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    January/February 2020

    Taking the Lead

    Developing Legal Solutions Through Inside-Outside Collaboration

    Linda Klein and John Hinton IV

    Today’s corporate clients require innovative solutions, efficient service delivery and value-based billing—all specifically tailored to meet their needs. Companies large enough to have in-house counsel are finding that closer collaboration with their outside counsel and other professionals helps deliver results. They achieve successful outcomes by combining the best of two worlds to develop these solutions:  a breadth of multiple perspectives and solutions (outside) with depth of understanding and compatibility (inside).

    We recently discussed this topic with an old friend, Charles Bowen, adjunct professor at Georgia State Law School. Bowen previously held several key positions within a large corporate organization and recently served as general counsel for a large family office. Here’s what we learned. 

    How has your legal experience provided you insights on how law firms can better collaborate with their clients?

    Bowen: I’ve been fortunate to have worked in both “inside” and “outside” settings, in particular within a large holding company where we had a line of sight into multiple business units but no direct revenue or P&L responsibility. In that role, our success metrics were in the nature of influence, support and connecting the dots between different businesses. You could be both an inside and, to some degree, an outside partner—i.e., being embedded but also objective. With those shared values and objectives, the work is almost always done “better together.”

    I found this approach helped unlock latent knowledge within our organizations that tends to remain in individual silos—corporate departments, law firm practice groups, even people in the same office. McKinsey did a study in 2015 which found that 70 percent of change management initiatives fail, and the top reasons were employee resistance and knowledge siloing. So your organization might have substantial knowledge, but it often takes a law firm or external partner to help you identify and apply it.   

    I hear a lot about the concept of the “T-shaped” professional, popularized by IDEO in the design thinking field. For legal, the idea is that you have a professional with deep expertise in a specific legal area but also with a breadth of experience in multifunctional areas like strategy or technology. You can see this happening in large organizations. When you can develop team members with aspects of both, breadth of expertise and depth of knowledge, you have a T-shaped advisor, whether contained in one person or collectively through an inside-outside approach.

    With more people moving between jobs, is this type of approach sustainable?

    Yes, but the reasons why may seem counterintuitive. I saw in some of our outside relationships longer tenure than on the inside because company employees often change roles and functions, even when they remain in the company. Whereas on the outside, particularly with the trend of “convergence,” selecting panels of a smaller cohort of firms, there are firms who will invest time to learn your culture, your objectives and risk tolerances, and that investment can be leveraged for the long term even while a broader stable of outside relationships can be explored and used as needed. So the outside professionals can balance each other as well as balance our inside team.

    What are some examples of how you used this inside-outside approach?  

    From a substantive law standpoint, my department supported a small business with recurring collection matters. Our outside law firm collaborated with our inside legal department to develop a set of template communications and pleadings that could be customized with minimal expert involvement. On the project management side, we had a group from one of our outside firms spend two days with us to unbundle our most common M&A transaction types and develop a cost estimate for each phase, which gave us budget clarity for these projects. These inside-outside projects helped us develop relationships with skilled outside providers who understood and developed the right solutions for us—based on a wide body of experience and knowledge but customized to meet our needs. We could not have done this on our own nor could an outside law firm have done this without inside participation.

    Is this approach a long-term trend?

    I believe this trend will continue to shape the way we buy and sell legal services. The approach aligns with the shared economy, i.e., using resources for specified periods of time instead of owning them. If I have an outside partner with a deep knowledge developed over multiple client representations, I can reach out to them for help as needed, either for long-range planning or as-needed. Thus, although our inside team has a broad set of skills that cover wide sectors of our business, we don’t have to stretch these skills into subject areas where an outside advisor might have more expertise.      

    Do folks on the inside embrace this level of involvement by “outsiders”?

    Unfortunately, inviting closer collaboration with outside partners is not always welcomed by team members on the inside. You may get resistance from people who view internal information as job security, are skeptical of solutions “not invented here” or simply are not comfortable with change. However, in my experience, successful outside partners listen with empathy, focus on win-win outcomes and bring examples of success from other clients. That’s how they overcome these barriers.

    What benefits to collaboration are not readily apparent at a first glance? 

    I am convinced, as are other general counsels I know, that inside-outside collaborations will create more opportunities for diversity and inclusion. Think about it—if you limit your planning and legal work to just one provider, or one set of providers, it is by definition a smaller pool. When you unbundle projects and work with multiple outside partners, there will be more opportunities for new and diverse providers. That benefits both the pool of providers and the client. 

    Linda Klein

    Linda Klein is a past president of the ABA and senior managing shareholder at Baker Donelson. She is a frequent speaker on law practice, construction and higher education law. [email protected]

     

    John Hinton IV

    John Hinton IV is a shareholder in Baker Donelson’s Atlanta office. His practice focuses on commercial litigation and construction law. [email protected]