Instructing external legal resource: 5 questions to think about

Even when a business has an in-house legal team, there are times when instructing external legal resources—barristers, solicitors, or legal consultants—makes good sense.

And at such times, it makes even more sense to think carefully about the work that you’re asking the external provider to perform, and how you want them to go about it.

That’s because external legal resource isn’t cheap, and it’s all too easy to end up having paid out a lot of money for legal work that adds little value.

So here are five questions to think about when instructing external legal resource — questions that will help to ensure that you’re paying the right fee, for the right job.

1) What do we want to get out of the work?

This may sound a silly question, but it turns out to be vital. Think carefully beforehand about the help you require, and the form that you want that help to take.

For example, are you seeking an opinion? Are you asking for a service to be performed? Legal support in a specific area? Do you want to know what the law says, or do you want specific advice in the context of a specific situation or business issue?

The bottom line: left to their own devices, an external provider will do what they think you want—which won’t necessarily be what you do want, or necessarily cost the same as what you actually want. So  eliminate that ambiguity.

2) How can we help the external provider to work more effectively?

Time costs money. And the time spent by an external provider will be more expensive than time incurred by your own staff—especially if the task that is being performed in-house is being performed by someone more junior.

So always look for ways so as to package up work so that as much legal ‘leg work’ as possible is performed in-house, by your people. Look at your own skills and resources, and minimise your external costs by making full use of them.

Such packaging of work is surprisingly straightforward—and can have a significant effect on the size of the eventual invoice.

3) How should we scope the work?

The short answer is ‘very carefully’. That said, this is a task that will have been made easier by thinking carefully through the previous two questions.

In other words, you know what you want, and you know how you can package and support that work so as to make best use of the external resource that you’re paying for.

So your scoping document will need to make this clear, as well as making explicit the form in which you want deliverables delivered. Put another way, if you want actionable advice, rather than a regurgitation of the law, make sure that this requirement is specified upfront.

Finally, make sure that you explicitly ask for a time sheet to be submitted along with the eventual invoice. When you’re paying for an external provider’s time, you want to know who spent that time, and how.

4) Who do we want working for us?

Remember, you’re the customer. So you’ve every right to be prescriptive in terms of the people who carry out the work that you’re instructing the external provider to perform for you.

In the case of a person who is too junior, not only might they know less than you regarding a particular issue, but also you’re likely to end up paying twice—once for them to do the work, and once for a partner or associate to review it.

Equally, if the job requires a bundle of documents to be prepared for a hearing, then this needs to be pushed down to a paralegal, and not be handled by an associate.

5) Can they quote a fixed price for the work?

Finally, ask the provider to provide a fixed-fee quotation.

Point out that you’ve been very prescriptive regarding the work to be performed, what you want by way of deliverables, and the help and support that you will provide. Point out, too, that there is considerable clarity and certainty regarding the seniority of the people who will be performing the work.

If the external provider still won’t provide a fixed-fee quotation, ask what further information or help you could provide so as to enable them to do so. Ask them to be clear, too, about any ‘out of scope’ costs that might worry them—these can always be treated as additional to the fixed fee quotation.

And if the work to be undertaken is large or complex, or the external provider is still reluctant to provide a fixed-fee quotation, consider breaking the job down into sections, and asking for fixed-fee quotations for each stage.

The bottom line

External legal resource isn’t cheap.

And the harsh reality is that it’s all too easy to spend money on external legal work that doesn’t seem like good value for money—it’s not actionable enough, it’s not quite the right work, or the resulting fee seems excessive.

Spend time upfront thinking about what exactly you’re looking for, and most problems can be sidestepped.

Next time you’re commissioning external legal resource, try it.

These steps will be taken by a good in-house lawyer whenever an external law firm is instructed.  As such this is part of the service we provide our clients for whom we act as their in house lawyer on a part time basis, in situations where we instruct an external law firm for specialist advise or overflow work.

Please call us at any time to learn more.

Posted Monday, August 13th, 2018 by Warren Ryland



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