Additionally, determine whether the lawyer has the desired general skills.
For example, some lawyers (like some people) may be most skilled at negotiating, while others may be most comfortable doing research. Similarly, some may have stronger business skills than others. You should try to find a lawyer whose strengths meet your needs.
Another useful determinant of fit is how well the attorney understands your business. This measure is useful for two reasons. First, a lawyer who understands your business is more likely to recommend decisions in a manner supporting your business objectives. Second, the level of understanding a lawyer presents regarding your business can potentially serve as a measure for the level of client service you will receive. You may want to try to determine whether the lawyer has taken the time and made the effort to understand your firm. The answer to this question may yield a clue about the kind of service you can expect from that lawyer.
Yet another factor to consider is cultural fit. As most professional services providers know, cultural fit can be an important element of a successful relationship. This is especially so when selecting an important, sensitive position such as a lawyer. If the attorney moves too slowly for you or, on the other side, does not seem detailed enough for you, or seems to focus too much or not enough on business matters (as opposed to technical legal matters), you may become dissatisfied. This may not indicate a weakness on the part of either the lawyer (or law firm) or you as much as a different cultural orientation.
You also should consider what size law firm you want to work with. You will have to determine how much big firm bureaucracy you can tolerate and
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balance that against how complete a solution you would like to have in one place. Larger law firms are, by their nature, more bureaucratic and, therefore, potentially less responsive than smaller firms. For example, it may be more difficult to persuade a larger firm to show f lexibility on fees because the lawyer may have more procedures to go through before he or she can agree to a billing approach that is outside standard firm guidelines. This is not necessarily a negative characteristic of large firms, but rather an observation on organization size. And this principle may apply to firms of any type, not just law firms. On the other hand, a larger firm may be more likely to be able to provide a more comprehensive solution to your legal issues. You may decide the reduced complexity and increased consistency provided by a larger firm outweighs the disadvantages.
It is also worth noting that these needs may vary over time. As a firm grows and its business and staff change, its legal needs and requirements change as well. As with any service provider or vendor, the legal relationship should be reviewed from time to time to ensure that it has remained productive and appropriate.
Conducting the Selection Process
Once you have determined what criteria matter to your firm, you will have to go through the actual process of engaging an attorney. The lawyer you hire will probably play an important role for your company, so the process you use should ref lect that. This section provides a few suggestions you may find useful when conducting your selection process.
TREAT THE PROCESS AS IF HIRING AN EMPLOYEE.
The process of hir-
ing a lawyer should share many of the steps most firms use to hire senior employees. Ideas you may find helpful include:
• Review each candidate’s resume and track record.
• Check references. Good sources of references may include current or former employers and clients.
• Conduct a diligent interview process. Too often lawyers get off easy in an interview process with prospective clients because of their unique (and sometimes intimidating) knowledge; do not hesitate to ask lawyers the tough questions.
• Do independent research of the lawyer or firm. Two places to start are the firm’s web site and the legal resource site Martindale-Hubbell
(www.martindale.com).
GATHER CANDIDATES FROM A VARIETY OF SOURCES.
As you con-
sider which lawyer or firm to engage, try to take the time to consider a variety of candidates. Candidates may come from many sources. One good
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way to identify quality candidates is by asking for referrals from people you know and trust. Another potential source of candidates is industry sources.
Some useful industry sources may include, for example, other firms in your industry, lawyers you heard of in the context of doing good work on an industry-related matter, or attorneys who publish relevant articles or speak at industry events. Yet another source of potential candidates is the recommendation of other lawyers. Other lawyers can be especially helpful if they have worked with you in the past or know your business well.
CONSIDER AN IN-HOUSE COUNSEL.
One act that can make a tremen-
dous difference is hiring in-house legal counsel (or general counsel). An in-house lawyer can address a significant amount of your legal-related activities, thereby providing you with extra time to focus on other things. Further, if you have a high enough quantity of work, having legal work done in-house can save money. The benefits an in-house lawyer provides should include, among other things, improved ability to:
• Select outside attorneys when necessary.
• Evaluate fees.
• Distinguish among different firms based on skill sets (when selecting outside counsel for discrete projects).
• Identify legal issues that need to be addressed.
Additionally, you may improve your firm by having an in-house attorney execute some projects you might find are impractical to execute with an outside firm. These projects might include, for example, completing a whole set of form documents (reviewed by outside counsel) or developing a firm negotiating strategy for engagement contracts.
Your in-house general counsel should be a strong generalist with an extensive set of contacts in the legal community and good general business sense. You should not expect an in-house lawyer to handle everything. For example, if the firm confronts some very large, customized agreement or transaction (e.g., a complex licensing agreement), the in-house lawyer will probably need to bring in an outside attorney who specializes in that area.
The in-house attorney, however, should be proficient in identifying and retaining specialists as needed. Finally, if a general counsel is effective, it is likely that over time he or she will become more involved in firm business activities, especially administrative matters and general firm strategic decision making.
The disadvantage to hiring an in-house counsel may be cost. Ultimately, to decide whether to hire an in-house counsel, the firm must do the math. Look at the firm operating history, and try to adjust for what has traditionally been missed that would be caught going forward. Bear in mind, however, that this
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analysis is complex. On one hand, the firm will probably get better advice on a more rapid and f lexible basis. The in-house lawyer should be able to catch and address more legally related issues early. For example, he or she may be of assistance in identifying and resolving disgruntled employee issues, dealing with auditors, preparing for fund-raising, and so on. Also, you may end up having fewer issues that warrant legal attention, but previously had not received it, due to simple luck. For example, bringing in an in-house counsel may result in fewer contracts being signed without adequate legal review. All these matters, and whatever else is relevant to you, should be included in your analysis. The Risk Management chapter (Chapter 14) of this book discusses the process of analyzing the trade-offs around such business risks.
Managing the Relationship
with Your Lawyer
Managing the relationship with your lawyer is an area where clients often fall short. In this section of the chapter, we look at some ideas for managing the relationship with your lawyer more effectively.
Defining the Relationship
Once you have selected your lawyer, you should spend some time clarifying the nature of the relationship. This part of the chapter provides some ideas for defining your relationship with your lawyer.
ENGAGEMENT LETTERS.
Many law firms require their clients to sign an
engagement letter before starting work. Frequently, however, the engagement letter is focused on issues that are of primary importance to the lawyer.
For example, the engagement letter is likely to discuss what the lawyer will and will not be responsible for rather than the guidelines for how the lawyer will perform. You can use the engagement letter to cover items that are of primary importance to you. It may be useful to look at the engagement letter as a master services agreement. Different professional services firms care about different things, so we are not suggesting there is a specific way for you to structure your engagement letter. We note, however, a few areas that you may want to cover.
Generally, your engagement letter should cover how the ongoing operation and communication between your lawyer ’s firm and your firm works. Ultimately, to determine what is covered, you will have to cover what is important to your firm. One useful approach may be to start by looking at the master services agreement your firm uses with other professional services providers.