THE FIRM: Don't bill for thank-you notes: Working with corporate counsel

By Deborah Elkins The Daily Record Newswire Relationships matter, goes the familiar marketing maxim. And communications are the key to a successful collaboration between a lawyer and the in-house legal counsel who hires the lawyer. Notice, it's the lawyer who is hired, not necessarily the law firm. "When I need to reach out to someone, I think of a lawyer, as opposed to firms," John M. Oakey III, General Counsel of Essex Bank in Glen Allen, told the audience at Virginia Lawyers Weekly's Business & Law Breakfast Forum on Sept. 8. Oakey appeared in a panel discussion with Manik K. Rath, General Counsel of LMI in McLean and Jeffrey Stredler, Senior Litigation Counsel of Amerigroup Corporation in Virginia Beach. In-house counsel give equal weight to who you know and what you know, as the outside lawyer. They want to know what kind of reputation you have where you practice and if you've handled the kind of specific matter in question, whether it's a business merger, regulatory issue or thorny employment dispute. "Lots of lawyers I work with, I know personally, and have worked with over the years, for instance, though bar activities," Oakey said. "They know me, they know I'm flexible, they know my nuances. I want to pay attention in a case, so if something is going to blow up on us," it won't be a surprise. If he's dealing with a complex regulatory or corporate governance issue, Oakey looks for someone with a long track record in that practice area, and with solid credibility in the forum in question. Take heart, junior partners. For something a little less complicated, say, an "oddball customer issue," Oakey tends "to go with people out there for 10 to 15 years. I feel like I get really good value. They've been around the block, but I'm not getting blown out of the water with the high billable hours of a senior partner." For newer lawyers looking to make an impression, getting involved in legal organizations or pro bono work provides a way to impress inside counsel, according to Rath, who is active with the Northern Virginia Technology Council. Rath recently edited the NVTC Executive's Legal Deskbook, which includes contributions from numerous outside lawyers. Given his own law firm experience and active role in the NVTC, Rath said "it's rare that we're working with strangers." Don't be afraid to strut your stuff in order to stake a claim. If you are a new associate who clerked for a judge where a company has to go to court, make sure that credential is out front. For litigation, "you want someone knowledgeable about the venue, about the judge," Stredler said. He recently had a case in Florida and hired one of the judge's former law clerks. "She was wonderful. She knew just how that court was run. If you have an asset like that," you should promote it. References can be helpful, but the outside lawyer may need to do due diligence on those references first. Stredler said he recently checked references on an outside lawyer, and two out of the three references said they would not hire the lawyer again. Competition for business has heated up. Stredler recently fielded a pitch from a New York law firm who offered to match presumably lower billing rates charged by Virginia firms. But one lawyer who cold-called him lost points when he started by asking how many states Amerigroup operates in, a question that could have been answered with an easy online search about the public company. Oakey keeps an eye out for "teaser emails" that may flag some regulatory deadline for him. An August email reminded him about something due at the end of the month, and the sender's specific expertise to assist in the task. But then the sender billed Oakey 0.2 hours "for that edification," a bill that he paid. With their prior law firm backgrounds, all panel members were comfortable with old-school hourly billing. "What works for outside counsel is the hourly rate," Rath said. "I've never asked for a discount... We want to be a medium-sized client who behaves and is treated like a big client" for the outside lawyer, he said. Like many in-house lawyers, Rath has billing guidelines for outside counsel, but instead of the 30-page guidelines he used to see in private practice, he has pared his guidelines to a half-page with eight specific requirements. The panelists make sure to review bills and can find reasons to challenge the bottom line charged by the firm. Stredler says that when he sees a bill with the first item "review" misspelled, he knows the lawyer did not review the bill before sending it on. A lawyer's sloppy billing of the same item during two separate billing cycles would have cost him $10,000, had he not scrutinized a recent bill. In another case, a law firm billed Stredler's company for 27 hours for preparing an answer, a task he said should have taken a few hours. They must have let a first-year associate cut his teeth on the assignment, he thought. Another outside lawyer sent Stredler a lovely thank-you note at the conclusion of a matter, expressing the hope they would work together again. The $40 follow-up bill for the letter made that less likely. That was the tenor of the panel. They probably won't outright fire outside counsel because it's too disruptive. "I've been the beneficiary of a client" who has fired outside counsel, Rath said. It's messy and there are always alternatives. "Instead of breaking up, you can always stop calling," Rath said. Published: Wed, Sep 21, 2011