Biglaw, Billable Hours, General Counsel, In-House Counsel, Money

Inside Straight: Inflating Your Own Outside Legal Spend

Years ago, I handled a pro bono case for a client unable to afford legal services. (I actually handled a fair number of pro bono cases, but I’m choosing to describe just one here.) The client was a very nice guy, and he desperately needed legal services. But he had no idea how to use a lawyer cost-effectively and, because he wasn’t paying for my services, he had no incentive to restrain himself. The guy called incessantly, asked endless questions, and was always trying to schedule meetings with me. I mentioned the situation to one of my senior colleagues, and the colleague’s reaction was immediate: “What that client needs is a bill.”

During the decades when I served as outside counsel representing clients, I noticed that some of my clients permitted me to do their work efficiently and others affirmatively obstructed that effort. Now that I’m an in-house lawyer, I’m thinking about the other side of that coin: What should I, in my role as client, do to permit outside counsel to represent me efficiently?

I’m not thinking here about the basics of retaining and supervising counsel. I’m thinking about other stuff. After you’ve picked a good lawyer, negotiated a good fee deal, arranged for appropriate staffing, and reviewed the budget, how can you still unnecessarily inflate your costs?

Let me count the ways.

First, you can insist on formal written memos where an informal phone call would suffice. Outside counsel will be honest with inside lawyers they trust. When I was at a firm, inside counsel would often ask me, for example: “Of these thirty cases that all resemble each other, which are the dangerous ones?” And I could answer in a heartbeat that cases A, G, M, and Y were keeping me up at night, and the others not so much.

If that’s enough, then outside counsel has efficiently answered your actual question. But go one step further, and you’re inflating your legal bill: “Could you give that to me in writing?”

Outside counsel just got expensive. If outside counsel is preparing a document that’s getting stored in a file, to be used against the firm when things go unpredictably badly, then outside counsel must (intelligently) play self-defense. It’s not good enough to sit down at a keyboard and crank out in five minutes the advice about cases A, G, M, and Y that you just provided orally. Now you’re forced to have people review each of the files, find the specific points of distinction between the cases, and do things up right. If, as a client, you need that effort, then by all means request it. But if an informal response will suffice, don’t make things formal. Formality implies expense.

Second, as inside counsel, don’t fret the small stuff. As lawyers, we’re making endless decisions every day about how to handle particular matters. Some of those decisions really count: When we go to mediation, what will be our settlement authority? That’s the big stuff; fret it.

But we make innumerable decisions about things that really don’t matter at all. Those things may simply be insignificant: Should the deposition occur on Tuesday or on Friday? Who cares? Just set the thing.

Or those matters may be very significant, but utterly unpredictable: We could file suit in either Jurisdiction A or Jurisdiction B. Everything is identical except for the pool of judges. There are two good judges and two bad judges in Jurisdiction A and two other good judges and two bad ones in Jurisdiction B. Where should we file the complaint?

We could discuss that forever, if you were so inclined, but the advice wouldn’t change things. You’ll file the complaint; you’ll draw a judge randomly; you’ll be either delighted or dismayed. But good lawyering can’t change the odds, and long discussions won’t change the situation. Don’t fret about things when fretting can’t help.

Third, as inside counsel, don’t turn everything that’s on your desk into an emergency. The outside lawyer is probably handling many separate tasks for you. If counsel happens to mention one — we’re thinking about issue X — don’t go nuts: “Issue X! Now that you mention it, that’s a great issue! I should mention it to my boss, who should mention it to his boss! And we should do that immediately! Get me a memo on issue X by first thing tomorrow!”

Calm down. Some matters are urgent; some less so; some not at all. Let things proceed at appropriate paces. You’ll just inflate your bills if you insist on getting everything done simultaneously. And you’ll also learn less about your cases: If outside counsel realizes that anything that enters your line of sight will immediately become a crisis, then fewer things will enter your line of sight.

Fourth, distinguish between different forms of communication. Some events require in-person meetings. If we’re doing jury research, a bunch of people will necessarily all fly to a single location to observe the exercise. Some things cannot be done by phone.

But other things can be handled perfectly well by phone (or video conference). There’s big difference in cost between flying a lawyer into town for a one-hour meeting (which will run you round trip airfare, a couple of meals, and a whole lot more than an hour of time) and conducting the same meeting by telephone. If a personal meeting is essential, then have it. But if a phone call will do the trick, then don’t be silly.

Don’t turn yourself into an expensive client. Your outside firms aren’t representing you pro bono. They don’t need your conduct to jolt them into realizing that “you need a bill.” They’ll send you one every month, and it may be partly your fault if the bill seems a little high.


Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link). You can reach him by email at inhouse@abovethelaw.com.

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