June 2004

Leadership in Lawyering
The Role of Leadership in Effective Collaboration Between Corporate and Outside Counsel

by Greg Tolbert, David Goodnight, and Vanessa Power

We have all heard horror stories about cases spinning wildly out of control, fees increasing exponentially, and clients feeling drained and unhappy with final results. There is never one simple reason for such unfortunate situations, but there is often one common denominator in the equation: lack of leadership.

When we talk about leadership, images of political and military leaders — from Winston Churchill to General Dwight D. Eisenhower — may come to mind. We do not generally think about the critical role leadership plays in every-day lawyering. When selecting outside counsel, corporate counsel generally look at a firm's reputation and a lawyer's academic credentials, expertise, and experience; and talk to friends and colleagues about their options.

What is not often (or easily) assessed is the leadership quotient. This is the vital, and too often missing, component in effective collaboration between corporate and outside counsel.

The long-term health and stability of client relationships should be a primary concern for outside counsel. To develop healthy and stable client relationships, outside counsel need to work with corporate counsel to set common goals and objectives. This takes "bifocal" vision — the ability to take short-term needs into account while guiding action toward reaching long-term business goals. Ultimately, it takes leadership in lawyering.

This article is divided into three sections. The first covers the basics of effective collaboration, identifying typical mistakes and the key components of healthy partnerships. The second analyzes the role of personality, and leadership in particular, in successful partnering between corporate and outside counsel and in effective representation. The third provides practical tips for effective collaboration.

The Basics of Effective Collaboration
We begin, of course, where we always begin. Every client — small or large — desires high-quality legal representation at a reasonable cost. Simple enough, but not always achieved.
In this section, we discuss three keys to effective collaboration. First, however, we identify typical mistakes that must — absolutely must — be pushed out of a relationship to collaborate effectively.

Typical mistakes
There are numerous barriers to effective collaboration. Both corporate and outside counsel should be sensitive to the following and develop appropriate practices to minimize the deleterious effects of these barriers to effective collaboration:

• Failure to communicate;
• Failure to plan;
• Adding baggage, not value;
• Ignoring billing and budgeting; and
• Doing unnecessary work.

At the risk of oversimplifying things, effective collaboration is both a high-level commitment to successful partnering (i.e., attitude matters) and a hands-on practical approach to delivering more value through practices that enable better collaboration.

Key components of successful partnerships
As with all things in life, before you can progress, you need to master the basics. In developing an effective relationship between corporate and outside counsel there are "Three Bs" to keep in mind:

1.  Outside counsel should become insiders to the business;
2.  Pay attention to billing and budgeting; and
3.  Balance the competencies of corporate and outside counsel.1

1. Business 101
Effective collaboration between corporate and outside counsel is not "business as usual." It will not occur without the active commitment of both corporate counsel and outside counsel, and it will not occur without a front-end understanding of the company and the business.
To educate outside counsel about the company's business and/or the company's approach to legal representation, corporate law departments may wish to provide an orientation session for outside counsel. These structured sessions (which likely generate the most value for significant legal representations — e.g., multiparty litigation, class actions, large acquisitions or divestitures, initial public offerings, etc.) for individual attorneys, a key law firm, or multiple firms provide an opportunity to get everyone on the same page, provide an insight to the corporation and its culture, and leverage the corporation's existing resources.

2. Pay attention to billing and budgeting
Although there are obvious reasons to substantiate the need for effective collaboration between corporate and outside counsel, one explanation that is always current is money, money, money. Simply stated, for most corporate law departments, the expense of outside counsel is the largest single budget item. Although effective collaboration between corporate counsel and outside counsel does not necessarily equate with lower outside-counsel expenses, it does help improve the odds considerably that those monies will be well spent in the course of serving the client's objectives.

Effective collaboration requires a representation plan and budget that can be periodically updated. Budgets force outside counsel and corporate counsel to focus on the work that needs to be done and the most cost-effective ways to do it. In addition, a budget decreases the temptation to make ad hoc decisions.

In the face of uncertainty about client expectations, it is natural for outside counsel to try to preserve some room to maneuver. Some might call this prudent management of client expectations; some might call it something worse. Either way, corporate counsel can help the budgeting process by communicating client expectations about the budget amount they believe to be necessary or justified for a particular matter. With a clearer understanding of client budget expectations and more explicit decisions as to what work is needed or not needed, outside counsel can do a better job of ruling out less-essential work to determine whether the client's budget can be achieved without compromising professional standards.

To prevent misunderstandings and promote confidence, outside counsel (especially large law firms) should ensure that billing statements are reviewed for value and accuracy by the lawyers performing the bulk of the representation. This may seem obvious, but in practice this is a major and not infrequent problem. In the end, the issue boils down to trust. Because money is at stake, billing mistakes undermine effective collaboration by eroding the confidence of both corporate counsel and the client in outside counsel. Trust is lost. The relationship is damaged.
Because trust is at stake, it is absolutely critical that outside counsel wisely guard against inaccurate or low-value billing.

3. Balance strengths of corporate and outside counsel
Corporate and outside counsel have complementary core competencies. In a recent exhaustive study,2 the General Counsel Roundtable identified the following core competencies:

Corporate Counsel Core Competencies
•  Company and industry knowledge
•  Familiarity with individual business clients
•  Relatively low-cost provider
•  Interests aligned with company's interests
•  Convenient access to documents and parties
•  Business perspective, skills, and judgment
•  Multidisciplinary experience 

Outside Counsel Core Competencies
•  Breadth of experience
•  Staffing capability and flexibility
•  Independent perspective
•  Expertise in discrete area
•  Ability to spread costs of infrastructure
•  Number of professional contacts
•  Broad geographical representation

The challenge is merging and maximizing these core competencies effectively and efficiently. This cannot be done without effective communication. It cannot be done without leadership. And it cannot be done without individuals who, depending upon the situation, can transition easily from a leadership role to a support role.

The Role of Leadership in Effective Partnerships
Successful partnering between corporate and outside counsel takes an understanding of common goals and objectives. It also requires a captain at the helm of the ship. Far too often, cases and transactions become weighted down by the volume of minutiae and the momentum of the process or, in the case of litigation, case schedules.
There are numerous serious and costly problems with a captain-less ship. A litigation matter, for instance, can easily be driven by a mindless court schedule generated by a clerk's office, or lawyers simply noting depositions and taking other discovery without careful thought as to the client's real goals. The schedule and discovery may, or may not, have any meaningful relationship to the dispute. It might, for example, call for 16 months of discovery in a case where little or no discovery is needed. Or it might not call for mediation for 12 months into a case where mediation should occur immediately.

Part of the problem is that the legal system is essentially designed for brain surgery. If a patient comes in with a simple mole that needs to be removed, the system still pulls out all the tools for major brain surgery. That is, it does so in the absence of leadership.

The result? Without clear leadership from either corporate or outside counsel, the partnership between corporate and outside counsel envisioned above simply breaks down and the legal matter ambles along on its own, costly, accord. Another result is an amorphous relationship that does not serve the need of the company — the ultimate client — to meet its business objectives. Yet another result is a colossal waste of time and money.

Over the last 25 years, the legal process has become increasingly costly. Along with that increase in costs, the role of outside counsel has morphed from providing purely legal advice and analysis to working as a partner in ensuring a thriving business. It is absolutely critical that outside counsel recognize the role as one mandating not only standard lawyering skills (expertise, analysis, and judgment) but also meaningful leadership ability that translates into good direction, initiative, and vision.

To quote a popular maxim, counsel today must lead, follow, or get out of the way.

Leadership
Enormous work has been done on leadership in the for-profit and nonprofit fields, and many people reading this article will have read a number of popular leadership bestsellers — books like the terrific Built to Last and Good to Great, the inspiring Leadership Jazz, and Geeks and Geezers.3 Leadership forums have developed, especially in the nonprofit sector. Willow Creek's annual "Summit" draws thousands of leaders from around the world, now with satellite conferences in many major cities around the United States.

Both for-profit and nonprofit corporations place a high premium on high-level and day-to-day leadership. This is reflected in the salaries (some might argue absurdly high salaries) paid to some corporate CEOs.
The same is not true, however, of the legal profession. When one thinks of leadership and lawyers, one tends to think of the bar association, or committee or positional leadership work within a firm or corporation. "Lawyer Jones chairs a judicial review committee." Or "my colleague Smith chairs a group of estate planning lawyers at a national firm."
These leadership roles may have little or nothing to do with the type of leadership that is required to ensure effective collaboration between corporate counsel and outside counsel — or the effective working of a case, for that matter. Lawyers, generally, simply have not placed much value on leadership within cases or on corporate law projects. Instead, we talk about analytical ability, judgment, and experience.

Traditionally, law schools have paid even less attention to leadership, while business schools have keyed in on the subject for years. Now with increasing intensity, law schools remain focused largely on the traditional nuts and bolts of lawyering and the skills required for the practice of law. Law students are rewarded for analytical and writing ability, and rightly so. Yet in the day-to-day practice of law, leadership is absolutely vital.

The premise of this article is that these traditional lawyering qualities, while they form what you might think of as an essential baseline, are not adequate and do not substitute for effective leadership.
Effective leadership is especially important in complex or multiparty cases. If four, five, or more parties, each with separate counsel, do not have the benefit of some overarching leadership, it is almost certain that the legal work will suffer and/or be considerably more expensive than necessary. Lawyers and clients will bicker. Egos will arise and vie for center stage. Work will be duplicated, without much effectiveness. Judges will read duplicative pleadings because the lawyers are not working together in a coordinated fashion. It happens all the time.
The leadership vacuum, we think, is often compounded in litigation. This is because the vast majority of judges are not natural leaders. Some judges, particularly federal court judges, have adopted supra-rule practices to help control their cases. Some have even adopted orders controlling cases. These orders require structure and impose obligations on lawyers beyond those contained in the rules. But if a judge offers no leadership in managing the case, the role falls to the lawyers — should the lawyers fail to lead, the case will be governed by the run-of-the-mill case schedule.

So what does leadership look like in this lawyer/leader context?
One might trigger a large variety of answers in attempting to define the qualities that are inherent in leadership. Raymond Cattell, a pioneer in the field of personality assessment, developed the "Leadership Potential Equation." His work is not tailored to the legal profession but offers interesting insight nonetheless. He found that traits of an effective leader include the following:4

• Emotional stability. Good leaders must be able to tolerate frustration and stress. Overall, they must be well adjusted and have the psychological maturity to deal with anything they are required to face.

• Dominance. Leaders are often competitive and decisive, and usually enjoy overcoming obstacles. Overall, they are assertive in their thinking style as well as their attitude in dealing with others.

• Enthusiasm. Leaders are usually seen as active, expressive, and energetic. They are often very optimistic and open to change. Overall, they are generally quick and alert, and tend to be uninhibited.

• Conscientiousness. Leaders are often dominated by a sense of duty and tend to be very exacting in character. They usually have a very high standard of excellence and an inward desire to do their best. They also have a need for order and tend to be very self-disciplined.

• Social boldness. Leaders tend to be spontaneous risk-takers. They are usually socially aggressive and generally thick-skinned. Overall, they are responsive to others and tend to be high in emotional stamina.

• Tough-mindedness. Good leaders are practical, logical, and to-the-point. They tend to be low in sentimental attachments and comfortable with criticism. They are usually insensitive to hardship and, overall, very poised.

• Self-assurance. Self-confidence and resiliency are common traits among leaders. Leaders tend to be free of guilt and have little or no need for approval. They are generally secure and free from guilt, and are usually unaffected by prior mistakes or failures.

• Compulsiveness. Leaders were found to be controlled and very precise in their social interactions. Overall, they were very protective of their integrity and reputation, and consequently tended to be socially aware and careful, abundant in foresight, and very careful when making decisions or determining specific actions.

Outside of basic leadership traits, successful leaders must also possess personality traits that allow them to envision the future and convince others that their vision is worth following. These personality traits include:5

• High energy. Long hours and some travel are usually a prerequisite for leadership positions, especially as your company grows. Remaining alert and staying focused are two of the greatest obstacles you will have to face as a leader.

• Intuitiveness. Rapid changes in the world today combined with information overload result in an inability to "know" everything. In other words, knowledge, reasoning, and logic will not get you through all situations. In fact, more and more leaders are learning the value of using their intuition and trusting their "gut" when making decisions.

• Maturity. To be a good leader, personal power and recognition must be secondary to the development of your employees. In other words, maturity is based on recognizing that more can be accomplished by empowering others than by ruling others.

• Team orientation. Business leaders today put a strong emphasis on teamwork. Instead of promoting an adult/child relationship with their employees, leaders create an adult/adult relationship, which fosters team cohesiveness.

• Empathy. Being able to "put yourself in the other person's shoes" is a key trait of leaders today. Without empathy, you can't build trust. And without trust, you will never be able to get the best effort from your employees.

• Charisma. People usually perceive leaders as larger than life. Charisma plays a large part in this perception. Leaders who have charisma are able to arouse strong emotions in their employees by defining a vision that unites and captivates them. Using this vision, leaders motivate employees to reach toward a future goal by tying the goal to substantial personal rewards and values.

In the end, this listing of qualities, while perhaps instructive, is one of dozens of attempts to define in words what people know to be true: some people are natural leaders. They know how to get from A to Z — and others will follow them along the way. It is, to be sure, far beyond our competence or ability to attempt to define leadership in so many words. We believe, however, that leadership is a gift of sorts. It can be developed. But some people have this gift and others simply do not.

Leadership as the cornerstone to successful lawyering

For corporate counsel
Leadership principles should generally inform your attitude and translate into a number of behaviors when interacting with outside counsel, an opposing party in a transaction or litigation, or the court:

•  Hire a leader. It will make your life easier.

•  Define the objective of the representation early, clearly, and repeatedly. If you've hired the right leader, he or she should be able to get you there.

•  Provide meaningful guidance from beginning to end. Too often, corporate counsel simply hire outside counsel and thereafter provide little meaningful guidance. One simply must engage on a substantive level if the representation is to be effective.

•  Facilitate an exchange of information. Outside counsel, in litigation or in the course of a transaction, will generally not have the knowledge of the company required to obtain critical information. You must assist in this process.

•  Make informed judgments and then stand with outside counsel. A leader does not stand back and point the finger when things go south. That is not leadership; it is weakness. Judgments should be made together, with full knowledge of risks. Thereafter, corporate and outside counsel should work together through good or bad. If problems arise (and they will), leaders fix the problem; they do not affix the blame.

•  Get involved. With few exceptions, corporate counsel should be providing meaningful guidance on transactional documents, briefs, mediation submission, and strategy, and at trial.

For outside counsel
To be effective, outside counsel must provide leadership to the client, colleagues, co-counsel, opposing counsel, and the court. As with corporate counsel, this requires a constructive attitude and a number of behaviors:

•  Keep the client's business objective in mind. This is particularly true when a "team" of lawyers is at work. Lead counsel must keep the big picture — from the client's perspective — in mind at all times.

•  Remember, relationships matter. As a leader, your relationships with colleagues, co-counsel, court staff, in-house staff, and opposing counsel are absolutely critical. You must pay attention to relationships. Many cases and legal projects are thrown off course because relationships are not sufficiently valued. Some fine, highly skilled lawyers create additional expense and difficulty for their clients by not paying attention to this rule.

•  Don't surprise the client. Your client should know what you are doing, what you are not doing, and why. Clients deserve regular weekly updates showing work accomplished, work to be performed, and results obtained.

•  Communicate, communicate, communicate. Your client deserves to know what is happening on any case, even a small one. Communication should be characterized by openness and trust. If communication breaks down, trust will break down.

•  Provide initial and updated budgets. Clients also deserve to know what you think a project will cost. And they deserve to know what it actually costs.

Practical Tips and Simple Tools for Effective Leadership
The following are tips for building a better relationship between corporate and outside counsel:

• Ask outside counsel to lead. Simply make it clear from the beginning of the representation that you expect more than good thinking and writing. You expect results, and you expect leadership to get those results. Make it clear that outside counsel's role is a global role, not a technician's role.

• Educate outside counsel. At the beginning of each new representation, corporate counsel should provide outside counsel with a briefing on client objectives, client personnel, decision-making, control structure, and client expectations on the frequency and detail of communications and decisions.

• Representation plan. Outside counsel should develop a representation plan early in the engagement for the client's review and approval. The plan should be regularly updated and used as a tool for measuring performance and managing costs. A representation plan can add value by identifying those areas where corporate counsel and clients can efficiently provide information and those areas where outside counsel should concentrate their efforts. The plan should include a shared strategy to obtain the desired results.

• Status reports. Outside counsel should provide weekly or monthly status reports, highlighting new developments and tasks so that corporate counsel is continually, and automatically, kept up-to-date in real time. Reports should be sent electronically and should highlight any new or critical information. The sample report is designed to be read in 30-60 seconds.

• Budget to actual comparisons. As outside counsel, provide at least quarterly budget reports to actual comparisons for each matter, showing a cumulative total. Include new matters not budgeted for at the outset.

• Hold periodic team meetings. Client representatives should be included in periodic team meetings. These meetings serve to redefine the goals of the representation, identify risks and challenges, and discuss strategy. These are especially important in multiparty or multilawyer cases.

• Keep the team informed. Too often, lawyers communicate selectively. While this is sometimes appropriate, it is imperative to avoid triangulation. E-mails should be copied to all concerned, not to selected favorites. Controversial strategic and briefing decisions should be disclosed and discussed, not hidden or popped as a surprise.

• Be responsive. Promptly return telephone calls and respond to correspondence. If co-counsel called, assume it was important; if you return a call that you do not find important, consider it an opportunity to clarify expectations and reduce the risk of future misunderstandings as to what is and is not important in the representation and the co-counsel relationship.

• Communicate more, not less. When in doubt, ask or confirm. Speak plainly if there are perceived problems or disagreements, and develop a skin thick enough to hear and consider plain speech from co-counsel without harboring hurt feelings or injured pride. It is natural to want to avoid difficulties, but solutions require more intensive communication — not less.

Conclusion
Effective collaboration between corporate counsel and outside counsel adds value, reduces costs, and substantially improves the odds that the client will obtain high-quality legal representation at a reasonable cost. Leadership in lawyering and the ability to transition easily between a leadership role and a supporting role as the situation requires are essential components to an effective, collaborative relationship.

______________________________

Greg Tolbert is senior legal counsel for Weyerhaeuser Company in Federal Way, and is a graduate of William and Mary College of Law. David Goodnight is a partner at Stoel Rives LLP in Seattle, and is a graduate of Valparaiso University and Yale Law School. Vanessa Power is an associate at Stoel Rives LLP and is a graduate of the University of Washington School of Law and the Daniel J. Evans School of Public Affairs. The authors cochaired a WSBA CLE in Seattle on May 13 entitled "Effective Collaboration: Keys to Success for Corporate In-house and Outside Counsel."

NOTES
1 See "Ask the Practical Questions; the Three Bs of Partnering," Corporate Legal Times (Sept. 1999), at 1.2.
2 See General Counsel Roundtable, Outside Counsel Management: Beyond the Cost-Quality Trade-Off, at 96 (2001).
3 Built to Last: Successful Habits of Visionary Companies, by James C. Collins and Jerry I. Porras; Good to Great: Why Some Companies Make the Leap  . . .  and Others Don't, by James C. Collins; Leadership Jazz, by Max Depree; Geeks and Geezers, by Warren G. Bennis and Robert J. Thomas.
4 See Raymond B. Cattell, The Scientific Analysis of Personality (1965), chap. 4.
5 See United States Small Business Administration, "Leadership Traits," at www.sba.gov/managing/leadership/traits.html (Feb. 20, 2004).

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