Published on:

Caution against finger-pointing if (when) some cost-reduction decision boomerangs

Behind selection of the key partner to handle a matter, the most effective way to moderate costs is for thoughtful in-house lawyers to shape, narrow and target the legal services provided by the partner. “Take only those five depositions.” “Don’t draft or negotiate over the risks of the joint venture’s jurisdictional basis.” “Accept indemnification to the maximum of twice annual fees.” “Research no more than three hours on force majeure.”

Decisions to have the law firm that represents you leave some stones unturned will lower your external costs, often dramatically, but somewhere later one of those decision will bite you. Life is too complicated for that not to happen and people are too human not to want to blame, point fingers, and evade accountability.

Unfortunately, the fear of retribution and the urge to toss the hot potato of mistake will clobber cost control efforts going forward. Since effective cost control of outside counsel means decisions, some level of misjudgment – always spotted after the fact – must be tolerated.