Legal partnerships with outside counsel are evolving from transactional, billable-hour relationships into strategic alliances focused on holistic value. By prioritizing communication, structured evaluation, and transparent billing, corporate legal departments (CLDs) can align outside counsel with broader business goals for better outcomes. Insights shared at the ELM Amplify 2025 user conference highlight a critical move toward strategic partnering.
What is the "partnership equation" in legal services?
Historically, value in legal services was often conflated with cost reduction. If a firm lowered its rates, it was perceived as providing value. Today, leading industry experts argue that value is a complex equation involving quality, predictability, alignment, and efficiency.
The "Partnership Equation" is a modern approach to legal services where value is defined by quality, predictability, alignment, and efficiency, rather than just cost reduction. It treats law firms as strategic extensions of the in-house team rather than mere vendors. This shift requires transparency regarding business objectives so outside counsel can provide creative, practical solutions that drive the company forward.
Why is deliberate communication critical for legal partnerships?
Deliberate communication builds trust and ensures expectations remain aligned between CLDs and outside counsel. Instead of communicating only during crises or billing cycles, successful legal departments establish proactive channels for regular feedback.
Strategies for effective communication include:
- Regular check-ins: Scheduled updates separate from specific case discussions.
- Strategic annual conversations: Discussions focused on long-term goals, succession planning, and performance.
- Proactive ownership: Legal departments taking the lead in establishing feedback loops.
How can legal departments build strategic partnerships?
Structured programs help integrate outside counsel into the client's culture and operational reality. These initiatives move beyond informal relationships to maximize the partnership's potential.
Learning days for law firms
"Learning Days" or "Defense Days" invite outside counsel to the client's campus to learn about the business rather than bill hours. Agendas often include:
- Manufacturing center or other business-critical facility tours
- Fireside chats with the General Counsel
- Panels on the company's future
Programs do not have to be perfect to be effective; they simply need to be intentional. The goal is to integrate outside counsel into the culture and operational reality of the client.
How do metrics drive value in legal operations?
When legal departments ask their internal stakeholders what "value" means, the answers rarely focus solely on price. Instead, words like "alignment," "outcomes," "predictability," "responsiveness," and "innovation" dominate the conversation.
Counsel report cards
Comprehensive annual evaluations, or "counsel report cards," are standard practice for assessing firm performance. Common evaluation categories include:
- File management: Timeliness and clarity of plans
- Knowledge/skill: Soundness of legal strategy
- Service: Accessibility and professionalism
- Compliance: Adheres to administrative requirements, including billing and budgeting
However, collecting data is only half the battle. Transparency is vital. Sharing report cards and performance data allows firms to celebrate their wins and address specific areas of concern. It transforms the relationship from a black box into a transparent partnership.
What are common billing issues with outside counsel?
Deep dives into billing data often reveal friction points that stem from poor communication regarding expectations. Common recurring issues include:
- Non-billable staff tasks: Invoicing for administrative work like scheduling or file organization
- Duplicative charges: Multiple attorneys billing for reviewing the same documents
- Excessive summaries: Long-winded reports where concise summaries would suffice
- Inefficient staffing ratios: Partners billing for routine matters that should be delegated to associates
Addressing these issues requires clear billing guidelines and frank conversations. It is not about "nickel-and-diming" the firm; it is about ensuring that the spend aligns with the value received.
By implementing simple steps, such as sharing KPIs, creating a basic feedback loop, or hosting a single strategic planning session, legal departments can begin to change the dynamic. Whether it is refining billing guidelines or initiating a performance conversation, every move toward transparency and alignment creates value that extends far beyond the hourly rate.
