Mark Chandler, the general counsel at Cisco Systems. He has more than two years heading the law department and manages a 120 person staff of attorneys, contract and regulatory professionals and information technology specialists located in sixteen countries.

Anastasia Kelly, the new general counsel at MCI, which has a law department of about 300 lawyers. She served as SVP and General Counsel for Sears Roebuck & Co. Previously, Kelly was SVP, General Counsel and Corporate Secretary for Fannie Mae. Kelly has also served the Chair of the Chief Legal Officers of the 21st Century Advisory Group (CLO21), a group of 32 CLO’s of major companies working together to develop new and more effective corporate strategies.

Michele Mayes, the general counsel at Pitney Bowes. Her extensive legal and global experience was obtained through holding a variety of positions, including VP and Associate General Counsel of Unisys and Colgate Palmolive.

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Poor communication is fatal 

Mr. Johnson: Mark, what are the reasons that law firms are fired?

Mr. Chandler: I think the first reason is poor communication, like things happening that we didn’t have a heads up about, so we get surprised by an outcome. That would be the number one reason.  It’s failure of communication, particularly about downside risk.

Second is poor work product, marked by an inability to supervise. We’ll usually go back and say, “Well, such and such a person isn’t doing a very good job. I can write that memo better myself " and so forth.” I have people in my department who felt that way about some outside counsel. If there isn’t timely action taken to replace staff who aren’t performing adequately.  That can be a big problem.

Third, I’d say talking to the press about their relationship with us. Some firms seem unable to do their work for us without trying to advertise that through the press, often at the expense of other firms that are doing work for us. And I don’t look kindly on that. I don’t think there’s any reason that a law firm needs to talk about their relationship with us without having previously discussed that with us. That’s a pretty surefire way to get fired.

Ms. Kelly: I would agree with Mark that the most common reason a law firm gets fired goes back to an underlying failure to communicate. But I would say that this is probably not just the fault of outside counsel. I think it’s a very difficult dynamic for inside and outside counsel to make sure that they’re on the same page with what a client expects and what the law firm thinks the client expects.

Sometimes that’s not the fault of the in-house person because they often times don’t know what their company expects. And those expectations change along the way. And sometimes they communicate that to outside counsel and sometimes they don’t. One of the things I think helps in this area is for outside counsel to constantly communicate with inside counsel on, “Are we doing what you want? Are we heading in the right direction? Do you think this is what your company is looking for? Is there another way that we can handle that?”

So often that conversation only happens at the beginning of the assignment. And the next thing that happens is that there’s a finished product and while it might be a fine work product, it might not be, at that point, a responsive work product. And there are many discussions that happen between inside and outside counsel, there's a little bit of finger-pointing, like “Well, you didn’t tell me this. And I didn’t understand that.” If the communication channels were open and used along the way, it might mitigate the possibility that the failure to communicate will result in the law firm not receiving any more work from the client. But I find it unusual.  It’s not very often that poor work product is the reason. It’s just maybe not the work product that’s responsive to what the client wants.

The other piece I think that’s important here is that sometimes outside counsel is perceived as not being forthcoming with in-house counsel with their own honest opinion about what the client’s asking for. I want a law firm that pushes back, that says to me, “Are you guys nuts?” or “Do you really want this?” or “Is this the direction you really think you should be headed? Have you thought about X, Y, and Z?” and not just take the direction from the client and produce something that at the end of the day is not helpful.

Seeing Conflicts

Ms. Mayes: Let me just put it on the table. I think that everybody has what they call "guidelines." I wonder if outside counsel see our guidelines like we see their brochures. I don’t know whether there is so much written that nobody really stops to read, and follows with a dialogue that says, “You know, we really don’t work that way,” or “If we work that way, we need to make these adjustments or this is what it will mean.”

I just get the impression that folks really don’t pay a lot of attention the guidelines and maybe the question is "why?" Because that is our attempt, at least initially, to say, these are rules of the road. I’d like at some point to be able to understand why people perceive our guidelines as just for the round file.

There’s one area that we haven’t touched upon that I find there is frequently a difference of opinion. Because the firms have gone through merger mania where a lot of firms that once existed don’t, or partners make lateral moves, and conflicts arise. I have found that most firms don’t want to see them as readily as I do. In some ways I’m disappointed by that.

I actually had a debate with someone as recently as two days ago about why I saw something as a conflict. Their view was, "If it isn’t biting you in the ‘you know what,’ it’s not a conflict." And I said, “But I see it as divided loyalty.” That’s where we got into this round robin about why I was analyzing something one way and they saw it the other.

I’ve had to walk away from firms unexpectedly because some merger has happened and lo and behold, we’ve got a situation that we find untenable. And it may not be an extreme conflict, but they end up representing a competitor. And then we make a policy decision at that juncture that we can’t leave our work there because if a conflict does arise we’d be out of luck. So that is another reason why I might walk away from a firm.

"Fire the firm. Don't tell them."

 

Mr. Johnson: Moving to the next topic of marginalization. Many times law firms are not fired, they just receive less work. How can a law firm ascertain the difference between getting assigned fewer matters because the overall volume of work for the client is decreasing versus just their firm getting fewer matters?

Ms. Mayes: I suppose they could ask. I find that people hate to deliver bad news.  Sometimes it could be a change in who the general counsel is. It may have nothing to do with the quality of work that you’ve been doing. But there are times when it is because of some of the things we’ve just talked about – failure to communicate, not being cost-effective, poor work product.

I have a strong belief that if you are dissatisfied with something, it needs to be discussed. If the firm believes that it is not being told the real reason because it is an uncomfortable conversation, I don’t see why they wouldn’t reach out to someone and say, “My sense of this…” because they can see that new cases come on frequently. They watch the court filings and lo and behold -- they’re not the one hired for the case. So I go back to the simple question, “Where’s the communication?”

Ms. Kelly: I totally agree with that. And I really do believe that if a law firm starts seeing a downward trend in their business, they should ask.  But truly, inside counsel, has a responsibility if there is any kind of dissatisfaction or problem. I think they owe it to outside counsel to be honest with them. And if they’re not getting satisfactory answers, I’d bring it up to a level where you get answers because generally there’s a reason why a law firm doesn’t get more work.

Sometimes there’s no more work to be had -- and that has happened to me.  At times I really wanted to work with a particular law firm in a particular area, but we had no relevant matters at the time to direct to the firm. The firm thought I was just not giving them work. We finally had that conversation and they felt better that at least there wasn’t a reason I wasn’t giving them work.

It’s either that or there’s some dissatisfaction with the work that they’ve done and outside counsel needs to be made aware of that. It's the only way that you’re going to be able not to make the same mistake twice.

Mr. Chandler: Well, I think that I’ve never found anybody happy with negative communication. I think marginalization is sort of copout if you’ve decided not to use a firm anymore. People do need to be direct about what the issues are. I certainly have found some situations where we’ve told people what the problems are and they’ve been very unhappy to have been told.

In other situations people found their work going away and they weren’t sure why and they were unhappy with that, too. So I don’t have a clear answer, other than to agree that at the advice level it’s better to be communicating than not to be communicating. I realize that’s not very helpful. And I can’t say we’ve always done a good job at it.

Mr. Johnson: In some departments there’s an unwritten rule, “Fire the firm. Don’t tell them.” What do you do when you have the wrong partner on a matter? What do you do when you have the wrong firm?

Ms. Mayes: I go back to the C-word. I go back to communicating because one of the things that is also plausible, is that even though you’ve made this assessment of the firm, your point of view is not necessarily the one that should prevail. I have had discussions where I’ve assessed something, and maybe I didn’t fully understand the dynamic that was occurring at the time, and I haven’t been as harsh in my judgment after having the dialogue.

Not that the firm was happy, but the fact is, it was a hell of a lot more knowledgeable about what the problems were. So if I’ve got the wrong partner, I can either dump the firm, and the firm would not be happy about that, or I can try and work it out to see if there’s someone who’s more appropriate for my matter. And I have done that.