An elaborate rating system to evaluate the performance of outside counsel (Caterpillar)

In 2005, the law department of Caterpillar was chosen as one of five law departments selected as visionary thinkers by Corporate Counsel magazine. This year, in a reprise, Corp. Counsel, Vol. 13, Dec. 2006 at 89, describes the subsequent expansion of the department’s annual law-firm grading system.

“The 1-to-5 rating scale has been expanded to include 60 questions in five major areas: strategic input, operations, cost/billing, overall performance, and technical savvy; firms are graded in each area.” Lawyers in Caterpillar’s law department apply this elaborate evaluation to all ten law firms selected to get the bulk of the approximately $32.5 million of products liability work the department has to offer each year, as well as many other firms because the grading system has been replicated in all legal areas across the company’s 27 international legal offices.

This is surely one of the most comprehensive, fine-grained assessment programs underway (See my posts of Nov. 1, 2005 about most departments’ shortcomings in this area; Nov. 16, 2005 on some evaluation tools and references cited.).