Only Mutual Respect Can Build Harmony When Working with External Counsel

Avoiding conflict between external counsel and in-house counsel
The relationship scenario between in-house counsel and lawyers from law firms has changed a great deal over the last decade with respect to transparency. With access to better software, computer systems and data collection methods, in-house counsel are able to measure up billed hours against results received. Alternative fee structures in generic work is gaining popularity and the private law firm is increasingly being viewed as a cost center with structured business efforts dedicated to measuring their worth.

However, despite technological and economical changes over the last decade, the relationships between in-house counsel and lawyers from private law firms continue to remain almost the same as that of a decade ago. What corporate counsel sought then from private law firm lawyers is the same as what they seek today: a proactive partnership in the conduct of client business. Something that can be found only when greater harmony can be built between in-house counsel and external service providers.

Building better harmony between in-house counsel and lawyers from private law firms

Wood and Eberts III (1999) suggest the following methods to build greater harmony between in-house counsel and lawyers from private law firms. The suggestions remain as relevant today for corporate counsel as they were when first made:
  • Decreasing the number of law firm providers
  • Retaining counsel who anticipate business risks and who can properly counsel on minimizing risks and furthering the company’s business
  • Expanding nontraditional relationships with providers like contract-staffing companies, legal research companies, document vendors which leaves law firms to focus only on litigation and counseling
  • Create alternative billing arrangements with those willing to work long-term
  • Using computer systems and modern technology in communications to increase transparency
  • Insisting that external counsel should communicate both bad news and good news in a timely fashion
Practicing in-house is as competitive as practicing at a private law firm

To work effectively with in-house counsel, lawyers from private law firms need to understand that there are as many creative subject experts this side of the fence as on theirs. No doubt, being in a more competitive atmosphere and exposed to a richer legal environment, private law firm lawyers have a better chance of becoming leading experts in their fields, but it does not mean every lawyer from a private law firm is automatically a leading subject expert.

In every field of real law practice including creativity, client relations, cost and billing, communication, problem solving, responsiveness, and risk-sharing, in-house counsel have to prove their mettle day in and day out. The safe pay packet of in-house counsel is a thing of the past and their take home amounts are open to both the vagaries of stock markets and the performance of non-legal management. The lines keep blurring as more and more law firms adopt business methods of measuring performance, and businesses hire more in-house counsel who are valued subject experts.


Realizations by clients about the actual and measurable contributions of private law firms are being accompanied by a gradual shift to hiring smaller law firms, while big law is being hired only when it is necessary. However, despite the visible shift in preferences of businesses, lawyers from private law firms fail to develop harmony with in-house counsel because of an automatic assumption that it is safer in-house and tougher outside. Unless a private law firm lawyer is rid of this erroneous assumption, working with him/her remains difficult.

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