'Biglaw Idol' -- Or, How In-House Lawyers Actually Select Outside Counsel
Picking a law firm for a seven-figure engagement can take under five minutes.
Over the course of the past month, our office has been debating which Biglaw firm to retain for a rather sizable engagement.
As a high-level overview of the facts, our hospital system is currently engaged in a dispute with one of our largest insurance companies. Under our interpretation of the contract, we should be reimbursed at a negotiated discounted rate of our fixed price for a particular service. Under their interpretation of the contract, they will reimburse us at a percentage of what Medicare pays for the same service.
If you are scratching your head at the above, you are not alone. It is rather wonky and an excellent illustration of why healthcare can be complicated. For the purposes of this article, however, you just need to know we had a material dispute in our contractual terms that we believe led to our being underpaid by more than $50 million over the course of the past few years.
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In my role, I have often been asked how in-house selects outside counsel for such engagements. While many think we have some formal decision making process in place, in my organization, the decision ultimately comes down to a few in-house colleagues quickly discussing before deciding whom to select.
Not convinced? The below is a near-verbatim transcript of a recent huddle where we decided who we would retain for the case in question.
General Counsel (GC): Well, given the size of this, I think there are only five firms in town I would turn to. Since this involves contract terms on a healthcare matter, I would eliminate Biglaw 1 and Biglaw 2 out of the gate since their healthcare practice is virtually non-existent. What do you think?
Counsel 1: Very much agreed, ma’am. Only Biglaws 3-5 could really handle this matter.
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Counsel 2: I agree, but also keep in mind Biglaw 3 has a large office in the same city where the insurance company is headquartered. They may not have a conflict in our state, but I am not sure I would trust them with this one.
GC: Great point, that leaves only Biglaw 4 or 5. Biglaw 5 has always done good work for us, but they charge New York City rates. Is it worth it in this matter?
Counsel 2: Given the size of the dispute, I think it is, but I called over there last week to see if they had a known conflict and I am still waiting to hear back. You would think they would have an answer a little faster given the size of the potential engagement. I haven’t even gotten a text from them or an update letting me know the status.
GC: Really? Look, if we are going to bring someone on board for the next year or so, they have got to earn our business. Has anyone reached out to Biglaw 4?
Counsel 1: I talked with them yesterday, they followed up this morning and let me know they did not think they had a conflict, but that they would let me know by the end of the week. Their managing partner also called me this morning to thank me for considering them. He said he understood they may not be who we ultimately retain, but he appreciated the confidence we had in their firm for even considering them.
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GC: Wow, Managing Partner called? I passed over his shop a few months ago in favor of Biglaw 2 and thought he was still mad at me. I am impressed he called. Look, if we can’t get an answer from Biglaw 5 and Biglaw 4 is ready to go — I am signed-off, bring in Biglaw 4.
And with that, in the span of no less than five minutes, a several-thousand-hour, seven-figure Biglaw engagement was decided.
Sure, expertise in the area was important. And unfortunately for Biglaw 3, sometimes you can’t help where you are located — but at the end of the day, showing an interest matters. Making the extra call matters. Biglaw 5 acted as heir apparent to the engagement, which ultimately cost them.
Even if you are the clear frontrunner for a matter, make the extra effort. It’s the small things that get discussed in a five-minute huddle that can mean the most.
Stephen R. Williams is in-house counsel with a multi-facility hospital network in the Midwest. His column focuses on a little talked about area of the in-house life, management. You can reach Stephen at stephenwilliamsjd@gmail.com.
