As might be expected, Edward Knight, the executive vice president and GC at Nasdaq, has lots of friends at law firms.

Before joining Nasdaq in 1999, Knight was a partner at Akin Gump Strauss Hauer & Feld and served as the general counsel of the U.S. Department of the Treasury. But when it comes time to pick outside counsel at Nasdaq, he doesn't rely on the coterie of attorneys he's befriended through the years—he leaves those choices to a committee.

Read more: Who Represents America's Biggest Companies?

Roughly two years ago, Nasdaq created a committee of roughly a dozen in-house attorneys to consider outside counsel, according to Knight.

“A lot of times we weren't retaining that many law firms, so it wasn't something that we needed to form a process on,” Knight says. “But as the company is getting bigger, we decided that we wanted to have a more firm process. The amount of money being spent is not insignificant. We wanted transparency on decisions. I have a lot of friends in law firms. I spent 14 years myself at a private law firm,” he adds. “I wanted to make sure we removed any subjectivity from decision-making.”

While the company has its own in-house legal team of roughly 100 lawyers, Nasdaq uses outside counsel for complex litigation and transactional matters. Law firms are selected either by the committee of lawyers at Nasdaq or through a request for proposals, more commonly referred to as an RFP, which solicits proposals through a law firm bidding process. Nasdaq primarily uses RFPs in “areas where we have more paperwork,” Knight says.

“There's the litigation area and transactions, those are two big areas for a public company,” he says. “We have used both RFPs and also, once we have worked with firms that have been successful at litigation … then we will come back to them.”

So how does a massive company such as Nasdaq, which lists more than 3,600 companies with a total market value of $9.6 trillion and has more than 10,000 corporate clients who purchase Nasdaq's corporate products, handle it's legal bills? It uses the internet. Nasdaq uses the electronic billing program formerly known as Serengeti Tracker, now known as Thomson Reuters Legal Tracker. The web-based software is used by hundreds of law departments to manage their invoices, budgets and documents from outside firms.

While Knight declined to say which law firms the second-largest stock exchange most often retains as outside counsel, it's clear that when Nasdaq likes a firm's work, it will continue the relationship. “We feel that understanding is absolutely critical. We're looking for a certain result, and if they get results, we feel like we owe it to the firms that are involved [and] we want to continue to work with them,” Knight says.

When choosing a firm to work with, the committee of lawyers at Nasdaq, which meets on a monthly basis, looks to firms that can handle and “understand the uniqueness at Nasdaq,” notes Knight, but the committee also puts a premium on firms that have a diversity program.

As might be expected, Edward Knight, the executive vice president and GC at Nasdaq, has lots of friends at law firms.

Before joining Nasdaq in 1999, Knight was a partner at Akin Gump Strauss Hauer & Feld and served as the general counsel of the U.S. Department of the Treasury. But when it comes time to pick outside counsel at Nasdaq, he doesn't rely on the coterie of attorneys he's befriended through the years—he leaves those choices to a committee.

Read more: Who Represents America's Biggest Companies?

Roughly two years ago, Nasdaq created a committee of roughly a dozen in-house attorneys to consider outside counsel, according to Knight.

“A lot of times we weren't retaining that many law firms, so it wasn't something that we needed to form a process on,” Knight says. “But as the company is getting bigger, we decided that we wanted to have a more firm process. The amount of money being spent is not insignificant. We wanted transparency on decisions. I have a lot of friends in law firms. I spent 14 years myself at a private law firm,” he adds. “I wanted to make sure we removed any subjectivity from decision-making.”

While the company has its own in-house legal team of roughly 100 lawyers, Nasdaq uses outside counsel for complex litigation and transactional matters. Law firms are selected either by the committee of lawyers at Nasdaq or through a request for proposals, more commonly referred to as an RFP, which solicits proposals through a law firm bidding process. Nasdaq primarily uses RFPs in “areas where we have more paperwork,” Knight says.

“There's the litigation area and transactions, those are two big areas for a public company,” he says. “We have used both RFPs and also, once we have worked with firms that have been successful at litigation … then we will come back to them.”

So how does a massive company such as Nasdaq, which lists more than 3,600 companies with a total market value of $9.6 trillion and has more than 10,000 corporate clients who purchase Nasdaq's corporate products, handle it's legal bills? It uses the internet. Nasdaq uses the electronic billing program formerly known as Serengeti Tracker, now known as Thomson Reuters Legal Tracker. The web-based software is used by hundreds of law departments to manage their invoices, budgets and documents from outside firms.

While Knight declined to say which law firms the second-largest stock exchange most often retains as outside counsel, it's clear that when Nasdaq likes a firm's work, it will continue the relationship. “We feel that understanding is absolutely critical. We're looking for a certain result, and if they get results, we feel like we owe it to the firms that are involved [and] we want to continue to work with them,” Knight says.

When choosing a firm to work with, the committee of lawyers at Nasdaq, which meets on a monthly basis, looks to firms that can handle and “understand the uniqueness at Nasdaq,” notes Knight, but the committee also puts a premium on firms that have a diversity program.