One of the most common problems I faced as the General Counsel for various businesses was attempting to balance the value of legal services provided by outside counsel against the bills we received. Although I fully understood that the company was often paying for hourly services without a guarantee of success, it was quite a different matter to justify to business partners a large legal bill in the face of an unsuccessful litigation or a transaction that did not come to fruition. I also found that outside counsel’s notion of what alternative billing arrangement should look like to be somewhat lacking. They often seemed to favor the law firm at the expense of the client. I frankly don’t think most lawyers “get-it” when it comes to producing business value from legal representation.

It was for these reasons that I developed my current model for outsourced legal services. In my model an experienced attorney first spends time learning what makes a business tick, and then learns what elements are integral to the success of the company. Armed with this knowledge the attorney then initiates an audit to look at how the Company’s legal functions are currently performed and by whom, and evaluates whether the services are successful and cost effective.  Deficiencies are identified and suggestions made for improvement.

One a client is armed with their legal “audit” they can make educated decisions about which legal tools are cost effective to handle certain types of work. For example an attorney may suggest a client use a boutique specialty firm for certain services currently performed by a large firm or may suggest that a generalist firm could fit the bill. Additionally, they may identify work that a paralegal could perform rather than a junior or senior attorney. Lastly, the attorney may look at the potential to off-shore work, or relocate resources to decrease cost and increase availability and working hours.

Once the audit is complete, the attorney can identify what legal work is a correct fit for the company’s resources and what needs to be handled by others. The key point is to balance knowledge and experience with economic value. The best way to do this is to reduce the cost structure for all the resources used. For outside firms, that likely means a nice office, but not an ivory tower. It can allow for a stable of experienced attorneys, but not an overabundance of associates or specialists looking for work.  Also, it means using experienced paralegals and contract administrators in lieu of attorneys whenever possible.

To really take advantage of economic efficiencies a nationwide or worldwide network of contract attorneys and paralegals must also be ready willing and able to perform services at a moment’s notice. Turnaround time can optimally be reduced from weeks to days or even hours. In an ideal situation SLA’s with guaranteed timeliness can be provided.

In implementing these systems, it is important that the processes and procedures mesh with those of the client and that communication occurs throughout the process. A legal representative should always be available for client contact at every stage, much like an IT help desk is available to open a ticket and resolve an issue.  It is simply not acceptable for a revenue producing deal to be delayed because the lawyer is unavailable or there is too much backlog. Delay is one reason many lawyers are seen as the “deal prevention team.”

To sum it up, there really is no one size fits all solution, but the truth is almost all companies are paying too much for legal services in one way or another. Every successful business person has a keen insight into economic value, so if you think you aren’t getting enough “bang for the buck” when it comes to legal services, then you are probably right. If you want some assistance to solve those problems, I am happy to schedule a free initial assessment of your company’s legal services at no cost to you. Please give me a call or send me an email and we can get the process started.

Martin

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