Posted by: johnocunningham | January 27, 2012

Communication Lowers Legal Costs

According to a recent survey of General Counsel conducted by Corporate Counsel magazine, 65 percent of in-house legal chiefs are most concerned with one aspect of their relationship with outside law firms – the cost of service.

As a successful former General Counsel, I always found that “partnering” with my outside counsel through communication helped to improve costs much more dramatically than wrangling with them for discounts.

For instance, I always found it helpful to take my key outside counsel to lunch periodically so that I could explain to them the latest developments in our industry and our company, as well as the current internal politics and economics behind our decision-making. This helped our outside counsel to be much more pragmatic and efficient, and it made for a much more pleasant working relationship where they felt more like a part of our company.

Sometimes, I also brought our outside counsel in to consult with management during the planning stages of a new endeavour that might be materially impacted by the law. For instance, I hired one of the world’s foremost experts in one legal specialty to explain, from a practical perspective, why one proposed business strategy was virtually doomed to failure (based on this expert having been called in to clean up the mess left by other companies that had tried a similar strategy sold by slick consultants).

As a result, we decided to forego that strategy and probably saved millions of dollars, which gave management a very positive impression of the value provided by professional legal services. 

Outside counsel and General Counsel can work together to reduce legal costs with more proactive communication and early intervention; and both should be pushing each other to do more of that for the benefit of the client. The more success you have with this strategy, the more often you will be called in “early” by your business partners, instead of late when the die is already cast.

Note: When asked what they would most like to improve, 53 percent of General Counsel said they most wanted to improve being “brought in too late” to be effective. Thus, outside lawyers who can help the GC demonstrate to his or her business partners the value and the ROI of early intervention will be sure to get a lot more calls !

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