A recent American Lawyer story by Dan Packel, “‘Technology Alone Is Not the Answer’ Wilmer Revisits Outside Counsel Guidelines,” reports that the number of outside counsel guidelines that attorneys and administrators at Wilmer Cutler Pickering Hale and Dorr have to juggle is striking.  In total, the firm is sitting on approximately 1,000 documents, after receiving, in 2019 alone, roughly 260 new retainer agreements or updates to existing guidelines that stipulate what clients expect from the attorneys they are hiring. 

Wilmer isn’t the only law firm dealing with heightened standards from corporate clients about what they’ll pay for and what they won’t.  A recent study from timekeeping technology company Bellefield and the Association of Legal Administrators estimated the cost of compliance with these guidelines at nearly $4 million annually for some firms.  “There are a lot of process failures out there,” said Kyle Liepelt, who was named Wilmer’s first dedicated outside counsel guidelines administrator in February 2018.  “Technology alone is not the answer.”

When Wilmer began the process of reevaluating how it dealt with these guidelines in 2017, leaders found that—unlike the majority of the firms responding to the Bellefield and ALA survey—it was over-complying with guidelines.  Instead of losing money through rejected bills, convoluted appeals and write-downs, attorneys were being overly cautious in their billing.

“We couldn’t arm our partners to the nuances of these client differences,” said Steve Smith, the firm’s director of matter management services, describing a problem of “excessive diligence.”  “That impact, both in time and money, to communicate the complexity around outside counsel guidelines, that’s time that we should have been spending adding real value to our clients,” he continued. 

Following an initial workshop, one of Wilmer’s first steps was to create the centralized administrator position held by Liepelt, who spent the previous five years as a conflicts specialist in the firm’s new business department.  Each set of new guidelines goes directly to him, and he’s responsible for reviewing their terms, looping in the relationship partner and the billing partners on a given matter.

Room For Negotiations

These conversations aren’t just to circulate the substance of what clients are demanding.  Wilmer is not afraid to push back on terms that the firm would prefer not to agree to.  Liepelt said that his conversations within the industry showed that’s not always the case elsewhere.  “A lot of firms often receive them and that’s it, there’s no real discussion about them.  They may post them, so people can see them, but there’s no discussion on substance,” he said. 

According to the Bellefield and ALA survey, 23% of firms make no effort to share guidelines with attorneys, while 24% simply post them on the firm’s intranet.  While 52% share guidelines via email, the survey did not capture whether this is the prelude to a wider discussion, let alone to a response to the client.  But Liepelt said that the reaction is generally positive. At the very least, clients appreciate that the firm is carefully considering the guidelines.

“When it comes to the recommendations that we give, it’s a mixed bag.  Some say, ‘This is what it is, and we want you to follow it,’” he said “Other times there’s a negotiation back and forth and we arrive somewhere in the middle.”  Liepelt will often handle these conversations with the client, particularly if the attorneys don’t want to get involved.  “Discussion can be a burden on attorneys,” he said.  “I try to relieve them of any potential conflict.”

Into The Database

If these conversations illustrate the human side of the process, the technical side takes the forefront once any negotiations are finished.  The Wilmer team looked to a database to help solve the problem of scale, teaming with a vendor that had its own outside counsel guidelines solution and using the underlying workflow and source code to built their own unique design.  Each client’s guidelines are broken down into a data record with component terms highlighted, and attorneys and staff can search for terms and easily access the source documents.

Smith gave the example of different clients specifying what personnel can and can’t be used.  Some bar paralegals, others rule out first-year associates, still others place caps on each category for a given matter.  “We can surface those,” he said.  “We have a standardized process to review them very quickly.”

When updated versions of guidelines roll in, Liepelt can turn to the database to identify what’s changed, then rapidly point out the differences to the partners involved.  When looking at intranet profiles for the firm’s attorneys, he and others can follow links to see what outside counsel guidelines apply to each matter they’re working on, guiding conversations about matter efficiency.  And, in the unlikely event of a data breach, the firm can quickly pull up the list of clients that need to be notified within 24 hours.

A Bellwether for the Relationship

One year into the new system, the feedback, from both inside and outside the firm, has been overwhelmingly positive, according to Smith and Liepelt.  Partners appreciate having an internal point person to whom they can direct their inquiries and concerns, while staff have the information at their disposal to do pre-bill auditing.  Turnaround time with clients has decreased by 25%.

“The delays are less on our side and more on their side,” Leipelt said. “We’re much more responsive than we were, and that leads to better relationships.”  Beyond that, the new system offers a selling point when it comes to marketing the firm.  “There’s not an RFP that we see these days that doesn’t specifically ask us what are the firm’s capabilities in innovation and improving processes,” Smith said. “How we handle outside counsel guidelines is a bellwether for our stewardship of their financial resources.”