Australia: A Commercial Manager’s Guide to Briefing Lawyers

Last Updated: 15 March 2010
Article by Steven Goodman

1. Introduction

The unfortunate reality is that most commercial managers and lawyers do not speak the same language when it comes to effectively communicating. As a result, clients complain that lawyers do not listen, are slow, charge too much, delegate excessively and slow down transactions. Lawyers complain that clients do not appreciate their efforts, complain, give vague instructions and dive into transactions without thinking.

I experienced this communication gap first hand as a lawyer in private practice and from the other side of the fence as an in house lawyer and commercial manager. In fact one of the main benefits that an in house lawyer can deliver is the ability to bridge the communication gap. However, there is a cost in having an in house lawyer involved in the briefing process. As a result many companies do not have in house lawyers and even when they do they do not always involve them in briefing their external lawyers.

The aim of this article is to bridge the communication gap by devising effective strategies to improve communications. It is intended to be a brief practical guide to commercial managers involved in instructing lawyers.

2. Understanding each Other

The first step in effective communications is to understand the perspective of the other person.

Commercial managers should take the time to explain their business and personal goals to their lawyers. Tell your lawyer your business objective. Why are you doing this deal? What is your budget? What are your commercial issues? Who are your competitors? These details may not be directly relevant to the issues at hand but they will enable your lawyer to provide more relevant advice and to spot issues that could otherwise be missed.

On the other side of the equation commercial managers should strive to understand the business and personal goals of their lawyers. What sort of practice is your lawyer trying to develop? How important are you to him or her as a client?

The best way to achieve this sort of understanding is through informal functions. Make the time and effort to organise and attend them. I once dealt with a very experienced Canadian manager who told me that the first thing he did on any deal was to organise a long lunch to kick off the deal. He did just that on the particular deal and the long lunch was very effective in building strong relationships which carried the deal through the usual difficulties that came up during the course of the deal. Not only did the deal get done in record time at a reasonable cost but also everyone enjoyed the usual late nights.

3. Choosing your Lawyers

Choosing the right lawyers is often a balancing act. There are a number of competing issues that need to be balanced. The key to success is to approach the whole process in a clear well planned manner. Every large company should have a written strategy, which identifies how lawyers are retained. Some of the issues that need to be dealt with are:

  • An impartial objective process
  • Balance in house and external resources
  • Build expertise in your external lawyers but also maintain competitive pressure
  • Establish ongoing relationships but avoid being captive
  • Use the best experts but also maintain an ability to see the relationship between different matters

4. Terms of Engagement

It is important to put in place a document which clearly sets out the terms on which your lawyers are engaged for a particular matter (or groups of matters). In some states this is required by the relevant legal profession legislation. The essential elements that should be dealt with are:

  • Scope of the work
  • Individuals performing the work
  • Charges
  • Estimate of the total cost
  • Requirement to update the estimate
  • Timing

Most lawyers charge on an hourly rate basis using 6-minute time units. It is fairly common to negotiate discounts to standard hourly rates and limits in increases of standard hourly rates. In some cases volume discounts can also be negotiated. It is also increasingly common to negotiate fixed charges or total caps for clearly defined scopes of work. In some cases retainers are negotiated in order to obtain some exclusivity to the services of a particular lawyer.

The key is to insist on clarity and upfront honesty. There is no point in obtaining a fixed price with conditions that are very unlikely to occur or where the work ends up being badly done because it gets delegated to a level that cannot properly perform the work.

5. Providing Instructions

The keys to providing instructions are brevity and clarity. Make sure you discuss your instructions and that they are clearly understood before the work commences. Make sure that they are set out clearly in writing and that you provide clear realistic time frames.

Tell your lawyers "I will be very reasonable with timing requests and we will discuss and agree all deadlines but once we have agreed a deadline I expect it to be done by then".

6. Controlling the Work

It makes a lot of sense for any company to have in place a process for centralising the briefing out of work to external lawyers. In most large companies, the in house legal team does this.

In some companies this role is performed by the financial controller, company secretary or managing director. The main benefits of centralising include:

  • Removing duplication
  • Ensuring clarity and consistency of briefing and use of particular lawyers
  • Ability to spot and resolve related issues or recurring problems
  • Improved management of external lawyers

On individual matters make sure you know who is doing your work. One of the most effective ways to control a matter is to insist on personally meeting and being comfortable with every member of the team that is working on your matter. In large firms in particular there is huge pressure to bill time and as a result large matters tend to have a lot of lawyers billing time to the matter that may not always be required. Therefore, you should know who is on the team and why. Make it clear that you will not be paying for time spent on the matter by anyone else.

As a commercial manager providing instructions to your lawyers it is your role to manage the matter to conclusion. Treat it like any other project by setting deadlines and regularly following up on progress.

7. Settlement

In commercial litigation, where lawyers are being paid on an hourly basis, lawyers have an incentive for the matter to continue as long as possible. As a commercial manager it is your role to endeavour to drive the matter to settlement on satisfactory terms as soon as possible. You should review the matter on a routine basis and make appropriate settlement offers. It is very rare for lawyers to initiate this essential process. You should initiate the process and use your lawyers to give you advise on the most appropriate process and strategies to achieve a good settlement.

8. Review

It is important to conduct regular reviews of the work being performed by your external lawyers. It is often useful to compare competence, timeliness and cost effectiveness on similar matters. This should be done by:

  • Preparing regular reports on outsourced matters
  • Discussing particular matters upon completion both within the company and with your lawyers
  • Reviewing bills very carefully and raising appropriate issues
  • Reviewing the whole process for engaging external lawyers (say every 3 years)

9. Conclusion

The simple strategies outlined in this article should assist commercial managers in briefing external lawyers. Properly applied they have significant potential to improve the value that lawyers can provide as well as the relationship between commercial managers and lawyers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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