

Harry Mellor

Harry Mellor

Maximising Law Firm Relationships: A How-to Guide for In-house Counsel

On our latest GC call we were delighted to welcome Will Long, Client Partnership Director at Alacrity, who shared some valuable insights into how general counsel can get more value out of their external law firm relationships. For Will, three key areas must be considered when trying to drive valuable relationships between the two: controlling costs; transparency; and evolving relationships through data.

Cost Control

Unsurprisingly, controlling costs is a key challenge for many businesses at the moment. However, this must not be narrowed down to minimising costs exclusively, but must also be considered in relation to performance value, and what each party’s expectations are at the beginning of the engagement. Interestingly, when attendees were polled during the call, performance ranked top when considering what had led to good relationships with law firms in the past.

Will also posed an interesting analogy on the topic of costs: how often do you go into a store, pick up an item without looking at the price tag, and then try to negotiate what you think is a fair price on the way out? For Will, this can often be the situation that counsel find themselves facing, whereby costs are only discussed through retrospective conversations, once matters have been completed. The key issue here is that each party may disagree on what are appropriate costs, which ultimately leads to an adversarial conversation which can cause negative feelings and waste time.

So how can this be improved? There is an increasing trend of agreeing fees up-front for legal work. Where the in-house team is able to accurately and fairly cost the work prospectively, a clear understanding of value can be gained as the relationship progresses. By adopting this fee model, if expectations are not being met, a more constructive conversation can also be had in ‘real time’ as opposed to retrospectively, helping to mitigate negative feelings later down the line.

Transparency

Linked to the above is the need for transparency between in-house counsel and external legal teams. Although being open about costs and capabilities is important, Will has found that the key to a transparent relationship is ‘drawing back the veil’ on the wider aspects of the relationship. It is important not to only focus on areas of improvement and whether you will engage that firm again. Instead, the firms which are delivering on promises must be highlighted and invested in. These may be firms which are ‘punching above their weight’ in terms of the value they are delivering, however in-house teams must be alert and able to recognise them when they present themself.

Data-driven Relationships

Finally, a lot of people are using data to drive change and make optimal decisions, and this data falls on a spectrum. At one end, very large legal functions possess so much data that it becomes unwieldy and far from user-friendly. At the other, smaller firms may be struggling to identify where the value lies from their data, particularly if their data is being delivered to them ex post facto. Legal teams often try to incorporate data when making business cases for law firm relationships. However, where this data is wide-reaching and more complex than necessary, the waters are muddied instead of clarified. Keeping data streamlined and easily digestible allows data to carry more weight as teams are encouraged to use it. Strong law firm relationships can then be forged at the outset, as in-house teams have a realistic expectation of what value they can deliver and at which point on the timeline.