The hidden manager

A senior private equity executive was complaining about an expensive legal engagement that got even more complex and expensive just as he thought it was wrapping up. His reaction? “I guess this is just the way it is.”

There are at least three take-aways from his story. First, he knew he didn’t have the expertise to challenge the legal judgment of his counsel so he didn’t. Second, the late addition to scope was perfectly predictable at the beginning of the engagement. And third, he acquiesced to the fee increase.

While the details may change, this anecdote is representative of the experience of many clients. High and uncertain fees and scope creep, among other problems, appear as an accepted part of the legal services landscape.

While that may be true, it is not inevitable. The solution lies in understanding the mechanism of how an engagement is run and by whom.

Every engagement originates with a point of contact within the firm. This person is often referred to as the “originating” or “relationship” partner. That lawyer is tasked with managing all elements of the engagement. He defines the scope of the engagement (what legal work is required), negotiates the fee, decides which lawyers within his firm will do the work, and performs quality control. Each of those decisions, individually and collectively, will determine the timing, cost, and quality of the work product.

In effect, the firm doing the work is serving as its own manager.