29 June 2018

In a recent post, we reviewed some of the circumstances under which a large corporation might want to retain outside counsel. In addition, small to mid-size businesses that do not yet have in-house legal teams may depend on outside counsel for a wide array of legal services, such as contract negotiation, business litigation and patent work. Regardless of the size of your enterprise, finding quality legal counsel that can ably represent your needs is a top priority. But you don’t want to take on just any old bloke who can hang a shingle above the office door. So, how to narrow the choices? Below, we’ve laid out some considerations to keep in mind as you try to find the outside counsel best for you.

First Impressions

After your first meeting, prospective legal counsel ought to leave you with the sense that they are prepared and able to listen. How can they demonstrate preparation? They should have done a good deal of research on you and your company, and should be able to prove their expertise in your industry. In the midst of all this, however, it is critical that they start asking questions and listening to your answers. They should be more interested in learning your concerns than in touting their own abilities. You want someone who seeks to understand your unique circumstances and works to collaborate with you to find the best possible solution. You may be working with this individual for some time, so ask yourself, is this someone with whom you’d want to interact with over the long haul.

Understanding Billing Practices

The best lawyer in the world isn’t going to be useful to you if you can’t afford her fees. So, as part of your initial research, you need to gather information about the firm’s billing practices and inquire as to whether the prospective lawyer is open to alternative billing options.

As you search for potential candidates, contact their previous or current clients to get their perspectives on the firm’s billing practices. This can give you an idea of hourly rates, the nature of the firm’s time entries, and whether these clients have been satisfied with their overall experience.

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At your initial meeting with the firm, request an estimated financial breakdown for the different phases of litigation. How much would they expect to bill in Pleadings, Discovery, Dispositive Motions and Trial? This will give you a clear measure of comparison when you start to place their fees up against those of their competitors.

As you begin to get a sense of their overall payment structure, you can also gauge whether or not they are married to the billable hour model. Unfortunately, the billable hour model incentivizes slow, plodding work. Here are some other payment options to take into consideration:

Pure Contingency

In a pure contingency arrangement, the law firm receives a fixed amount, or percentage, of any monetary award resulting from a lawsuit. Typically, the client only pays hard expenses in preparation for the trial. This billing mode is most commonly used when the plaintiff’s case may lead to a reasonably large settlement. Because the firm bears almost all of the risk, pure contingency arrangements can help ensure that the firm will work hard to obtain a favorable outcome.

Hybrid Fee Arrangement

In a hybrid fee arrangement, you pay the law firm a percentage of its usual hourly fee plus a contingency fee, depending on the results of the case. If your company does not win its suit, then you’re done; no additional fees are required. If the firm does win your case, then they collect the agreed-upon fee. This fee structure allows the firm to take on a portion of the risk and aligns the interests of the client and those of the firm.

One of the advantages of a hybrid fee arrangement is that it allows a great deal of flexibility in regards to the contingency fee. A number of different benchmarks can be established for that fee to take effect. For example, if the attorneys are working for the defense, they might be rewarded if the outcome is significantly less than what the client is being sued for. Awards can also be earned for other factors beyond the final decision. For example, a firm might collect the contingency fee if they complete a speedy disposition, or for success in particular aspects of the case.

Blended-Rate Arrangement

In a blended-rate arrangement, the hourly rates of each attorney in the prospective

firms are taken into consideration, and a single hourly rate is negotiated, which then applies to all attorneys. So, for example, a senior partner may typically charge $900 an hour, the junior partner charges $650 an hour and the associates charge $500 an hour. The client negotiates a rate of $600 an hour, regardless of which attorney does the work.

Another blended-rate option would reward the firm with a percentage if they perform under budget. For example, if the initial budget was $450,000, and the firm resolves the case for $300,000, then they would receive a percentage of the difference.

Consider Conducting a Substantive Interview

Most counsel interviews include a typical exchange of information, including credentials, previous clients and past casework. But according to Mark Herrmann, Chief Vice President and Counsel of Litigation at Aon, a better option might be what he calls a “substantive interview.” In a substantive interview, the prospective lawyer is given the details of a case a few days ahead of the interview and is asked to present a strategy for how to proceed on the case during your initial conversation.

This model of interview moves the conversation past the firm’s previous cases and gives the prospective lawyers the chance to distinguish themselves while working on the specifics of your case. According to Herrmann, substantive interviews allow you to “receive ideas from each firm competing for the business… Early brainstorming about a case with multiple firms may accelerate your learning and give you a better understanding of your position.”

Conclusion

Finding the right outside counsel for your business is an important decision, but it doesn’t need to be a difficult one. Establishing clear expectations and initiating an open pathway of communication will go a long way in hiring the right lawyer for your needs. If you have questions on where to turn, contact a Blueprint representative today. Blueprint can help you sort through issues surrounding outside counsel and help you find quality legal advice you can trust.