Every company needs the services of outside counsel at some point of time or the other. Many companies do not have a regular in-house counsel and engage outside counsel as and when required, while some others, who have their own in-house counsel, hire outside general counsel services for specific legal issues. Managing your relationship with the outside counsel can be quite challenging. There are many aspects that have to be taken care of. Companies, therefore, issue outside counsel guidelines, or OCG, to manage this relationship. These guidelines vary by company, and sometimes run into pages. However, longer, more detailed guidelines doesn’t always mean better. A more concise and precise guideline is more useful as it is easy to implement for both the parties. The guideline is most useful in the billing process, and should cover this aspect in detail. This article highlights few important points that need to be covered to make the relationship with the outside counsel smooth and congenial.
The Actual Guidance
Let the outside counsel guidelines be just that-a guideline, and not a catalogue of demands from the in-house team. It is often seen that the in-house legal team keeps on changing and adding to the outside counsel guidelines based on their experience of dealing with the outside counsel over the years. This, in fact, is to prevent the maltreatment the company might have suffered in the past. As a result, the guidelines become longer and longer which makes it difficult to interpret and becomes less effective. Therefore, for the guidelines to be effective, it should be instructional as to what should be expected from either party. The parties should agree to the processes outlined and must be on the same page. It is not a contract, but only outlines the processes that need to be followed to keep the relationship going. Therefore, while formulating the OCG, focus on guidance and describe the role of the outside counsel and how following the guidelines would improve or maintain good working relationship.
The most important aspect of OCG is invoicing. How your company would want to be invoiced by the outside counsel should be described in no uncertain terms. The frequency and format of invoicing should be clearly mentioned. Items that are to be included in the invoice should also be detailed. You also need to specify the time an invoice would be paid. Besides, you must mention the conditions under which you can reject or reduce an invoice. For instance, some OCG contain a clause where the company has the right to reject an invoice if it is sent 60 days after the completion of the work. This is important to manage your legal spends. If you have an automated invoice processing and use software, such as simple legal, then invoices can be automatically rejected or flagged under the set circumstances. Outside firms are usually used to invoices being adjusted or rejected, but a clear guideline on such conditions help in maintaining a cordial relationship.
Designated Supervising Attorney
A dedicated supervising lawyer to coordinate with the outside general counsel services helps in maintaining the relationship at a satisfactory level. It gives the outside counsel a designated point of contact and the coordination between the two becomes much easier, which ultimately results in increased efficiency and productivity. Designating a lawyer for a supervisory role would mean that all documents, invoices, case files, etc., will be available with a single person. Concentrating all communication to a single source would reduce the chances of anything getting lost and save a lot of time in locating documents. The OCG should help you direct the required information and processes to that person. The easier and simple you make the process, better it would be for the outside counsel to adhere to it.
Forecasting the Budget
Another area of importance is the budget forecast timeline. The outside firm should submit a budget forecast to help you manage the accruals. Your OCG should state a time frame within which the outside counsel must submit a detailed budget forecast for a new project, so that you can plan accordingly. These guidelines work both ways, so make sure you set a deadline in such a way that your in-house team gets enough time to review and approve it. Clear and acceptable deadlines reduce the chances of any conflict, and finalizing the budget becomes easier.
Include a Summary
You may have a very well-crafted OCG, but it will serve the intended purpose only if the outside firm’s lawyers read them thoroughly. Usually, outside general counsel services firms do not bother to go through the OCG if they are too long, and they also think that most OCGs are more or less same. It is, therefore, important that you include a solid and compact summary, so that the outside firm reads it and tries to abide by it. Begin the OCG document with an overview of the key points that would outline the major contents of the guideline.
The outside general counsel guidelines are key documents that help maintain a cordial relationship between the company and the outside firm, so it is very important that you pay particular attention while formulating them.
I am Amy Johnes, a legal expert at Ahlawat & Associates – one of the best law firms for corporate secretarial services India.