Wooing Corporate Clients: What GCs Look For From Outside Counsel

With competition for legal work as fierce as ever, a number of practices and concerns have emerged among general counsel in selecting law firms to represent their companies.

Outside counsel should provide superior service that stems from a genuine interest in the business and industry of each client. And attorneys must render rapid responses, provide specific advice based on a working knowledge of the client’s business, and avoid generalized prescriptions that fail to predict legal outcomes.

General counsel also dislike "services rendered" bills or charges, such as first-class airfares, that are inconsistent with a client’s business culture or expectations.

That was the consensus of opinion offered by in-house counsel who were panelists at a recent seminar in Newport, R.I. conducted by the State Capital Global Law Firm Group, an association of independent firms regularly selected by counsel for their knowledge of state legislatures and regulatory agencies.

This year’s regional event drew firms from across the Northeast, parts of the Southeast and Canada, with lawyers paying particularly close attention to the portion of the program entitled: "Buyers Talk: What General Counsel Look for in Outside Counsel."

Panelist Barbara L. Bennett of Providence, the general counsel at Johnson & Wales University, said that it is important for private practitioners "to know the business goals and corporate culture of the client."

She stressed that a firm "must pick the right people for the job [because] we have no time to train associates," adding that she "hates to see expenses for overhead charges, such as word processing time at lunch."

Mary Clare Decker of Providence – general counsel for Providence Washington Insurance Co. – affirmed that lack of attention to client billing concerns could affect relationships.

She said her company won’t pay for "services rendered" bills that lack detailed descriptions of time and activity, which most often come from large New York City firms.

Decker also encouraged outside lawyers to do what inside counsel must do for their management: "stick your neck out and give an answer without saying ‘on the one hand this and on the other hand that.’"

For practitioners wanting feedback on how they are doing, Andrew C. Spacone of Providence, the senior associate general counsel at Textron, suggested that informal opinion surveys work best.

"I’ll do written surveys, but they are not as good as if you sit down with us and talk about the relationship," he said.

Selecting Counsel

All of the in-house panelists indicated that references from other respected lawyers are important, as well as a reputation for providing great service tailored to a client’s wishes.

Spacone observed that a large company, such as Textron, is rich in people who have dealt with outside counsel and can provide references regarding the quality of work and service.

"We also go to lawyers we trust for references," he said, noting that an attorney who makes a sound referral is providing a form of advice that is highly valued.

Spacone added that the size of the firm is far less important than the quality of the individual service provider.

Bennett acknowledged that some projects may require "big-firm resources" but said that she hires lots of small firms too.

But it was clear that reputations for service were much more important to panelists than paper credentials, especially when there are so many lawyers with great educations and publishing credits.

"The last time I went to Martindale to check out a lawyer was some 20 years ago, and I just remember that all the lawyers looked alike," said Decker.

She checks with other members in her industry for references and with other law firms she respects to learn how good a lawyer is at providing service. Decker also relies on key contacts at particular firms to select other lawyers in that firm to work on a project.

Decker praised the work of one local partner, who, she said, always asks at the end of a matter how her associate or partner performed. "It’s just like getting good service at a restaurant – you want someone to ask you about the experience."

Bennett noted that word-of-mouth travels far, pointing out that many lawyers can utilize trade associations for references on lawyers.

She utilizes the National Association of College and University Attorneys, a group known as NACUA, and occasionally calls a lawyer who has provided an impressive presentation at a NACUA seminar.

Spacone pointed out that some companies, such as Textron, actually have an internal system that forces in-house users to rate attorneys in various categories for future reference by others.

Bills And Hot Buttons

Panelists also shed light on a number of billing practices and other concerns that are common hot buttons for in-house lawyers.

Responsiveness was one of the most important areas of emphasis.

Decker said she expects calls to be returned on the same day, adding that lawyers "must display a sense of urgency."

She said a return call should at least provide information about what other priorities are pressing on a lawyer if no substantive response can be made, but that missed deadlines cannot be excused with stories about how many other matters counsel has undertaken.

Billing was also an area of concern, but the panelists generally agreed they would not hesitate to pay significant hourly rates for superior service.

"We don’t look for Rube Goldberg budgetary schemes to save money," said Spacone, noting that his area of practice – complex commercial litigation – can expose a corporate client to great losses.

He suggested that some "accountant eye shade approaches" to litigation management "show a complete ignorance of total costs, such as precedential value, indemnity costs and other expenses associated with a case."

Decker asserted that it is more the piling up of little tack-on costs for profit-center items like faxing and photocopying that can be disturbing.

She also warned against charging for items like first-class travel when the top officers of the client are not incurring such costs for themselves.

Decker recalled when outside lawyer flew first class on the same airplane where the general counsel and client was flying coach, calling the failure to sit next to the client "a lost opportunity" to cement the relationship and talk about the case.

Panelists also noted that they don’t mind paying a "premium" for a really great lawyer, but just want a candid discussion of all costs up front before they are incurred.

"If you are that good, I may pay you in a lump sum," said Decker, noting that hourly billing is not always essential.

But she cautioned against sending the bill out before the legal work product arrives, as some firms have done.

Decker and other panelists said they generally use their own retainer letters to set expectations for billing, including expenses that the corporate client will not authorize.

Spacone asserted that "it is up to us [as in-house counsel] to give clear guidance on fees, expenses and objectives" of the corporate client.

Feedback And Relationship Building

Panelists basically agreed that private practitioners could build more solid relationships with clients by learning about their businesses and industries.

Decker suggested that practitioners have lunch with their clients more often and just listen to their concerns.

"Nobody ever says, ‘tell me about your business,’ but that’s how you can hear our needs and figure out how you fit into them," she said.

David Black of Providence, the vice president in charge of legal functions at the New England division of Southern Union, agreed.

He added that personal knowledge of a client’s business allows a firm to jump in and provide helpful advice before it is solicited.

"We expect our primary outside counsel to alert us to changes in the law and problem areas without having to call them," he said.

Black said a phone call from someone who knows the business and the industry is much better than a generalized "one-size-fits-all" newsletter or firm article.

Decker’s comments suggested that an individualized approach to legal service is rare but valuable. "You can really beat your competitors on obsession with service," she told the audience.

Spacone recommended that lawyers focus on building "a trust that will lead to more frank dialogues on the relationship."

He said he respects lawyers for using "personal candor that gets us to the right place" when outside counsel must respectfully disagree with in-house opinions.

"If I am wrong, I want someone to tell me because I need to know if we are going in a wrong direction," he asserted.

According to Spacone, in-house lawyers and private practitioners could gain a lot from seeking candid feedback at the end of a matter about how they handled it together.

The panelists agreed, noting that regular informal feedback is best sought on a face-to-face basis.

Bennett said she is glad to talk with service providers about how they are doing, but cannot take the time to complete a lengthy written survey.

Most audience members from law firms acknowledged that they want to know how they are doing, but expressed concern about doing any formal surveys that take up valuable client time.

Black said he regularly solicits feedback and provides it in many forms, and would not mind doing a written survey if it is done artfully and skillfully.

"The questions have to be good, but I give plenty of feedback on the fly already," he said.

Decker said she would probably just throw a written survey away if it was mailed to her, but suggested that a personal approach would meet with better reception.

"If a law firm said to me, ‘we want to improve our service,’ then I would be glad to take part in that effort for a good firm that I liked," she elaborated.

Spacone rejected the idea of having a third-party consultant doing a client satisfaction survey, but said he has often provided individual feedback, especially at the conclusion of a case.

(A version of this article originally appeared in the July 19, 2004 issue of Rhode Island Lawyers Weekly, a sister publication of New England In-House.)

Questions or comments may be directed to the writer at [email protected].