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The Inside Track on How GCs Choose Litigation Counsel

One of the most challenging jobs any general counsel encounters is guiding the company through litigation-related decisions. This process involves determining the company’s goals in the disputed matter, setting any budgeting constraints, choosing outside litigation counsel, assessing how much control and personal involvement in-house counsel and management want in the litigation, keeping company management informed during the litigation and, of course, deciding to recommend settlement versus going to trial.

The reason this subject is very important to law firms is quite simple: Litigation business, from either new clients or existing clients, depends on an understanding of the process from the GC’s perspective. Firms must understand the factors the GC is using in his or her decision regarding choice of outside counsel in order to get hired as litigation counsel.

CourthouseAs GC of a large financial institution in Texas, I considered several key decision points. First, I had to look at our bank’s goals in the dispute. What was the financial risk and reward to us? For example, was this dispute a “nuclear event” that could potentially impact our bank’s financial health or damage our reputation regarding a bank product line? Or was it a dispute that warranted immediate settlement because of an upcoming regulatory examination or pending merger? Was it a matter that probably needed to be settled, but because of year-end dividend requirements to the bank’s parent company the settlement needed to be delayed into the next fiscal year? Those law firms that understood the category of the dispute tended to ask the right questions during the retention interview and usually got hired.

It is also critical to consider what specific questions legal departments and company management address, such as:

  • Are there any disqualifying conflicts?
  • What experience does the proposed outside litigation team have in the disputed area?
  • Who is lead counsel through trial, and who will be involved in day-to-day case matters?
  • Will the law firm provide us with recent references from other companies it has represented in similar matters?
  • Will the firm provide us with an initial litigation plan, including legal strategy, proposed staffing, progress reports and a draft retention letter?

If I had not previously worked directly with the proposed litigation team, I always contacted the references provided by the firm to ask about their satisfaction with the team’s representation, the personalities involved, communication levels, perceived value and efficiency.

Another key observation: Our company’s philosophy was not simply to seek the best litigation counsel. Rather it was our philosophy to seek the best litigation counsel that also fit our company’s goals and business operations. Our bank had to keep operating at the highest efficiency levels despite any ongoing litigation. Outside litigation counsel had to operate within those operational parameters.

Before any interview with company counsel and management, spend some quality time outlining the questions you want to ask them instead of spending too much time on your own selling points. As we often repeat, client business development for a law firm is all about relationships, and nowhere is that more true than in choice of litigation counsel by a company. Understanding the most essential concerns of any potential client is absolutely critical if you want the business.

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