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Vetting Local Counsel with Legal Analytics

In the legal operations world, proactively managing and curating a list of panel firms approved for engagements can be one of the most important compliance functions for legal departments, especially those in highly regulated industries. From a risk perspective, it’s critical for legal departments to ensure they’re not hiring and paying law firms connected to international terrorism or money laundering, so developing a well-formulated and vetted panel capable of handling matters the company may face is a pivotal function.

But as Murphy’s Law would have it, inevitably, legal operations will face legitimate needs to hire non-panel firms on a one-off basis, and quite commonly as local counsel to assist with litigation in a jurisdiction where their panel firms don’t have a presence. Legal ops are then presented with the all-important question of how should local counsel from Phoenix, Paris, or London — or wherever necessary — be properly vetted?

Why hiring local counsel matters

For legal ops to conduct appropriate due diligence on local counsel, it’s important to first have a basic understanding of why hiring local counsel is necessary. Knowing the law is one thing, but understanding local customs is another entirely. The most knowledgeable lawyers in the country can lose a case if they unwittingly enter a hostile forum without assistance or lack a proper command of local rules. This is where working with local counsel helps.

First and foremost, local counsel can act as a sponsor for special or pro hac vice admission for lead counsel on a case. This is an important hurdle to clear at the outset of any case and having a contact through local counsel can expedite the process. Local counsel also understand the local court rules and customs. A client may have the best lawyer in the country for the type of law involved, but if he or she is unfamiliar with the local forum’s rules and particularities, they may find themselves stuck behind multiple layers of frustrating red tape.

Moreover, local counsel can help lead attorneys avoid the risk of being “hometowned” or “homecooked.” In other words, local counsel serves as a known quantity in the local legal community. They have likely appeared in front of the judge in your case and may also know the judge and even the opposing counsel personally from local bar association events and conferences.

While white shoe firms bring the prestige and specialization, local counsel bring the street smarts. Not only do they understand the key decision-makers in cases, the local etiquette, and the procedural hurdles to clear, but local counsel also know how to think, act, and speak like locals — often key to winning over judges and juries.

Conducting due diligence with legal analytics

Once local counsel has been initially selected by in-house counsel or the panel firm managing the litigation, legal ops can then quickly conduct basic due diligence using legal analytics to vet local counsel’s credibility and experience.

First, analytics can reveal the number of cases local counsel has handled (both individual attorneys and their law firms). While not a perfect measure of capability, the volume of cases local counsel has handled will illustrate their general experience and may raise red flags where attorneys and firms have little to no experience in a particular jurisdiction.

Legal analytics can also tell legal ops what types of cases local counsel has handled. If local counsel have never handled the specific type of case at hand, they may not be aware of certain local rules impacting your case type or beneficial procedural moves that could make a substantial difference in a speedy resolution. Handling personal injury auto accident cases does not equal handling high stakes commercial debt collection.

On top of the volume and type of litigation local counsel has handled, it’s important for legal ops to determine whether local counsel has faced the judge overseeing the case. If local counsel have never faced the judge in your case, they likely will not be prepared for certain idiosyncratic procedural preferences of the judge. And even if they do have experience in front of the relevant judge, what have their dispositions been? Do they have a track record of resolving cases favorably? Do they take longer on average to resolve cases than similarly situated attorneys?

In short, legal analytics can help legal ops advise in-house counsel to dodge the avoidable risks associated with hiring inexperienced counsel ill-equipped for the litigation your company is involved in. And it should go without saying, that it’s best to vet local counsel before, not after, engaging them.

Practical tips for engaging local counsel

When it comes to hiring local counsel, legal ops need to understand the nature of the relationship between their company, their panel firms, and local counsel.

Typically, the relationship follows two general scenarios: (1) your panel firm directly sources and hires the local counsel and is the “client” or (2) your in-house legal team hires local counsel and is the “client,” whether or not the panel firm is involved in selecting local counsel. No matter which scenario is in play, there are two golden rules that should be adhered to by legal ops.

First, know who’s responsible for paying local counsel’s fees. Local counsel may bill your legal department directly or bill your panel firm directly, which then will either pass through the invoices to your team for payment or absorb the costs completely. Determining this at the outset can help legal ops develop more accurate budgets for litigation matters and avoid any unexpected legal spend later down the road and/or having the local counsel relationship sour from overdue invoices.

Second, legal ops should always secure a copy of the engagement letter before commencing work with local counsel. While this is easier in situations where in-house counsel directly hires local counsel, it is even more important if your panel firm handles the hiring. Beyond further solidifying who pays local counsel’s fees, it’s important to make sure you are not (through your panel firm) agreeing to unacceptable terms, such as indemnification clauses, advanced waivers of conflicts of interest, or other terms that run afoul of your internal legal or compliance policies.

To ensure these best practices are followed, it may also be wise for legal ops to include these items in their outside counsel guidelines. By formerly establishing who’s responsible for paying local counsel and cementing the requirement that legal ops must obtain a copy of the engagement letter before local counsel can begin work, it not only removes unnecessary risks, but it also provides your panel firms and local counsel with the level of certainty needed to build a working relationship.

Managing risks and moving forward

Hiring local counsel can be an important tactic for managing litigation in unfamiliar jurisdictions. There are times where additional support is necessary to ensure your panel firms properly navigate local rules, to avoid being “hometowned” or “homecooked,” and to obtain insider knowledge on local judges, juries, and venues.

Legal ops can leverage legal analytics to quickly resolve underlying questions about local counsel’s level of experience and supply in-house counsel with the information needed to better protect their company’s interests. Not to mention, with the advances in legal technology, there are now several providers offering out of the box analytics solutions to help legal ops obtain the data they need on the attorneys and law firms they are hiring.

About the Author

Jeff Cox is the director of content and data acquisition for UniCourt, a SaaS offering using machine learning to disrupt the way court records are organized, accessed, and used. He is a Florida attorney who loves all things legaltech and volunteering with local legal aid programs in Tampa.


The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.