Companies often ask Your Legal Manager®, “How would Your Legal Manager provide in-house counsel services to us?” In other words, “What specifically does Your Legal Manager do for its clients?” Those are appropriate questions. A company should not hire any law firm without asking, “What are you going to do? When will it be finished? How much will it cost?”
This article summarizes what Your Legal Manager can do for its clients by describing 10 procedures Your Legal Manager follows in working with its clients. It is intended to assist company executives to decide if Your Legal Manager is right for their company. While some of these procedures can be abbreviated or skipped altogether by some companies, most companies will gain the maximum benefit from Your Legal Manager’s services by working with Your Legal Manager through these 10 steps at the appropriate times. The goal of the 10 steps is to allow the company’s executives to focus on their jobs and not spend time handling the company’s legal matters. Your Legal Manager’s management of the company’s legal problems should enable both the business and legal functions of the company to be better managed.
After completing the first of these 10 steps, Your Legal Manager can provide an estimate of how much time will be needed to complete the subsequent steps in connection with the legal projects that the company and Your Legal Manager identify in the first step. At that time, Your Legal Manager and the company can negotiate a compensation agreement for proceeding through the next steps, subject to adjustment as the procedures proceed. Your Legal Manager’s compensation can be a fixed fee, hourly rate fee, equity award, or a blend of those compensation elements, depending on the company’s needs and resources.
STEP ONE
Your Legal Manager meets with the company to identify and assess legal needs
In the initial stage of its work, Your Legal Manager meets with the company’s executives to identify the company’s legal problems, legal projects and areas of material legal risk. Then, jointly with the company, Your Legal Manager prioritizes the importance, urgency and size (estimated time to completion) of the identified matters. Your Legal Manager and the company next develop a time and milestone roadmap for handling the legal matters that need attention in the near-term as well as those that can be handled over a longer time period.
Your Legal Manager will meet with the executives who are involved in the genesis of each legal project and those whose area of business responsibility will be affected by how the matter is handled. Depending on the size of the company and the nature and breadth of the legal matters identified, from one to five meetings may be needed for this step to be completed. The goal of the meetings is twofold: First, the meetings give Your Legal Manager an understanding of the Company’s resources and limitations in regard to its specific legal problems and projects. Second, Your Legal Manager will seek to identify company-wide legal risks, future legal problems and projects so that the company and Your Legal Manager can prioritize their importance and the urgency of their resolution.
To identify, evaluate and prioritize a company’s legal needs, Your Legal Manager analyzes both the needs the company has recognized and those it has not yet recognized. Then Your Legal Manager and the company’s management can then evaluate all of the company’s current legal needs, using criteria such as the following, applied to the company’s situation in the context of each specific need.
- Is the assistance of an outside firm needed to handle the matter or can Your Legal Manager (through The Law Office of John A. St. Clair, P.C.) working with the company accomplish the company’s objectives in the matter at a lower cost?
- What is the appropriate timeline for resolution or completion of each of the identified legal matters? Do any of the matters have a “drop dead” deadline for completion? Can and should the timeline for resolution of the matter be accelerated or delayed and would acceleration or delay provide a benefit or a detriment to the company?
- Is the risk/reward of the matter so high that only the best lawyers in the field should be entrusted to handle it regardless of the cost of doing so? Could a less experienced firm handle the matter for a lower cost and can the company accept the risk of a possibly inferior result in the matter to take advantage of the lower expense?
- What factors from the company’s point of view determine the importance, urgency and cost-bearing tolerance with respect to each identified legal matter? How can those considerations be communicated to the firm selected to handle the matter in order for the company’s values and goals to guide the firm’s work?
The above determinations are designed to enable Your Legal Manager to assist the company in making a cost-benefit-timing determination of the company’s needed legal services. Your Legal Manager can then assist the company’s executives to manage its legal work on a flexible, on-going basis consistent with the company’s specific goals, risk tolerance and financial resources.
STEP TWO
Your Legal Manager assists the company to set the search parameters for finding the right firm
Your Legal Manager works with the company’s executives to determine the search parameters to be used to identify a reasonable universe of law firms that would be suitable to handle each legal project or matter that was determined to need current attention. This process involves answering questions such as:
- Does the company have an existing relationship with a firm that the company believes is suitable to handle the matter? If so, does the company nonetheless wish to interview other lawyers before handing the project off to its existing firm?
- Are many firms competent and experienced in the field of law applicable to the matter or do only a few firms have the expertise and experience the matter requires?
- Does the firm need to be locally based or could a firm in another area do it as well as a local firm?
The company and Your Legal Manager will need at this stage to determine how much work and time it will take for Your Legal Manager to find firms suitable to recommend to the company. Depending on the answers to the questions in Steps One and Two, the company and Your Legal Manager will determine whether an adjustment of Your Legal Manager’s compensation is needed for Your Legal Manager to proceed beyond Steps One and Two.
STEP THREE
Your Legal Manager assists the company with the interviewing/hiring process
After Your Legal Manager has identified one or more potentially appropriate firms for each of the company’s specific projects, Your Legal Manager works with the company in connection with the selection and hiring of the firm the company chooses. Your Legal Manager can:
- Determine the number of firms the company wishes to interview in the hiring process, which can include the company’s existing firm.
- Investigate and evaluate the experience of the firms the company executives wish to interview and, together with the company’s executives, determine the selected lawyers in those firms to interview.
- Arrange the company’s interviews with each of the selected lawyers at a time and place agreeable to the company’s executives.
- Assist company executives to make the interviewing process as informative as possible in the context of hiring a firm to handle the matter.
STEP FOUR
Your Legal Manager assists clients to prepare a budget for each legal project and to integrate that budget into the selected firm’s engagement agreement
After the company selects a firm for the project, even if the firm selected is the company’s existing law firm, Your Legal Manager works with the company’s executives to develop, if possible, a time and costs budget for the selected firm’s handling of the project. Your Legal Manager will then negotiate the terms of that firm’s engagement agreement to include mutually satisfactory budget provisions. Your Legal Manager will then review with the company the firm’s engagement agreement and, if required, negotiate further with the firm to reach a retention agreement that is acceptable to the company.
STEP FIVE
Your Legal Manager assists the company to develop its staff’s authorities and responsibilities in relation to the firm engaged by the company
Your Legal Manager will work with the company to develop a reporting procedure for communications between the company and the firms handling the company’s legal work. For example, Your Legal Manager will assist the company to determine which executives have authority to make decisions in the course of each project assigned to a firm. Questions such as these will need to be answered:
- Should only one executive be responsible for all communications and decisions related to the matter or can two or more executives be authorized to communicate with the firm about the matter?
- What internal procedures should the company implement to be certain that the appropriate persons in the company are kept informed about the progress of the matter? For example, what information should the company’s finance department receive before paying a firm’s invoices? What “triggers” should raise an issue that needs to be decided by the company’s top executives or discussed with the company’s board of directors?
- Could Your Legal Manager be given authority to communicate with the firm about some non-substantive actions, after general approval by the company’s appropriate executive, in order to relieve the day-to-day communication pressure on the company’s executives in regard to its legal matters?
STEP SIX
Your Legal Manager serves as a knowledgeable liaison to the firms the company retains
After a firm is hired, Your Legal Manager can serve, to the extent the company determines is warranted, as the company’s communication liaison with the firm, reporting to the company as frequently as the company determines is appropriate for each project. For example, Your Legal Manager could liaise with the firm and give a report to the company monthly, keyed to the firm’s invoices. (See Steps Seven and Eight, below.)
STEP SEVEN
Your Legal Manager arranges for interim reports from the firm the company retains
Your Legal Manager can arrange for, and review, interim reports to the company by the firms handling the company’s legal matters as often and in as much detail as the company wishes.
These reports can cover matters such as:
- The cumulative amount of billable time spent to date.
- The estimated percentage completion of the final result.
- Any unforeseen issues or delays in the firm’s work occurring in the current period.
- Why the lawyers in the firm who have worked on the matter during the current period were chosen to do the work.
- Any interim advice that the firm is able to give the company at the time of the report.
Your Legal Manager can provide its analysis of any part of the firm’s advisory report that requires the company’s closer consideration. Your Legal Manager can assist the company to evaluate any interim results achieved by the firm. Based on the reports, the company can continuously evaluate the progress of the firm’s work from initiation to completion, but the company’s executives will not have to spend the time to do the analysis and evaluation without independent legal advice.
STEP EIGHT
Your Legal Manager arranges an appropriate schedule for each firm’s invoices
With respect to the firm’s invoices to the company, Your Legal Manager can work with the company to determine matters such as:
- How frequently the company wants to receive the firm’s invoices.
- To whom they should be addressed.
- How much detail each invoice should include.
- In what electronic or other format the company wishes to receive invoices.
STEP NINE
Your Legal Manager evaluates with the Company the results obtained by the firm
Throughout the process of the firm providing the result it was hired to accomplish, Your Legal Manager can review the firm’s invoices and can be available to discuss any questions or comments the company has about the firm’s fees and the results the firm has obtained to that point. Your Legal Manager then can obtain the information the company executives need to evaluate the invoices and results in relation to the initial cost/benefit analysis the company and Your Legal Manager performed in Step One. If it is desirable to make any changes in the way the work is being done by the firm, Your Legal Manager can communicate the changes to the firm and follow up to evaluate how well the firm implements the changes.
STEP TEN
Your Legal Manager assists the company to change firms
If for any reason the company determines that the performance of the firm retained for a project is unsatisfactory, or if the firm terminates its representation of the company, Your Legal Manager will assist the company to identify and retain a replacement firm. Your Legal Manager will work with the company to make the transition to the new firm as efficient as feasible. Based on Your Legal Manager’s knowledge about the company and its business, the process of finding and hiring a replacement firm can be streamlined and accelerated. Lessons learned from the company’s experience with the prior firm can be applied in hiring the replacement firm. Your Legal Manager will assist the company to institutionalize the lessons for application in any future retention of firms the company makes.
CONCLUSION
By involving Your Legal Manager in the management of a company’s legal work, the process can be better managed by the company’s executives in less time, attorney-client communications can be more efficient, and the chances of legal “surprises,” such as an unexpected result or an unacceptable expenses can be reduced. Since Your Legal Manager’s fee structure can be tailored to the company’s resources and the extent of Your Legal Manager’s involvement, retaining Your Legal Manager should produce enhanced efficiency and cost-effectiveness in the company’s spending on its legal matters.
This information is provided for general purposes only. Nothing in this article should be considered legal advice or legal opinion. Portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome, and results depend upon a variety of factors unique to each representation.
The Law Office of John A. St. Clair, P.C. established Your Legal Manager, a provider of in-house counsel services. John A. St. Clair of that firm can be reached at john.st.clair@yourlegalmanager.com.
© 2013 Law Office of John A. St. Clair, P.C. All rights reserved.
