Q. I could use some advice for the following dilemma. I am general counsel of a publicly traded company and have been getting killed on fees by a major law firm that has close ties to members of our board of directors. We have been hit with a big piece of litigation and I would like to hire a small firm that I am confident will do a good job and will keep costs in line. I am having a hard time “selling” this to our CEO and suspect I would ultimately face a brick wall with the board, under the theory that this would not be a defensible hire. Any suggestions on how I could handle this?
A. This is a rather frequent question, although it normally is posited by small firm lawyers who are interested in knowing what they can do to surmount this hurdle. Before answering the question, though, I would like to offer a few thoughts on the vexing relationship with the large law firm and the related fee issue.
Many general counsel inherit law firms that are well connected with their companies, including many they would not otherwise hire if the decision were their own. Savvy outside counsel in such situations do not take the situation for granted and are thus loath to in any way pile on the fees. Rather, they realize that CEOs come and go, and the composition of boards also can change in a heartbeat.
They are aware that forming a good relationship with you is rather important, as that may pay dividends now, and down the line, should you change companies. It behooves you not to approach the relationship adversarially; rather, spend the time to get to know your outside counsel well. In many cases that I have explored, where inside counsel have complained about excessive fees, I have found that the problem often stems from the in house lawyer not clearly identifying the objectives, cost parameters, and manner in which outside counsel is expected to act.
It is important for you to make that effort, as it will provide you with cover, with your CEO, and the board, if your outside counsel subsequently still does not meet your needs and you eventually have to make a change.
As to hiring the smaller firm, urge your primary contact in that firm to help you “make the case.” You should get a list of similar cases (to the one you have pending) that the lawyer’s firm handled. Make sure you are apprised of how much was at stake, the names of other counsel in those cases (especially if they are major firms), and the results that were achieved. You should also have detailed information on those who would comprise the team and why each person would be a valuable contributor to the team.
If you can show that the firm has done exceedingly well in similar cases, has frequently gone head to head with major firms, has represented companies as big, or bigger than yours, and will be able to come well within your budget, you should be able to make a compelling case. You can also note that quite a few Fortune 100 companies, which have pared their outside counsel lists to a select few, have included boutique and smaller firms, which could resonate with your board.
You should be prepared, though, to accept that there will be limited situations where you are not going to be able to hire a smaller firm. True “bet the company” litigation, or significant merger and acquisition or investigatory matters, for example, often cry out for retaining a marquee firm. In such matters, you may need to send a very strong signal to opposing counsel that you can match their firepower or have to let the government know that you will be digging in for a long battle.
In such cases, a much bigger firm may be your answer. Just remember that, despite the circumstances, your outside counsel should not have carte blanche. It will be up to you, and to members of your staff, to lay out your objectives and to actively be involved in the matter.
Q. I went to a good law school, but it falls outside of what is considered a “Tier 1″ school. I am concerned that this may inhibit my ability to move to a larger law firm some day or to go in house. I am a litigator and am considering getting an LL.M in trial advocacy. Do you think this will be worthwhile from a career standpoint?
A. I am reluctant to ever dissuade anyone from obtaining more education, as this can only be a help to you. I thus think that if you were to obtain such a degree, you should emerge as a better trial lawyer. However, I do not feel that this is the best use of your time, and money, at least with the objectives in mind that you have mentioned.
Unless you are in a firm where you are getting no courtroom experience whatsoever, you should have ample opportunity to build some core skills, in depositions, oral arguments, and in arbitrations. Your firm will hopefully provide you with the chance to attend NITA or similar programs that will focus on courtroom skills.
If it comes time for a lateral move, an LL.M. in trial advocacy will have virtually no impact on a corporation, as you most often would be hired to manage litigation. If you were to go to another law firm, more attention will be paid to your accomplishments to-date, and, depending on your seniority at the time, the book of business that you have built or are building.