4 Things You Can Do to Get the Most from Outside Counsel
Maximizing outside counsel performance is part trial and error and part effective management. Whether you are just starting with law firms or have dozens (if not hundreds) of vendors, here are four things your legal ops team can do to get the most from outside counsel partners.
1. Determine if the Vendor is the Right Fit
Not every applicant is the right fit for the job. The same goes for vendors. Finding the right fit is just as important when hiring outside vendors as it is when you hire in-house staff.
Ideally you’ll want to think about the following before you get started:
- How long has this vendor been in business?
- Does this vendor have positive reviews or references?
- Has this vendor handled similar matters in the past?
- What was the success rate for similar matters?
- How quickly was the matter closed?
- Does this vendor fit within the budget?
- Is the vendor open to alternative fee agreements?
- Does the vendor’s culture align with the business’s?
- How can the vendor help the business achieve its objectives?
And don’t forget, it’s never too late to reevaluate current vendors. The above criteria are a great starting point to understand if a vendor is continually meeting your needs and expectations.
2. Use AFAs (Alternative Fee Arrangements)
AFAs are a hot topic in the legal community and empower companies through transparency and predictability. This alternative to traditional hourly billing emphasizes perceived value and should be based on what both the outside firm and the client feel is fair and reasonable.
There are different types of AFAs including flat or fixed fees, task fees, percentage fees, or contingent fees. There are also hybrid AFAs. What agreement works best will depend on the type of work as well as the vendor completing the work.
3. Implement Legal Operations Software
When working with multiple vendors, legal operations software can help you improve vendor quality control, providing you with the visibility and insight needed to determine if your outside counsel is a reliable partner that compliments your in-house team.
Your legal department will also enjoy greater transparency into spend. Legal departments that use a legal operations platform with e-Billing capabilities can see exactly where every dollar of their budget is going. Armed with this information, you can identify cost-saving opportunities with your vendors and improve efficiency as well as productivity.
4. Ask Your Team What They Think
Ask in-house team members, including counsel, legal ops, the administrative team, and any internal stakeholders that work with outside vendors, to evaluate your outside firms on a number of criteria. The results will help you identify pain points in vendor work and relationships that need to be addressed. The results can also act as benchmarks to measure against at a point in the future.
Don’t know where to start? Here are a few areas that your team can rate outside counsel on:
- Product quality
- Communication style
- Culture fit
- Overall alignment with business goals
- Matter skill level
- Matter outcome
- Adherence to billing guidelines
- Timeliness of invoicing
Shoot for Long-Term Success
Optimizing outside counsel performance isn’t a one-and-done project. In addition to using data and KPIs, regularly assessing outside counsel performance can help legal departments determine which vendors provide the most value, discover opportunities to increase productivity, and cut ties with firms that fail to act as a trusted, long-term partner.
For additional tips and strategies for effective law firm management, download our white paper, The Basics of Vendor Management and learn the 5 essential steps for starting a vendor management program.