Engaging external counsel has several advantages including adding credibility to your case, as well as making use of their unique specialist expertise and resources. However, engaging external counsel has significant cost implications and could possibly escalate a dispute unnecessarily. When engaging external counsel, important issues that should be addressed include: expertise, budget, fee arrangements, and team selection.
Expertise
Expertise is probably the single most important factor when choosing external counsel. When choosing the right firm, you should determine whether the firm has expertise in:
- The specific area of law governing the dispute
- he forum of the dispute
- The subject matter of the dispute
- Cases of a similar size and complexity
- Conducting cases with a foreign element (where applicable)
Litigation Budget
To properly manage external counsel it is vital that you require the external counsel to prepare a detailed litigation budget at the outset. While litigation is always unpredictable, experience lawyers should be able to make realistic estimates of what your case should cost to resolve based on their past experience. However, to give you a reasonably accurate estimate of the costs of the dispute, the client will need to provide as much information as possible in order for the lawyer to assess:
- The nature of the dispute
- The complexity of the dispute
- The amount and location of any necessary documentation
- The number and location of any necessary factual witnesses
- Whether the matter should be handled by junior or senior lawyers
- The timescale to resolve the dispute considering the particular court involved
Fee Arrangements
As most in-house counsel knows, fees to external counsel are about risk. An hourly rate means the final bill is open-ended and puts all of the risk on the client. However, a fixed-fee arrangement in which a total fee is quoted at the outset for a given legal service, puts all of the risk on the external counsel. If a firm is unwilling to provide details of its basis for charging fees, you should consider not using them. Firms should at least quote hourly rates for the lawyers who will be working on your case. It is important that you consider the hourly charges for all of the lawyers who will be working on your case, not just the partner managing the team. The bulk of the work and therefore the bulk of the fees may be generated by the work of junior attorneys, trainees, paralegals, and clerks. Where the scope and nature of the work to be performed can be defined with some certainty, it is reasonable for the firm to provide an estimate of the hours needed to perform the work and by which level of staff members. While an estimate is just that, and does not bind the firm, it is extremely useful in order to monitor the performance of the team and control costs.
Team Selection
Whether you are in the process of choosing the firm to represent you or whether you have already chosen the firm you wish to go with, it is always a good idea to meet all of the members of the firm who will be performing the majority of your legal services. While it is important to feel comfortable with the lead partner, it is also important to meet the assistant attorneys, junior counsel, trainees, and even paralegals, as you may be working with these staff very closely and for a long period of time. Become familiar and strike up a rapport at the outset can have great benefit later on as the case progresses. In addition, you should be told who is the person responsible for the day to day conduct of the case, who will be responsible for overall supervision of the case, and who to approach in the event of a problem. You should also request a “team sheet” with the details of all attorneys and staff who will be working on your case, their direct lines, cell phone numbers, and home phone numbers. This will ensure that you have a convenient list of all contacts who you may communicate with concerning your case.
Client Assistance and Contacts
External counsel will need to be told who in the clients organization is to be their main point of contact for communication and instructions. Also, the client will need to tell the external counsel how much correspondence he wishes to see as well as how regularly he wishes to receive progress reports, updates, and budget reports. While the external counsel can assist you with your case, the client or the clients in-house counsel should take an active part in the case. However, if the client or the clients in-house counsel wishes to take a more “hands off” approach, the client should at least establish one line of communication between the client and the external lawyers. In a situation where one clear line of communication has not been established, the external lawyers could end up receiving conflicting instructions from several different individuals within a client business organization. To avoid unnecessary confusion, one person with a client business organization should be designated as the primary point of contact within the client and for providing the company’s instructions. Ideally, this person would be specifically named in the client engagement letter. For larger corporate clients, it would not be unusual for several people to be named as primary points of contact for specific and discrete issues such as technical questions, commercial questions, receipt or retrieval of documents, management reporting, public relations, financial concerns, and escalation.
Instructing Overseas Lawyers
When choosing external counsel in a country outside your home jurisdiction, it helps to discuss the foreign legal system in which the counsel operates. This allows the client to become generally familiar with the system with which he is dealing as well as to help manage expectations for how the case will be conducted, the time necessary to resolve the case, and finally the possible/likely resolutions to the case. When choosing an overseas lawyer, the client needs to consider not only the individual lawyer, but the firm in which he works, his language abilities, the bar rules under which he is governed, his fee structure, and what confidentiality rules he is governed by.
When selecting the individual lawyer, you should ensure that he will be available throughout the entire time you will need him and that he in fact will be the person performing the work. If not, you should ensure that he will have suitable backup to continue the case when needed. Similarly, you should consider the firm in which the foreign attorney practices. Some firms operate merely as cost sharing associations where individual attorneys operate independently within the practice, hiring their own support staff, and often unwilling to help if your lawyer is unavailable.
Another consideration is the language spoken by your attorney. While language is undoubtedly important, the selection of a foreign lawyer should not be based on his fluency in your language. What is important is that he is an expert in the in the subject matter of your dispute and that he can reasonably communicate with you.
When dealing with foreign lawyers, the same fee considerations already discussed still apply. Most internationally oriented practices work on an hourly rate, but this does vary. Also, in some countries, the rates may vary because of governmental fee regulations or be charged on a VAT basis in which the fee is based on “the value” of the legal service provided. Just as it is necessary to have a good understanding of how you will be charged for fees in your home country, you also need to have a clear understanding of the basis on which your foreign lawyer will charge you.
While communication between lawyer and client is generally privileged and cannot be disclosed in a court proceeding, it is always necessary to confirm that communications between you and your lawyer is protected in the foreign jurisdiction. For example, communications with notaries and tax advisors is not always protected in every jurisdiction.
