Show some spine, in-house counsel! You run the show when you retain M&A counsel!

It was the pusillanimous tone, the tenor of the part on outside counsel expense, the obsequiousness assumed for in-house lawyers that bothered me. An article in the ACC Docket, May 2011 at 56, entitled “100 Issues to Clarify with Your M&A Counsel” sketches a two-lawyer department engaging outside counsel for a potential sale of the company. That’s a big deal, to be sure, but cost discipline doesn’t therefore evaporate.

The article hints at a competitive process by which the department selected M&A counsel (see issue 16 about bait and switch) so what perturbed me were the dozen issues under “Legal fees and expenses” that seemed to come into play only after the selection. The points covered make sense, but the subordinate, beseeching attitude may appeal to law firms but should repel law departments.

Here is one example. “Understand whether M&A counsel would consider discounting standard hourly rates.” Would consider?? How about: “Tell counsel the tiered discount rate they will grant.” Or another timid suggestion: “Understand whether M&A counsel would consider any alternative fee arrangements.” Why so mealy-mouthed? Why should the seller of services, commonly provided services, call the shots? Tell them one-third of their fee depends on your evaluation of their performance. Later in the listing: “Consider whether to have M&A counsel provide a forecast or budget for legal fees to be incurred …” No, stand up and decree “You will submit a bi-weekly budget in the form attached to this RFP.” And one more without boldness. “Discuss with M&A counsel whether it or the company should consider retaining temporary or contract attorneys as a way to reduce fees and expenses.” Stop groveling and parlaying! “You will use the X Agency for all temp lawyers and only temp lawyers will do document review.”

Are you in charge of external counsel or are you begging?

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