When using outside counsel, most companies, especially those that have affiliates or subsidiaries, need a comprehensive approach. Unfortunately, many companies hire law firms on a case-by-case or ad hoc basis. Sometimes divisions of the same company hire different law firms without thinking about potential issues of legal talent and failure to obtain high-quality legal services on a consistent and reasonably priced basis. Sometimes, divisions of the same company hire different law firms to handle similar legal issues or litigation.
If a company has an in-house Law Department, it is incumbent upon the in-house Law Department to develop processes to select and use outside counsel on a consistent basis with a focus on quality, reasonable fees, and, of course, success. Such success is normally the result of a long-term relationship in which outside counsel becomes a member of the company’s “team,” learns the business, and can, therefore, provide timely legal and business advice.
A company either has in-house counsel or it does not. To successfully handle legal issues facing most companies these days (especially those involving litigation ), the use of outside counsel must be centralized. If a company has many divisions or subsidiaries, a department should be empowered to oversee all legal matters. There are numerous advantages to centralization of the legal function:
Advantages of Centralization
-One organization has an overview of all legal issues confronting the company and can properly advise management on legal issues.
-Efficiency: Whether in-house or outside, efficient and fast response to legal issues is necessary.
-Use of a single law firm as outside general counsel can result in monetary savings.
-Centralization of legal services lends itself to the centralization of the company’s legal records, documentation, and information, creating a more efficient process.
-Centralization of legal services allows for a more efficient review of data, resulting in the proper use of information and development of an appropriate strategy.
-Investment: Whether a company is large or small, it needs to look at use of outside counsel as an investment. Picking the right outside counsel and developing a long-term relationship with such counsel will pay dividends in the long run.
Efficient and timely use of outside legal services, whether such use of outside legal services is picked by an in-house lawyer or by a company manager or officer, relies on whether outside counsel is the right fit for the company. There are many law firms around, but not all are the right fit. Picking the right law firm or outside counsel depends on a number of factors. Many times, a company picks a law firm because of a personal relationship between a company officer and a lawyer in the firm. Or maybe the firm has done a good job in advertising. The trouble is, without going through a process to determine the acceptability of a law firm, picking outside counsel can be hit or miss. A centralized legal function is necessary to avoid mismanagement of outside legal counsel.