When to Go Outside

One of the biggest challenges I faced early on in my current role is when to decide to seek outside counsel. When it came to litigation, it was an easy decision for me to retain outside counsel. I have limited litigation experience and my interaction with outside counsel on matters that have proceeded to litigation has been positive. Usually, the outside counsel I have retained are able to quickly wrap up the matter with minimal financial impact.

This post, however, is about when to retain outside counsel for a specialized issue. This is something I grappled with early on as my knowledge was more centralized to a few key areas of the business. When an issue would pop up that went beyond my expertise, I had a dilemma. Do I try to research the issue and develop my own analysis, which wastes time and energy? Or do I engage with outside counsel and tap into the small legal budget to get a concrete answer? The overarching question that always hung over my head when trying to decide between these two options was: how am I going to explain to the executive team that I do not have an answer for the issue presented and explain the added expense of outside counsel?

While I have not mastered the ability to quickly discern whether a novel issue is worth seeking an outside opinion or not, I have discovered a few signals I look for to decide. First, I try to ascertain the worst-case scenario if the issue presented resulted in the worst possible outcome. Is it a substantial monetary impact, reputational impact for the business, or operational impact? If it is something that will have a substantial impact on the business, I dig a little deeper. If not, I usually try to research the issue on my own to avoid spending money on outside counsel. Next, I gauge how much time the issue will take for me to become knowledgeable on the topic area. If it is something that I can piece together prior experiences to solve, I know I can spend the time to figure it out. On the flip side, if I have no foundational knowledge on the subject matter and it is a high impact issue, I will send it to outside counsel for a specialized opinion.

What the above thought process has taught me is that there are areas of the law that I will never feel fully confident in and that is where a good outside counsel can fill in. I think the worst trait an in-house attorney can have is overconfidence and there is a very fine line between tackling new topics with gusto and being overconfident. Once you start veering toward overconfidence, you start exposing the business to avoidable risks. I think a challenge for in-house counsel is recognizing the limits of their knowledge and understanding that although it does cost the business money, it is ultimately good business to defer to outside counsel on specialized issues. In-house counsel's ability to recognize that fact is crucial for the role.