Litigation Management for the In-House Generalist: Retaining Outside Counsel And Your Role As In-House Counsel

Managing litigation presents a whole new set of challenges and responsibilities to an in-house generalist’s already crowded plate. This article series introduces the art of litigation management from the in-house perspective with tips for various phases of litigation. This article discusses retaining outside counsel, and the role you need to play as in-house counsel.

Retaining outside counsel

A critical early step to take in litigation (and of course where your company is the plaintiff) is to retain counsel to represent you. The quality and skill of your representation can be proportional to success in litigation, and the ability to manage the litigation and its costs. There are a number of factors that go into the selection of counsel. Some companies prefer to have long-standing relationships with a few counsel who are their go-to litigators for most types of litigation. Others prefer to use a variety of counsel. Often, primary outside counsel must be supplemented with local counsel in the jurisdiction where the dispute exists.

Depending on the amount of time available to select counsel, consider using a request for proposal (either formally or informally). RFPs gather similar data points from multiple counsel to permit more of an apples-to-apples comparison. An RFP, whether formal or informal, should ask for an array of information to permit that comparison: conflict checking; history, qualifications and expertise of the firm and the lawyers principally responsible for the matter; handling of similar cases (including the number of similar cases handled and their results); information on local counsel they would anticipate working with; anticipated staffing and budget; and initial impressions and analysis of the case and anticipated approach to the dispute. Consider asking for references and attaching your outside counsel guidelines (more on this later). Limit the number of firms invited to submit a proposal and the time to respond.

Once counsel is selected, finalize a retainer letter (or if using existing counsel, the firm should open a new file and send a new matter acknowledgment letter specifically setting forth the scope of this engagement). Receive and review a budget before accepting the engagement.

Strong outside counsel guidelines can effectively set expectations for outside counsel. The retainer letter or new matter acknowledgment letter should expressly reference and incorporate any outside counsel guidelines (i.e., that counsel acknowledges receiving the guidelines, that they will comply with the guidelines and that any conflict between the terms of engagement and the outside counsel guidelines are resolved in favor of the guidelines). The guidelines should stress effective and efficient use of resources to achieve superior and cost-effective results; cover both transactional and litigation engagements; stress that open, clear and concise communications between counsel and client are key to a successful relationship; require the designation of a “lead outside counsel” to serve as the primary point of contact and a corresponding “lead inside counsel” (you); require a strategic plan which is updated at appropriate points; and address fees and budgets, and whether alternative fee arrangements are considered and/or encouraged. The retainer letter or new matter acknowledgment should also require counsel to share outside counsel guidelines with any local counsel they retain directly (with your consent).

The role of in-house counsel

While different in-house counsel exercise different degrees of involvement, in-house counsel is more than just an overseer. The role must include being a facilitator, educator, enforcer, voice of reason, strategic thinker, risk manager, cost manager and advocate for the company’s interests. Among other things, in-house counsel helps guide the strategy and course of the litigation. This includes evaluating the strength of the case; managing indemnification and insurance tenders; identifying document custodians and corporate witnesses; assisting with deposition preparation; leveraging internal resources to manage outside counsel costs; reviewing outside counsel statements and requesting periodic progress reports; updating legal proceedings memoranda and disclosures in securities filings; facilitating the gathering of potentially relevant documents responsive to discovery requests; reviewing and editing pleadings and motions drafted by counsel; and evaluating and participating in settlement conferences, arbitration and mediation.

Litigation management may also include interacting with expert witnesses and third party consultants. As much as litigation management is viewed as a time suck, making time for it (instead of relying on outside counsel to do the right thing) is important to ensure your client’s interests are properly looked after. Insist on being a voice at the table with counsel and third parties. Of all of the parties involved, you have a unique (and often the best) combination of legal acumen and knowledge of the business. Outside counsel may be the expert in litigation, but you are the expert on your clients’ business. Part of your job is to help outside counsel and others bridge the knowledge gap and translate their experience to the business.

Litigation management also includes working with internal resources and personnel, such as corporate systems, communications and business unit leaders, to obtain assistance with various litigation “asks.” Litigation requests are often considered a nuisance, and if the consequences of not responding (or not responding fully and accurately) are not communicated clearly, some may prioritize responding to litigation requests extremely low on the “to-do” list. Part of the job is to keep the appropriate amount of pressure on internally to ensure the commitment from the business to assist with the litigation does not falter or wane (or if it does, re-evaluate the desire of the company to continue litigation versus settling the matter).

Litigation management attorneys are usually involved in risk management and strategic direction sessions with general counsel and senior management. As the person living at the nexus of the litigation and the business, you will likely be called on to provide your advice and guidance on the litigation strategy, updates on the litigation, the litigation budget and settlement. It can be particularly difficult to balance a limited budget against the desire to “win at all cost.” Part of your job is to ensure that outside counsel balances performance and efficiency that is appropriate for the case and the potential recovery or maximum exposure.

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