Corporate Counsels Dictate Billing, Behavior to Outside Counsel

By Stephanie Rabiner, Esq. on October 27, 2011 | Last updated on March 21, 2019

How do you manage outside counsel? In particular, how do you manage billing and behavior?

In response to rising legal costs, corporate counsels have sought ways to manage outside expenses. Some have turned to the flat fee, while others have refused to pay for first-year associate work.

Pfizer has taken a somewhat different approach--one that it believes has produced better legal outcomes and cost-savings.

For almost three years, Pfizer has managed outside counsel through its Legal Alliance Program. The program includes key inside personnel and 19 firms with which it does a wide range of business.

Firms are paid an annual fee, which they receive on a monthly installment basis. The fee includes most expenses, and covers a broad spectrum of work. Exceptional results may result in bonuses.

Each firm has a point person who liaises with an individual within the company's legal department. Together, they manage the day-to-day relationship, oversee portfolios, and facilitate work. They also track matters so that resources are properly dispersed.

The Legal Alliance Program helps build long-term relationships based on trust. And because fees are fixed and work is fairly distributed, it encourages collaboration amongst firm partners.

A group of attorneys from across the alliance collaborated on Pfizer's licensing agreements, reports the program's Chief Counsel. Three firms also collaborated on a case budgeted for a 3-week trial. It was withdrawn in one day

The law department also facilitates direct collaboration, holding multi-firm training sessions so that it can meet court-ordered deadlines.

Do you think some of the above ideas can help your company manage outside counsel?

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