A four-hour grace period to consult outside counsel

During a conference held January 23, 2003 in Paris, the European General Counsel of DANA Corp., Michel Cloes, described that company’s strategy to balance cost control with the need for clients to obtain timely external legal advice. According to Connections, Vol. 3, Summer 2003 at 8, managers at DANA “have the discretion to go straight to an approved outside lawyer for advice, but only if it involves less than four hours’ work.”

Note the conditions: the law department has approved the outside lawyer beforehand, and possibly even for certain kinds of legal work only; only managers presumably of a certain level can exercise this limited right; and both the law firm and the manager are accountable for the four-hour limit and therefore costs. So long as the law firm knows about this deputization, if it bills for more time, its hours beyond four could be subject to rejection.

I endorse this strategy, with two small suggestions. A dollar amount might be better, as it would encourage clients to seek a firm whose cost structure befits the legal advice sought. And, there ought to be a time frame in which the ad hoc advice can be sought, without law department involvement, such as no more frequently than once a week.