On the Same Page? Outside Counsel Guidelines Help You Get There | Practical Law

On the Same Page? Outside Counsel Guidelines Help You Get There | Practical Law

This Legal Update highlights sample guidelines that in-house counsel can use to govern its relationship with outside counsel. These guidelines set out policies and procedures on legal fees, billing and expenses, conflicts of interest, budgeting, and preserving confidentiality and privilege.

On the Same Page? Outside Counsel Guidelines Help You Get There

Practical Law Legal Update w-001-4908 (Approx. 3 pages)

On the Same Page? Outside Counsel Guidelines Help You Get There

by Practical Law
Published on 03 Mar 2016 • USA (National/Federal)
This Legal Update highlights sample guidelines that in-house counsel can use to govern its relationship with outside counsel. These guidelines set out policies and procedures on legal fees, billing and expenses, conflicts of interest, budgeting, and preserving confidentiality and privilege.
When companies retain outside counsel, they often distribute guidelines setting out the policies and procedures governing their relationship. These guidelines help set expectations between in-house and outside counsel before any work begins and ensure that legal matters are handled in a cost-efficient manner. They also help build a trusting and cooperative relationship between in-house and outside counsel.
Outside counsel guidelines typically address (among other things):
  • Budgets. To help control and track costs, in-house counsel should require a budget before the start of each matter or at least those matters that are expected to exceed a specified dollar amount. The budget should provide a certain level of detail so that in-house counsel can track the costs of each task and project costs going forward. The guidelines may also specify whether the company would like periodic status reports and budget updates.
  • Legal fees. Outside counsel guidelines generally require the parties to agree on legal fees before the start of each matter. The guidelines may address any expected, negotiated discount in legal fees. The company may also require:
    • that the hourly billing rates stay the same for the duration of a matter; or
    • its prior approval in writing before outside counsel raises their rates.
  • Expenses. The guidelines generally set out which expenses the company reimburses and which expenses it does not. Reimbursable expenses typically are those expenses that outside counsel pays out of pocket, including, for example:
    • large photocopying or printing jobs;
    • overnight and hand delivery messenger services;
    • long distance land-line, mobile or conference calls, or outgoing facsimiles; and
    • outside consultants, vendors, and experts.
  • Staffing. Outside counsel guidelines can help in-house counsel control legal fees by setting parameters for staffing legal matters up front and avoiding disputes during a matter about how it is staffed. Many guidelines specify that work should be performed by individuals at appropriate levels so that overqualified, more experienced lawyers are not doing work that can be performed by a more junior lawyer, or a non-lawyer, at a lower billable rate.
  • Conflicts of interest. There are many sensitivities to outside counsel's handling of matters in conflict with the company. A company generally will not retain counsel who, at the same time, also represent parties adverse to the interests of the company, its parent, or its affiliates. The guidelines may address whether the company will waive conflicts on a case-by-case basis.
For further consideration of these topics and sample guidelines, see Standard Document, Outside Counsel Guidelines. For additional guidance on effective partnerships between in-house and outside counsel, see Working Effectively with outside Counsel Checklist.