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What in-house look for in outside counsel



Natalie Rahhal, Washington DC


In Thursday afternoon's corporate track panel session, in-house counsel from Microsoft, The Clearing House Payments Co and Google revealed what they are looking for in an outside counsel match

aipla corporate trackNow more than ever, the relationship between in-house and outside counsel is dynamic and complicated. "Looking for new firms now is sometimes a challenge, because everyone is either representing us in a case or suing us in a case," said Google's Jim Sherwood.

But, the ever-quickening pace of innovation does mean that companies like Google keep one eye on outside practitioners. "Two of the biggest drivers for looking for new outside teams are experience in a particular tech product area and experience in a new forum," he added.

Danielle Johnston Holmes, associate general counsel for Microsoft, said that her company's commitment to diversity extends to its outside counsel hires as well. "We expect them to be at least as diverse as we are," she says. According to Holmes, Microsoft even pays monetary bonuses for diversity in its outside legal team.

The draw of diversity isn't pure principle though, says Sherwood. Among the considerations in choosing the right outside counsel for a given forum, "it's important to us that our team should reflect the jury pool that we're before," he said.

The panel's moderator, Frank Gerratana, a partner at Fish & Richardson, mused that diversity seems to be a trending factor in the search for outside counsel. However, more traditional factors are still at play, but shifting.

Price, for example, is obviously still a very important consideration. Especially now "there's a lot of pricing pressure on IP," said Clearing House's Sean Riley. Outside counsel just can't expect to be able to charge the same hourly rates that they used to, as a fixed fee structure becomes increasingly common.

The pool of outside counsel candidates shrinks as conflicts – whether legal, business, technological, or regulatory – become more common, which means that upfront and early conversations about these potential conflicts are essential.

Sherwood said he was surprised by how much time he spent dealing with [conflict] issues. "To some extent it's a good thing. Firms we work with really do make an effort to raise issues before things go too far."

For Riley – as in-house counsel for a financial services association – business or even technological conflicts are of greater importance. "There's a lot more loyalty when you can bring a larger book over to a firm," he said.

Riley said, although companies have moved away from using law firms for data analytics of their IP portfolios, if a firm's technology is not up to muster it simply can't be trusted. "And, when it comes right down to it, the attorney client relationship is about trust," concluded Holmes.


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