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INSIGHT: Choosing When, Why, and How to Hire an Outside Attorney

April 30, 2019, 8:01 AM

As an in-house legal department, how do you go about assembling your outside legal team?

Do you maintain a “relationship” firm, or do you call around looking for counsel when a matter comes up? Do you default to the firm that trained you, or perhaps you call the firm that put on a good CLE on a related subject? How many of you considered hiring contract attorneys for projects?

To answer these questions, remember why outside attorneys are hired in the first place: they know the topic and can accomplish the task more efficiently than the alternatives.

When this happens, and in-house lawyers feel the need to outsource legal work, they usually call a relationship firm. That firm will assign the issue to the attorney best suited to take the case and bill the client accordingly. In an esoteric area of the law, the best suited attorney in a given firm might not be as well suited as the worst at another firm.

To remedy this, most conscientious in-house counsel broaden their networks beyond one or two firms, to include a mix of full-service firms and smaller or even solo firms.

Contract attorneys have a place in that mix as well.

Traditional Contract Attorneys

The contract attorney can be thought of as a solo practitioner that agrees to a limited scope of representation. Limited scope representation has certain drawbacks, but they are largely remedied by the in-house attorney functioning as the supervising attorney instead of a professional client. Because the contract attorney will usually be working under the supervision of the hiring attorney, it is important to ensure that appropriate malpractice policies are in place.

The in-house lawyer serving as the managing attorney gains greater control over the attorney that will actually do the work. The individual contract attorney can be screened, interviewed, and selected without the interference of a partner with a not-insignificant profit motive in the transaction. By shedding the structure of the firm, the contract attorney is also less likely to run into conflicts of interest.

However, the traditional model and the cost of finding and vetting contract attorneys might limit their usefulness. A firm could develop a relationship with a local contract attorney and might eventually make him or her a part of the firm.

Or, the contract attorney might prefer their independence and remain a contractor, instead applying their unique skill set in firms across the city, while not accumulating the conflicts of their employing firms.

Lawyers in general, and in-house counsel in particular, are known to be a risk-adverse bunch. No one wants to put his or her neck out for the sake of saving a little time and a little money. But, in the last several years, thanks to the internet, the transaction costs for both hiring attorneys and contractors has significantly decreased with online freelance marketplaces.

Qualified Online Contract Attorneys—A Click Away

Online marketplaces, like, make it possible to find a contract attorney located just about anywhere, practicing just about any sort of law, to help you with your emerging legal needs. Hiring attorneys, whether in-house or in a firm, can get the attention of thousands of qualified contractors with a single posting.

The relevant contract attorneys are alerted in almost real-time and can indicate their interest immediately. Hiring firms get the benefit of filtering candidates based on any number of criteria like licensed jurisdictions or experience.

On most platforms, hiring attorneys can view past reviews of the candidates’ work and the types of matters they have completed. Because the reviews and experience are hosted by a third party, there is less concern with rating and experience inflation. Payment is handled through the platform as well, eliminating the need for contract attorneys to invoice and collect.

With the reduced transaction costs, general counsels no longer need to go through a firm to find a qualified contract attorney for a discrete task. So long as the hiring attorney is able to articulate what needs to be done, they can post a project to be bid on.

The contract attorney gets the benefit of direct client contact (something often lacking in conventional contract attorney arrangements), and the client avoids the unnecessary markup applied by the firm.

Types of Work

What sort of matters can you outsource to these types of contract attorneys? The answer is anything, really. The first task among equals for a contract attorney is contract drafting. Another is corporate formation or a research memo. These tasks are ones which the value added by the contract attorney is generally known at the outset, does not require a license in a particular jurisdiction, and in which the contract attorney can accurately judge the amount of effort required at the outset.

On the other hand, anything involving court appearances can be tricky, as contract attorneys are typically contracted to work “for” a hiring attorney, and not the client. Some platforms permit you to require certain malpractice insurance requirements, and you can always narrow your search to lawyers licensed in a particular jurisdiction. With other platforms, the contract attorney must fall under your malpractice insurance, because he or she is not functioning as an attorney, per se, but a highly-qualified paralegal (hence the moniker).

Is the contract attorney model right for everyone? No. Some lawyers are ill-equipped to directly manage the attorneys producing work product. Others will struggle to define the terms of the engagement needed to retain a contract attorney on a limited scope.

Still others will not want to blur the line between the advice of counsel coming from an outside firm or the in-house lawyer. These are concerns that should not be disregarded but can be addressed and mitigated with proper planning.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Greg Hoover is the in-house counsel to a small division of a Fortune 100 company. His work focuses on general business law, government contracts, international sales of goods, and export controls.