When Mortgage Connect Chief Legal Officer Meghan Rolla needed work done on a small M&A deal, she told her outside counsel that she didn’t expect a big bill. “Their answer to that was, ‘I’ll still use two partners, but I’ll ask Meghan to do all of this associate level work.'”
Needless to say that was not what Rolla meant, and it was one reason she stopped using tghe firm.
“When I say I want to keep the cost down, that doesn’t mean give me the work to do. I didn’t think that had to be said, but apparently it did,” Rolla said.
This was one of several experiences in-house legal leaders shared at a panel discussion on the “secret sauce” of in-house and outside counsel collaboration at the recent Women, Influence & Power in Law conference in Chicago, where Rolla’s story drew knowing laughter from the audience.
Setting expectations for outside counsel from the outset is a critical part of the recipe, said Carmen Hernandez, general counsel of engineering, architectural and construction firm Clayco.
Hernandez said she tells her outside counsel what she expects from a litigation matter in the first phone call. Sometimes it’s a case that should be dismissed on statute of limitations grounds, and she wants her law firm to focus on that outcome through a summary judgment motion to avoid trial and the cost of discovery, with the caveat that things could change.
She also wants to know how she expects the firm to staff the matter, “and then update me, quartley, not weekly, and let me know if anything changes.”
That’s an easy one, Hernandez said. Things can get a bit more complicated if there’s a sensitive employee issue where an outside law firm needs to come in to conduct interviews in a business unit.
Hernandez said she wants someone sensitive and business oriented to conduct those meetings, not someone who is going to come in and interrogate employees in a “Law and Order” style that would only inflame the situation and put people on the defensive.
“What we really want is a conversation,” she said. Hernandez said she wants outside counsel in that situation to understand that their role is to “make sure people are understanding the messaging about what our corporate culture should be, and that when people see situations that happen that are not in accordance with that, that they report it, or that they feel empowered to report it, and that they feel that they’ll be protected and sharing their thoughts and views.”
Outside counsel should also be embedded in their client’s business, and understand how it operates. This can be as simple as knowing the company lingo, said Susan Tvrdy, managing counsel for litigation for Wayfair.
For example, a company might call its employees “associates,” or may refer to HR as “talent management.” Tvrdy said outside counsel should be curious about this. “I work a ton with our supply chain and our warehouse associates, a very strong blue collar workforce. And within those warehouses they all have their own lingo, which is hard for me, who visits them regularly, to understand,” Tvrdy said.
She said she likes to have outside counsel tag along on tours of the warehouse. “This is business development. You’re investing in a relationship. You’re learning how things function, why decisions get made the way they do get made, and why certain things are a priority for your clients, and why they aren’t.”
Nia Jenkins, vice president of legal affairs and deputy general counsel at Surescripts, said she appreciates outside counsel who can help her build the company. “As much as I want to be on top of all things, we all have lives,” Jenkins said.
She explained how valuable it is when her outside attorney notices things on calls, for example if the product team is not fully grasping pricing mechanics. “That’s a light bulb moment for me,” she said. “Now I can provide more value by talking to my colleagues about how we can assist in training or development with our product team.”
One of the most frustrating things an in-house lawyer can hear from their outside counsel is a reticence to weigh in on things that aren’t purely legal matters.
Panel moderator Michele Kloeppel, a partner at Thompson Coburn, said it was a big issue for her when she was corporate counsel at Panera. “I had this one outside counsel where every time I’d ask him to weigh in, he’d be like, ‘That’s a business issue; that’s not a legal issue.’ But we all know things aren’t as cut and dry,” she said.
“When I was at company counsel, having somebody weigh with their opinion mattered to me, even if it was a quasi-business issue. Why? They’re educated. They know me. They know our company. They’re obviously smart; they’re doing our legal work, so I wanted to hear what they think.”
Tvrdy had a similar view. “Don’t be afraid to have an opinion first and then give us the options. I think the most frustrating thing for me will be just getting a list of options with some risk rating,” she said.
If outside attorneys are truly in the trenches with Wayfair, they would certainly have an opinion on what the best decision for Wayfair might be. “And if you don’t know what the best decision for Wayfair would be, you might not know your client well enough. You might not know their risk tolerance. You might not understand the internal dynamics. Or do they care more about bad press, or do they care more about setting a precedent or not settling. These are the factors you should learn and then give that opinion.”
The word “succinct” was frequently dropped throughout the discussion. “The more succinct advice you can give, the better,” said Tvrdy. When she asks for quarterly case assessments from firms, she said she prefers they be in bullet-point format. “When I say bullet points, I’m not lying. I’m not offended. If you don’t write a complete sentence, I can understand what you’re saying. And still, firms want to write me a 15-page memo when I’m not going to read it. I don’t have the time, I want to see what the major points are.”
Hernandez said she wants a “succinct summary that I can then turn on around and use.” A deep dive is always on the table, “but definitely put me in a position where I’m going to succeed by taking something that I can easily just copy-paste or forward. That’s what helps me in a fast moving environment.”
And above all, “don’t screw your client,” Jenkins said. She recalled a time when she was very clear with outside counsel that she needed their help pulling material together for a meeting with her CEO and chief financial officer about forming a subsidiary.
She gave them a clear timeline of two months to prepare for the meeting, but they still delivered the documents late and riddled with errors. “Just reading it, I’m seeing things that are wrong, and this is at maybe 7 o’clock at night. I ended up being up until two in the morning, pulling it together, fixing all kinds of errors. Obviously, we no longer work with them.”
Jenkins said she would have respected the attorneys so much more if they had said they didn’t know the issues involved and needed more time. “I would have respected that more than to have put me in that position. I will never forget that, and obviously there will be issues if our paths ever cross again in terms of working together.”
Hernandez said she appreciated when local counsel said a matter was out of its depth and recommended a bigger firm to handle an urgent and complicated project.
He then introduced her to the firm with the resources and expertise she needed. Hernandez said she still uses both firms. “I came away with a lot of respect for that, because he probably understood I was not going to be very tolerant once things went sideways.”