How Outside Counsel Can Build Better Bonds With In-House Clients
Two experienced general counsels explain their formula for how outside counsel can establish, sustain, and grow the critical relationship with the general counsel and the in-house team.
October 29, 2019 at 01:30 PM
9 minute read
For outside counsel, the fine art of building a strong and enduring relationship with their general counsel and in-house counterparts, is equal parts experience, common sense, and endurance. Done correctly, the rewards for lawyer and client alike are considerable—and will significantly expand in proportion to the strength of the bond between the two.
In the absence of a formal law school curriculum focused on client relationship development and management, outside counsel are often left to adopt ad hoc strategies and solutions as they advance through their careers. Not surprisingly, many of these reflexes are shaped by the practices of the partners that outside counsel worked with as associates—even though those lessons may not take into account the changing dynamics and demands that in-house clients face today.
Indeed, as experienced general counsels—a current general counsel of a European listed luxury goods company, which owns a number of the world's most valuable brands, and a law firm partner, who is the former general counsel of the Fortune 200 company that was the world's first-ever billion dollar company—with decades of experience hiring and replacing outside law firms, we believe there is a simple formula for how outside counsel can establish, sustain, and grow the critical relationship with the general counsel and the in-house team. Outside counsel should consider the following:
- You Don't Have to Be a Fashionista to Represent a Fashion House – The value of a true counselor begins with her or his immersion in more than the four corners of the client's current legal matter. By way of example, start-up technology companies move at a pace that would make a more traditional company cringe, yet the general counsel (and, thus, outside lawyers) need to facilitate that speed and align their work and teams accordingly. Understanding the unique demands of each client's CEO and C-suite partners, board of directors, investors, and the full panoply of stakeholders will enable outside counsel to better walk in the shoes of the general counsel, and helpfully anticipate their needs. While you don't have to feign excitement about your client's industry or product, you should know what is important to them and what innovation and creativity in their sector looks like.
- Don't Serve Pepsi When Coca-Cola Comes to Visit – Understanding a client's unique corporate culture and reflecting that culture when dealing with the legal team sends a strong message that you are aligned with them and with their needs. Does the general counsel want a 40-page legal memo, or will an executive summary and practical recommendations be more appreciated? Does the client have a more formal workplace, or has it embraced a WeWork-type of culture, with open floorplan seating? Success comes from making sure you understand your client, their culture, their needs—and that your work styles mesh.
- Show You Care – Pressure, deadlines, and competition being what they are today, those outside counselors who mark their performance by beating deadlines, exceeding expectations, and delivering the very best work they can will be recognized and rewarded. In-house clients need to feel and see that they are the firm's top priority (including being staffed by those best suited to the matter). Needless to say, being consistently available in a crisis situation—be that on a weekend, holiday, or even your vacation—will long be remembered and appreciated. However, not everything is a crisis, and outside counsel should feel free to ask when a project needs to be completed. A good general counsel won't make outside counsel work 24/7 when it is not necessary, especially because they know the relationship and resources are there to provide surge capacity when needed.
- Ensure You Are Part of the Circle of Trust – Often, general counsels have a need for a close cadre of confidants, a type of "Kitchen Cabinet" of peers sought for their judgment, integrity, and expertise. Access to this level of trust is built over time through a commitment to stay in touch (especially when there is no ongoing engagement), share thoughtful articles and notes, and offer analysis of issues worthy of tracking more closely. Contact is cumulative, and through it outside counsel can solidify their commitment (and subtly ask for business without the need to be that direct). Confident outside counsel will add younger partners and capable associates to their periodic outreach to clients, to enable the general counsel to get to know and trust them and promote appropriate succession planning.
- Walk the Talk – Yes, diversity is important, and in our experience that means an engagement team that is customized to our specific issue, and brings together a varied team with assorted professional, educational, and personal experiences. Cosmetic efforts at diversity are too often threadbare and do not deliver effective results for either party; with talent widely available in 2019, this approach is antiquated and ineffective. Moreover, an effort to pass off a facade as a diverse team will call your judgment into question in the mind of the general counsel, who will see through this effort instantly.
- Become Part of the Family – Consider whether you can partner with your client on matters that are outside the pure legal sector. While you may be happy to buy a table at a charity event honoring your client's CEO, it might also be helpful to work with the general counsel to organize a pro-bono partnership that provides opportunities to bond, as well as to further the client's goals for corporate and social responsibility. And consider offering to mentor younger members of the client's legal team. Eventually, joint speeches and articles can do wonders to solidify this relationship and will prove beneficial to all.
- Be a Mind Reader– No company operates in a silo or without vibrant competition. A data breach at one cloud computing provider, for example, should track into a detailed analysis and set of recommendations for your cloud computing client, even if they were not immediately involved. More than just standard due diligence, this type of farsighted thinking demonstrates a promise of care for your client, and doing so will help make them look smart to their C-suite colleagues. As a practical matter, that also means digging into sell-side analyst reports, SEC filings, and other sources of information on companies in your client's industry. The fewer phone calls a general counsel has to make and emails they have to read to find the information they need, the better. An outside counselor who saves a general counsel time in their day is truly valuable.
- Over Deliver at a Fair Price – There is nothing a general counsel dislikes more than feeling that a law firm took advantage of them and overstaffed an engagement. Firms that take that approach regularly find a second engagement difficult to secure. Instead, law firms that deliver good counsel, and do so fairly, will be appreciated now and well into the future.
- Be Mindful of Options – Not every one of your client's problems is best resolved through litigation. So, if appropriate, counsel the client that while they might triumph eventually, other courses of action are available to them that could ultimately be more advantageous. Yes, that will likely result in lower fees in the near-term, but the long-term rewards more than justify this investment. When considering ADR, help the general counsel think outside the box: would a mediation be a better alternative, and might a non-litigator prove more helpful in trying to bring a matter to a satisfactory resolution? Thinking through how to minimize, if not eliminate, any reputational impairment across all stakeholders is also a critical component of this decision-making process.
- Add Transparency to Your Recipe for Success – Given that the association between outside counsel and in-house clients is a business relationship, transparency across all time and expense issues is of paramount importance. Without exception, surprises are never appreciated and often drive a loss of trust and create unease over time. Better, in our experience, to be up front about all financial issues, including being open to alternative fee arrangements, project-based work, and a rejection of the impulse for automatic annual rate increases. In addition, understand the impact of your client's financial year-end. Be ready to provide good estimates and accruals for the CFO before year-end so that books accurately reflect a matter's financial cost when the company's year is closed.
- Understand That It's a Two-Way Street – Briefing your client on how you run your business, including how you elect partners and compensate professionals can help your client better understand your culture and constraints. In turn, that allows the general counsel to be a genuine partner and support to you as well.
The strength of the relationship between outside counsel and the general counsel and her or his team is tested regularly—in everyday encounters and in crisis situations—and its durability guided by proven approaches, not simply trial and error. Properly built on a sturdy foundation of trust, such a bond will drive a mutually-beneficial partnership today, and long into the future.
Louise Firestone is the long-standing SVP and General Counsel at LVMH Moet Hennessy Louis Vuitton Inc. She co-teaches a course at Columbia Law School, "Exploring the Role of the General Counsel" that touches on some of these topics.
Suzanne Rich Folsom is a Partner in the Investigations, Compliance and Strategic Response Group at Manatt, Phelps & Phillips. She is the former transformational General Counsel, Chief Compliance Officer and SVP – Government Affairs at United States Steel.
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