SIX KEY TAKEAWAYS: “Best Practices for Retaining & Working Effectively with Outside Counsel”

WEBINAR RECAP

Lando & Anastasi recently co-presented a webinar with the Association of Corporate Counsel-Northeast and three esteemed in-house counsel panelists: Tom Brown, Senior Managing Legal Director, Head of IP Litigation of DELL Technologies; Lesley A. Hamlin, Vice President and General Counsel, Intellectual Property, Operations and Emerging Businesses of Citrix; and Dave Schuler, Chief IP Counsel of BOSE.

The purpose of the webinar was to share information to facilitate productive and positive relationships between in-house and outside counsel, and wow, did it deliver! This article summarizes some key takeaways.

FIRST THINGS FIRST

A common question from the audience was whether and how to retain outside counsel in the first place. If, as in-house counsel, you don’t already have a go-to relationship—perhaps you took on a new role or this is your first big IP litigation—a great place to start is word-of-mouth recommendations from within your professional network. You could also research firms that represented others in your industry with favorable results.

Before selecting a firm, consider how you’d like to allocate work between your in-house legal team and outside counsel. Consider the nature of the work. Is it patent or trademark prosecution, portfolio management, due diligence, monetizing patents through licensing, or litigation? The panelists advised considering both general practice and boutique firms. As one panelist put it: Don’t be afraid to cast a wide net!

REQUESTS FOR PROPOSAL

Requests for proposal (RFPs) are one way to choose outside counsel for IP matters. In-house counsel have varying approaches to such proposals. Some issue an open-ended request and let law firms choose what information to provide, while others have a more formal process with their own standard form and predefined questions. Using your own standard form makes it easier to do a side-by-side comparison of multiple law firms.

Factors to look for in a proposal include the number of patent lawyers with education and experience in your technology; how matters are staffed (including paralegals, patent agents, technology specialists, partners, and associates); the experience level of the primary timekeepers; and proposed litigation strategies (e.g., settlement, mediation, summary judgment, trial).

Most of the panelists don’t expect substantive case analysis for new litigation matters. However, it is always appreciated and is sometimes the tiebreaker in choosing outside counsel.

When done properly, responding to an RFP is a lot of work for outside counsel. Likewise, analyzing those responses, including conducting follow up interviews, is a lot of work for in-house counsel. As one panelist put it, while it’s important to cast a wide net initially, in-house counsel should seek RFPs from only a few law firms that are seriously considered as finalists for an IP litigation.

ALTERNATIVE FEE ARRANGEMENTS

No proposal is complete without options for alternative fee arrangements (AFAs). There are many types of AFAs (e.g., flat fee, capped fee, blended rate, multistage, success bonus), and they are desirable for their predictability in creating budgets. But AFAs don’t necessarily mean that unexpected developments and costs can be ignored. The panelists understand that adjustments may be necessary to ensure that the arrangement is fair to outside counsel, too.

The takeaway on AFAs is that what’s right for one in-house legal department may not be right for another. In-house and outside counsel should have an open and honest discussion so that everyone feels good about the value being exchanged.

THE ENGAGEMENT AGREEMENT

Once you’ve selected the right firm for your new matter, it’s time to think about the engagement agreement. Some in-house counsel may not be aware that a law firm engagement agreement is negotiable. For example, requests for advance waivers are often rejected. In-house counsel may require firms to incorporate the company’s standard terms to any engagement agreement. This is another area where in-house and outside counsel should have an open and honest discussion to avoid misunderstandings in the future.

BUILDING A LONG-TERM RELATIONSHIP

Law firms are your strategic partners and extensions of your in-house legal team. Some of the panelists have been working with the same firms for decades, while others enjoy establishing new relationships more frequently. In-house counsel appreciate when firms understand their business and the goals that need to be achieved. One way to build a new relationship, or to reinforce an old one, is to take advantage of value-add law firm services such as complimentary IP services or continuing education.

“COMMUNICATION, COMMUNICATION, COMMUNICATION”

The number one determinant of a good relationship is communication. Ironically, it’s also the number one factor where outside counsel fall short. Outside counsel must communicate regularly with in-house counsel and understand what issues require feedback. For example, in-house counsel (even within the same company) may have different views on the desired frequency and content of communication. Some in-house counsel want to be involved in day-to-day decisions while others want to discuss only the most significant events. Outside counsel should understand what is expected and check in periodically to make sure those expectations are being satisfied. Almost all in-house counsel want advance notice and explanation of any invoices that will exceed budget.

Set realistic expectations early in your relationship and again before each matter. Be flexible and respectful of each other. (And if as outside counsel you’re not sure whether you’re hitting the mark, just ask!)

Thank you again to our in-house panelists from DELL Technologies, Citrix, and BOSE for sharing their collective experiences and insights, and to the Association of Corporate Counsel-Northeast for co-presenting with Lando & Anastasi.