Friday, April 18, 2008

A Response to Establishing Partnerships . . .

I want to take serious issue with Larry Salibra’s premise that corporate law departments cannot establish effective partnerships with law firms. Larry’s (we are old friends and on a first name basis) views were expressed in response to an ACC Docket article, “Memo to Law Firms” in the April 2008 issue (p. 99) Is such a relationship easy to establish?? No. Can it be productive and mutually beneficial when done correctly? Yes.

It is trite but true that any partnership with an outside firm must be a “win-win” for both the corporate law department and the law firm. There must be a good working relationship which includes mutual respect between the principals in both organizations. The law firm “wins” by being guaranteed a level of work over an extended period that it would not otherwise have. The corporation benefits by paying lower fees, having someone at the firm who knows and understands the particular problems the company faces, and often having a firm that is more responsive than it would otherwise be. Often more important in an on-going relationship is that the firm lawyer knows and becomes well known to, and respected by, the corporate executives.

A firm that is a true partner of a corporation will also display a level of sensitivity to the corporation’s economic ups and downs. I knew partners at private law firms with whom I had relationships that stretched for more than a decade. In a pinch, I could call them and tell them I needed a help with a problem, and had no budget to pay them. And more often than not, they would provide the assistance I needed. I was, of course, sensitive to the fact that there needed to be a payback. When I was choosing between two firms for a paying project, the past assistance would be in the back of my mind.

Larry has promised to expand his views on partnering with private law firms. I will be looking over his shoulder.

-Steve Bokat
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Larry Salibra said...

Unlike Steve, I do not believe that the use of the term “partnership” is just a metaphor for saying if you provide cost effective, relevant legal services we are likely to hire you again. If it does then the message is not profound, surprising nor particularly applicable to law firms. What about the notion of competition rather than long term relationships to keep legal services in check?

Then there is the outside firm hired for the one task not likely to be hired again— there is no long term relationship, yet I bet no one would argue that one would not have the same expectation of service from them.

Finally, there is the issue of whether house counsel are really buying cost effective, or at least the most cost effective legal services, and that the idea of a partnership is just code for that other thing—those unmentionables they are buying that will be the topic of another blog.

Steve tries to make his point by asking the question, would I hire an outside counsel to try a case based on my determination of his litigation capability and simply turn the case over to that counsel to try without any significant intervention—yes! I have done it because it was the most cost effective solution in that particular case. Outside counsel can be very effective service provider in many situations with out being partners (as Steve characterizes them). Outside counsel have served as part of a litigation team in which I was the lead trial attorney. They had defined roles, had no need to have a comprehensive understanding of the business or CEO nor did I require that they be my partner; they just had to complete the tasks I gave them.

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