Making your scorecard: How to evaluate outside counsel
In previous posts, we have looked at the role outside counsel can play in a large corporation and provided some considerations to keep in mind when selecting outside counsel for your organization. Now we’re going to tackle another concern: evaluating outside counsel.
Let’s start with a hypothetical. Say you’ve done all the legwork of finding a firm that seems like a good fit for your company and your unique set of needs. The case they’ve been working on has dragged on a bit, and your CEO is starting to pressure you for results. “What is this outside counsel doing, exactly? Do we really need to keep that expense?”
Assuming that you still trust your initial decision to take them on, and that they haven’t done anything dramatically wrong to breach that trust, you are now given a sometimes-tricky task. How can you qualify their progress and justify their continued expense?
Creating a Scorecard to Evaluate Outside Counsel
A scorecard has several advantages. By articulating exactly what you are looking for, you can help your organization clarify its needs and expectations for outside counsel. Why are you seeking outside counsel in the first place? What do you hope they will do for you? What does your idea of success look like? Additionally, you can succinctly communicate these expectations to any prospective law firms so that they know what you’re looking for and what you will be evaluating them on from the get-go.
So what should you put on a scorecard? Here, I am gleaning from an excellent list provided by the Association of Corporate Counsel (ACC). The ACC suggests a mix of objective and subjective benchmarks, some of which can be modified to suit your particular needs or situations. Some considerations to keep in mind include:
- Understands client goals and expectations. Outside counsel should be able to demonstrate their understanding of your corporation’s benchmarks and mission. How often do they reflectively read back questions or task assignments to assure that you and they are on the same page?
- Expertise. What is their level of knowledge, both in their particular specialty and in matters such as judges, venues, opposing counsel, juries, etc.?
- Effective Communications. How long does it take for outside counsel to respond to your queries or concerns? What is the availability of their lawyers? Do they keep you apprised of their progress along the way?
- Process Management. Has outside counsel completed tasks within deadline? At reasonable cost level? At acceptable quality?
- Budgeting. Has counsel been able to provide an accurate budget prediction? Have they kept within the stated budget?
- Company Values? Are the actions of outside counsel consistent with your organization’s corporate values and culture? Particular considerations may include: diversity, pro bono work, preventative lawyering or a commitment to continual improvement.
Other Outside Counsel Considerations
Other considerations are even easier to gauge, once you have your expectations in hand. For example, for most of these, a simple checklist can be used. These benchmarks focus on specific outcomes. To wit:
- Did outside counsel win the trial or appeal?
- Close the deal?
- Settle the matter for less than X dollars?
- Conclude the proceedings in less than X months?
By the same token, you may want to base your evaluation on quality or budget management.
- Did outside counsel perform a component piece of work X at Y dollars?
- Provide budgets and proposals on time?
- Forecast expenses accurately?
- Apply discounts correctly?
- Providing for any unforeseen circumstances, did they complete the tasks under budget and on time?
These next criteria are perhaps not as easy to check off, but are nonetheless important to take into consideration when gauging the work an outside counsel is doing. Certainly, the objective goals are important, but an outside counsel can be a source for a lot more value within your organization if they are able to do the following:
- Inspire confidence in their abilities and/or boost the confidence and morale of your organization.
- Think creatively about your problems and opportunities, offering you a perspective that is helpfully outside the constraints of your workplace.
- Respond to inquiries reliably and reasonably quickly.
- Perform their work efficiently.
- Staff their projects conscientiously.
- Provide consistently accurate budget forecasts.
Once you’ve devised a scorecard that best suits your organization, you need to set up a plan for how to implement the evaluation and what to do with the opinions you garner from it.
Implementing Your Scorecard
For implementation, consider the following actions:
- Appoint a manager who can handle this evaluation internally, ideally someone who has had extensive experience working with outside counsel in the past.
- Determine who should be filling out these scorecards.
- Determine how often the evaluation will take place. Every other month? Quarterly? Upon completion of the case? Shoot for quarterly.
- Make sure in-house lawyers have a clear channel for accessing and sharing their evaluations.
- Decide what will be done with the collected information and opinions. The ACC suggests creating summary reports to share with in-house counsel so they can keep the outside firms in mind for future projects. These reports might also be shared with the Legal Department as a whole to gauge how outside counsel firms are performing across the portfolio.
- Plan for ways in which the reports can be shared with outside counsel. The ACC suggests face-to-face meetings with key lawyers from the outside firm. This will give you an opportunity to apprise them of their performance and allow them a chance to remedy any deficiencies, address any issues or clear up any misunderstandings. You might also provide them with a blinded average of their competitors’ scores, so that they know where they stand among their peers.
Ultimately, the structure and feedback provided by a clearly defined scorecard can help you address performance issues in the short term, and aid in the negotiation of potential outside firms as you look to the future. Want to know more about how to manage outside counsel? Contact a Diligent representative today. We can help you find the advice you need and the answers you deserve.
