by Raffi Varoujian

Created on: July 28, 2011   Last Updated: July 29, 2011

Most in-house lawyers operate as generalists, with specific knowledge in one or two fields related to the industry they work in. As such, unless they work in a large, well-resourced legal team, selecting, instructing and managing external lawyers is a key part of the job description.

Legal departments are given a finite budget for "business-as-usual" external legal spend, making for some difficult decisions on what to outsource and what to try and deal with internally. Fortunately, the provision of legal services is an extremely competitive business, and the savvy in-house lawyer will use this to his or her advantage.

Tight and concise brief 

One of the key roles of an in-house lawyer is to act as a liaison between internal clients and external counsel. This works in both directions. When taking instructions from internal clients, the lawyer needs to get the relevant background and facts, drill down into the detail and understand the fundamental issue(s) that requires advice, and then compile it into a focused brief.

This will ensure that the external lawyers advise only on the specific issues identified, rather than advising generally, which takes longer and is more expensive. When the advice comes back, the lawyer then has to “translate” the advice so that it is easily understood in the commercial environment.

Good communication

Ideally, the in-house lawyers should “own” the relationship between the company and the external adviser – for two main reasons. Firstly, to ensure that he or she has a handle on the whole of the company’s legal spend, and secondly, to keep tabs on the quality, quantity and velocity of the advice being given. External lawyers generally prefer dealing with in-house lawyers direct (rather than their internal clients) as they speak the same “language” and share similar expectations about work product, the form it will take, and how speedily it can be delivered.

Fees

Law firms traditionally charge on an hourly basis, but wherever possible, other fee arrangements should be explored. Fixed fees are ideal for self-contained matters – such as reviewing and commenting on a contract, or advising on a specific point of law. However, this may not be possible for open-ended assignments, such as contract negotiations or advising during ongoing litigation.

An alternative is a blended fee – an average of the fees that each fee earner working on a client account (from paralegals to senior

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