All but the smallest law departments have guidelines that they distribute to outside counsel. The guidelines explain how the department wants to govern its relationships with its law firms. Generally these guidelines override retention letters that law firms prepare. Large portions of most guidelines are sensible, and law firms neither question them nor object to them. A few controversial topics, however, engender a disproportionate amount of agitation and negotiation.

This article reviews five of those hot buttons: charges related to travel time, conflicts of interest, changes in billing rates, disbursements and staff restrictions. Additionally, I propose what I believe is a middle-of-the-road position. Law departments with enough leverage can take stronger positions; law firms that are busy or believe strongly in an alternative can seek more moderate outcomes. Regardless, law departments and law firms will be better off if there are some standards that are generally understood and shared.

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