Outside general counsel can offer a wealth of expertise and flexibility for businesses, particularly for those unable to sustain a full-time, in-house legal team. However, selecting the proper outside counsel involves more than just scanning through qualifications. Many businesses make critical errors during this selection process. Here are six common mistakes to avoid when hiring outside general counsel.
- Overlooking Industry-Specific Experience
One of the most common mistakes businesses make is not giving due importance to industry-specific experience.While a prospective counsel may have excellent qualifications, if they lack experience in your business's industry, they may not understand its unique legal challenges. Outside counsel with industry-specific experience understands industry terms, is usually up to date with market norms, and is likelier to understand the nuances of your business vis-a-vis the industry writ large.
- Neglecting to Discuss Communication and Availability
Another common mistake businesses make is neglecting to discuss communication expectations and availability with potential outside general counsel. As legal matters often require immediate attention, it's crucial to ensure your counsel can be reached readily and responds promptly. One reason why miscommunication may occur is that businesses do not loop in counsel on matters early enough so that they can keep up and organically understand the specifics and urgency of issues. Therefore, businesses should consider looping in outside counsel well ahead of looming deadlines.
- Failing to Agree on Clear Cost Structures
Failing to establish a clear understanding of the cost structure is another mistake businesses often make. It's vital to clarify billing practices from the outset, whether hourly rates, flat fees, or retainer agreements, to prevent misunderstandings and unexpected expenses later. If you are being billed hourly and have an active matter with your outside counsel, you should request weekly updates on your bills so you can adequately manage your legal expenses and prevent surprises.
- Ignoring the Importance of Compatibility
Many businesses overlook the importance of compatibility between their company culture and the outside general counsel. Talk to, and interview multiple attorneys before deciding on along-term outside counsel. As they work more and more with you, they will understand your team and business.
5. Not Setting Clear Expectations
A common mistake is not clearly defining the scope of work, expectations, and deliverables. This is one of the principal reasons why there are legal bills disputes being businesses and outside counsel. Often, businesses are not sure about the specific task they want outside counsel to perform, which can sometimes lead to countless hours of"useless" work done by outside counsel. Both the business and the outside counsel should have a clear understanding of the services to be provided, deadlines, and what constitutes successful outcomes.
6. Overreliance on Outside Counsel
While it's essential to have legal counsel on hand, overreliance on outside general counsel can lead to unnecessary legal costs. Businesses should strive to build their internal capacity to handle minor legal matters. For example, you can develop playbooks and processes on how to address specific recurring legal issues, i.e., vendor agreements, etc., and only involve counsel for complex matters or strategic advice.
Hiring outside general counsel is a significant decision with far-reaching implications. Avoiding these common mistakes can help ensure you select one who offers not only the necessary legal expertise but also understands your business's unique needs and fits into its culture. Remember, hiring outside general counsel is not just about finding someone to handle your legal issues—it's about finding a legal partner to help your business navigate the legal landscape and achieve its strategic objectives.
