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Hiring Outside Counsel? 5 Things to Consider

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By Mark Wilson, Esq. on April 29, 2015 4:19 PM

The decision whether to hire outside counsel is fraught with anxiety. Which firm? How much to pay? How much to have the outside firm do? It's like hiring a new employee (except you're hiring dozens of them).

Hiring an outside firm doesn't need to be stress-inducing. Just keep calm, take a breath, and consider these five ideas when making the leap.

1. Don't outsource the whole legal department

The whole point of having an in-house legal department is so you don't have to go outside the company for routine legal tasks. While it's a good idea to outsource specialized skills like litigation or intellectual property, resist the urge to slough all of your legal problems onto outside counsel. It's more expensive, and hey, you'll be out of a job.

2. Forge a relationship

You're going to have to deal with your outside firm for a while, so while you're busy focusing on their brand or their hourly fee, also consider whether you and the rest of your department actually get along with these people. You wouldn't hire an employee whom you don't like. Why would you treat an outside firm any differently?

3. Consider in-sourcing

Starting up a whole new practice area internally is a big deal, but you need to conduct some real soul-searching (and invoice-searching) to figure out if hiring outside counsel is a good idea. Have you developed the in-house expertise to handle, say, workers compensation? Can you develop it? How long will that take? When will it pay off? How much will the company save? Lots of questions abound -- now go find the answers.

4. Be creative with those fee agreements

Alternative fee arrangements have been The New Hotness in outside counsel hiring for a while now. Instead of charging the hourly rate, you could negotiate a lump sum fee, a fee contingent on recovery (assuming you're going to litigate something) or a combination of any or all of them. And as we pointed out last year, don't feel bad about asking for a discount if you plan using the outside firm a lot.

5. What are you paying for?

The middle ground between doing all your work in-house and outsourcing your work to a BigLaw firm is to go with a specialized "boutique" firm. "Boutique" just means "focused," and it's good if you don't want to be paying for a part of a practice area that you have nothing to do with. Ordinary legal consumers are increasingly shying away from giant firms with dozens of practice areas; there's a reason for that.

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