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June 5, 2009 11:50 AM

In-House Lawyers to Outside Counsel: No Surprises, Please

Posted by Ed Shanahan

By Amy Miller, Corporate Counsel

Correction, 6/11/09 at 11:15 a.m.: In the ninth paragraph below, the reference to Michael Levitt, an operations counsel for GE Capital, General Electric's financing unit, incorrectly noted that Levitt expects his outside counsel to understand exactly what his legal department does; it should have said he expects counsel to understand what his company does.

General counsel never like to be caught off guard by their outside counsel. That's especially true in today's troubled economy, when an unexpected turn of events in a legal matter can be financially devastating.

So it wasn't surprising to hear three in-house counsel tell some 70 lawyers from E. I. du Pont de Nemours's legal network on Thursday that what they want these days, maybe even more than alternative-billing arrangements, is predictability from their outside counsel.

"It's okay to spoil the ending," says Stephen Winborn, senior director of tort litigation for St. Louis-based UniGroup, Inc., the parent company of United Van Lines and Mayflower Transit. "It's okay to be boring."

Winborn and two other in-house attorneys spoke at one of several sessions during a two-day conference organized by DuPont. The conference, which is to end on Friday, is aimed at helping the outside counsel increase referrals--to each other and to firms outside their network. 

Discouraging surprises wasn't Winborn's only piece of advice. Other tips include: Don't be a stranger. Be budget friendly. Find early settlement and early dispute-resolution opportunities. "And don't get fat and happy," he says.

Matthew Geekie, general counsel of Graybar Electric Co. Inc., said he doesn't necessarily agree that outside counsel should be boring. "We want to have some spice in our lives," Geekie says.

But that spice, Geekie says, shouldn't involve him walking into his CEO's office and saying that his outside counsel on a particular matter failed to anticipate something important. Outside counsel should know what's coming--and should update him regularly when legal matters hit certain benchmarks.

"That way you won't be surprised," Geekie says, "And we won't be surprised."

Certainty is also important to Michael Levitt, an operations counsel for GE Capital, General Electric's financing unit. Even more important, Levitt says, is that his outside counsel understand exactly what his department does: "It's the most important thing I can think of."

Mark Rochefort, a partner at Alston & Bird in Los Angeles, asked the speakers what they find most attractive about alternative-fee arrangements. Without missing a beat, Geekie stressed predictability. Such arrangements, he says, help him plan and budget better for what's ahead.

Levitt and Winborn, however, expressed some concerns. Levitt says the problem with fixed fees is that it isn't always clear what they include, which can lead to disputes. For his part, Winborn says UniGroup has tried them, but has found them difficult to manage and has returned to hourly billing.

"What I did like, though, is their predictability," he says. "And being able to reward firms with good track records.

Amy Miller is a staff reporter at Corporate Counsel magazine.

   
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