Oh, the horror: Outside counsel glued to a BlackBerry during a meeting with their in-house counterparts. A firm submitting an ill-prepared motion to dismiss to an assistant general counsel — which was paid for using a flat fee arrangement. A lawyer billing a legal department for leaving a voicemail.

“I’ve never gotten a six-minute phone message in my life,” said Sheila Murphy, associate general counsel at MetLife, speaking at a Legal Marketing Association event in Manhattan on Oct. 25. “That type of thing will drive me crazy.”

During a panel discussion entitled “Reality Check for Law Firms,” Murphy and two other in-house counsel dished on the good, the bad and the ugly of doing business with outside lawyers and firms. Alongside Murphy sat Courtney Robbins, assistant general counsel at Elizabeth Arden Inc., and Vincent Castiglione, general counsel of Coby Electronics Corp. Moderator Aric Press, vice president and editor-in-chief of Texas Lawyer parent company ALM, guided the discussion through billing preferences, pet peeves and what makes for a sound in-house/outside counsel match, having just penned “Why Clients Fire Firms” for sibling publication The American Lawyer.

None of the in-house panelists skimped on candor.

“Budget surprises will drive us insane,” said Castiglione. At Coby, he gets reviewed on project management, so he’s also looking to his outside lawyers to be good project managers. “We look like garbage when we have to go to our CFO, and say, ‘Oh, by the way. . . .’ “

Robbins agreed. Since the business team sets aside amounts in advance for big expenses, major surprises are a headache and make for uncomfortable discussions with the company’s business folks, she said.

Murphy chimed in with her dislike for late bills. When she gets an invoice three or six months down the road, it’s harder for her to evaluate the context. “We need almost contemporaneous bills,” she said.

All three in-house attorneys still use hourly billing with firms. But Castiglione says he needs to trust that the firm isn’t holding an inordinate number of office conferences, for example, nor loading associates onto matters.

He added that he’s perfectly willing to pay for first- and second-year associates on a case. “But they’ve got to really be monitored,” he said. In other words, if an associate spends 15 hours on a task that should have only taken three or four hours, he doesn’t want to see a bill for the extra time.

A firm’s responsiveness regarding billing for associate time can go a long way with in-house clients. Robbins once told her outside counsel that she didn’t think an associate was a good fit for a matter. In response, the firm told her she was the client, it was her decision, and the firm wouldn’t charge her for a new attorney to get up to speed. “When little things like that occur with ease, you remember that,” she noted.

Murphy and Robbins like to employ flat fee arrangements. Robbins, however, said implementing them successfully remains a “work in progress.” She told a story about the disappointing motion to dismiss submitted for her approval. She wound up telling the firm they shouldn’t have given it to her in that state, and the firm agreed she was right.

“My perception — right or wrong — was 100 percent effort wasn’t given to the product because of the flat fee,” Robbins said.

She has learned some good lessons from her experience with alternative fee arrangements. For a flat fee to work, both sides need to be crystal clear about what the product will entail, and she takes responsibility for laying out the expectations up front. “It comes down to communication,” she said.

Partnership and respect also emerged as important themes from the panelists.

Like her fellow presenters, Robbins said she chooses outside counsel based on the lawyer, not the firm. By and large, she asks other in-house attorneys for their recommendations first. And since she’s only selecting attorneys she already knows are qualified, she’s looking for a personality fit, and a willingness to partner with the in-house department.

After all, Robbins from Elizabeth Arden said, “I know what the company’s philosophy is.”

Ditto for Castiglione. He said an outside counsel delivers value when they get the job done in accordance with how the company thinks. “You’re married to your client,” he told the audience, “so they should know how you like to operate.”

Respect for junior members of a law department matters, too. Murphy said that when firms show some “tender love and care” to lower-level in-house attorneys, the attentiveness has influenced her outside counsel hiring decisions.

“At some point, a lot of these people are going to go up the chain,” said Murphy. “Don’t forget that.”