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The Singapore Law Gazette

Selecting and Evaluating External Legal Counsel

What In-house Legal Teams Look For

While in-house legal departments are often responsible for providing almost all legal services to their organisations, sometimes the services of external lawyers are engaged for the following reasons:

  1. Expertise and experience in specific areas of law. For example, legal issues in a foreign jurisdiction or a one-off project.
  2. Provide an external perspective to ensure impartiality or to avoid conflicts of interest.
  3. Additional resources are required and it makes little commercial sense to increase headcount in the short term.

When engaging external legal counsel, in-house legal teams will try to manage external law firms to ensure that legal projects are completed on time, within budget, and to a high standard of quality by attempting the following:

  1. Define scope of work, goals and performance expectations for the legal project, including deadlines, deliverables and quality standards.
  2. Evaluate the law firm for expertise, reputation, and resources to meet the organisation’s needs.
  3. Establish clear lines of communication between the in-house legal team and the external law firm to ensure regular and effective communication throughout the project.
  4. Monitor the progress of the legal project and provide feedback to the external law firm as necessary.
  5. Manage costs and expenses associated with the legal project and ensure that the external law firm is transparent about its billing practices.
  6. Evaluate the performance of the external law firm after completion of the project and use the results to improve future collaborations.

This article discusses what in-house legal departments look for when selecting a law firm and how a law firm is evaluated after completion of work.

Selection Criteria

In-house legal teams typically use the following criteria when selecting an external law firm:

1. Expertise

The external law firm should have a proven track record and specialised expertise in the specific area of law required by the organisation.

2. Reputation

The law firm should have a positive reputation in the legal community and its lawyers should have a history of delivering high-quality work.

Industry awards and rankings aside, the in-house legal team will want to know the law firm’s track record in carrying out similar work. Testimonials from other relevant clients are useful in the assessment of the law firm’s work and reliability.

3. People

In addition to knowledge, expertise and a commitment to excellent service, lawyers who have good people skills (able to deal with senior management and not just the in-house legal team), who are commercially minded and who will adapt quickly and flexibly to changing requirements and demands are plus factors.

Clients are aware that notwithstanding a partner with a stellar reputation is “fronting” their matter, the work will be delegated. It is particularly important to highlight the expertise of the junior supporting team in the pitch process.

4. Cost

In-house legal teams expect the law firm to take a commercial approach to predicting cost and agreeing budgets based on outcomes and not just time-based inputs.

The law firm should offer competitive rates and be transparent about its billing practices. In-house teams are often faced with budget constraints. While they may not be looking for the “cheapest”, they do want fee options that they can “sell internally” to their senior management.

It is helpful if the law firm is able to proactively address matters such as predictive costs and budget caps, particularly where the work is complex and outcomes less certain.

5. Communication / Proposed approach to work

The law firm should demonstrate that it has the resources and manpower to handle the organisation’s needs in a timely and effective manner.

It is common for law firms to pitch systems, processes and technologies engaged to carry out the work. However, it is more important to demonstrate how the law firm works towards agreed outcomes (of the matter).

There are many instances where a major law firm is engaged because of perceived expertise, only for the client to find the law firm assigning a plethora of timekeepers to their matter, including trainees or even temporary contract lawyers, to do the work. This not only results in greater costs but also inefficiencies because of the number of people who have to be educated on the matter and kept up to speed.

The law firm must be able to demonstrate how it intends to provide concise, regular updates on the matter and costs so that in-house legal team can easily share the information with other colleagues and management in the organisation.

Agreeing on a project team and outlining a plan to manage the matter, including tactics for reaching potential early resolution points and how the planned milestones are monitored with periodic status updates are some examples.

6. Meet the basic requirements of the request for proposal (RFP)

It is critical that the law firm understands engagement objectives and milestones. Engaging the in-house legal team to understand the issues during the RFP process is helpful as it demonstrates that the firm is keen to do the work.

It is critical that the law firm submits its response to RFP on time as it is a reflection of the law firm’s interest and ability to complete work on time.

Evaluation Criteria

Following the completion of work by an external law firm, in-house legal teams typically conduct an evaluation to consider whether they would use the external law firm again in the future and whether they would recommend the firm to others.

The following are examples of factors used to evaluate the law firm.

1. Met client’s objectives and expectations

The law firm understood engagement objectives and milestones and was able to reflectively “read back” questions and task assignments to ensure client and firm are in sync.

2. Expertise

The law firm was able to demonstrate a strong knowledge of substantive and procedural law, opposing counsel and regulatory authorities (where applicable) and able to think creatively about the client’s problems and offer practical solutions.

3. Responsiveness/Communications

The law firm was able to help the in-house legal team manage the matter by being clear and direct in its advice, however challenging that may be. It was not just about telling the in-house team only what the firm thought they wanted to hear.

It kept the client apprised of progress and developments and its team of lawyers were reliable and timely in responses to queries, deadlines and any performance‐related concerns raised by the client.

4. Efficiency/Process Management

The firm was able to complete the matter at the most cost-effective level and the work product delivered is good value relative to the amount of time spent.

Sufficient lead time was given to the in-house legal team to review and comment on documents. This is important for the in-house legal team as it enables them to manage their workflow internally amongst departments and senior management.

5. Predictable Cost/Budget

The project was managed within budget conscientiously and variance from budget was communicated promptly and approvals were obtained from the client.

6. Results Delivered/Execution

Most importantly, objectives of the project were met.

It is important for the in-house legal team to get the appointment of the external legal counsel right as getting it wrong can reflect badly on the in-house team and result in some difficult conversations with management. Getting it right not only means that the work is carried out to a high standard on acceptable terms, it helps enhance the reputation of the in-house team for good management and judgment.

Sample Selection Score Card

  Criteria xx xx xx xx Remarks
1 Meets basic requirements of RFP          
2 Understands scope of work          
3 Demonstrates adequate resources          
4 Qualifications of team          
5 Experience with similar clients / matters          
6 Pricing          
7 Responsiveness / Demonstrates interest in doing the work          
  Total score          

4 – Far exceeds expectations
3 – Exceeds expectations
2 – Meets expectations
1 – Partially meets expectations
0 – Does not meet expectations

Sample Evaluation Score Card

  Criteria Rating
1 Quality of work

Met objectives and milestones and demonstrated expertise.

Able to complete the matter at the most cost-effective level and the work product delivered is good value relative to the amount of time spent.

2 Timeliness

Able to complete work on time and within the agreed timeline.

3 Communication

Level of communication and collaboration between the external law firm and client, including the responsiveness of the firm to questions and concerns.

4 Cost

Cost of the services, including any unexpected fees or expenses, and compare it to the original budget.

5 Outcome

Organisations goals and objectives were met.

  Total score  

1 – Poor
2 – Fair
3 – Good
4 – Very Good
5 – Excellent

Angeline has more than 30 years’ experience in the legal profession, having practised corporate law before specializing in knowledge and practice management in law firms.