Great Expectations: What Design Firms Expect from Outside Counsel
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1 Schinnerer s 54 th Annual Meeting of Invited Attorneys 1 Great Expectations: What Design Firms Expect from Outside Counsel by Alison R. Mullins, Esquire Expectation management is the key to all successful relationships. The relationship between design firms and their outside counsel is no different, especially if there is a dispute or claim involved. Attorneys need to know and understand the expectations of their clients so that they can better meet and serve their needs. So what do design firms expect from their outside counsel? In conversations with the in-house counsel from several national architectural and engineering firms, several questions, issues, and concerns were posed to explore the expectations and needs of design firms of their outside counsel. This paper aims to provide insight on what these design firms had to say. The Client One thing is for sure: design fi rms unanimously agree that outside counsel must understand that the design fi rm is outside counsel s client; not the design fi rm s individual employees or the design fi rm s insurance company the design fi rm. There should be no gray area on this point. The design fi rm is also the client for in-house counsel. While in-house counsel may report to a board of directors, operational president, chief executive offi cer, corporate shareholders, or another executive or executive committee, in-house counsel s ultimate client is the design fi rm. Therefore, in-house counsel must keep the design fi rm s priorities in line with outside counsel, protect the interests of the design fi rm, and focus on what is in the best interest of the design fi rm. Client Communications Outside counsel typically begins communication with the design fi rm through its in-house counsel or executives. Throughout the course of representation, the design fi rm s in-house counsel or executives remain outside counsel s primary point of contact. In large part, this is true for the same reason that corporate representatives are named in construction contracts so there is someone with authority to make decisions on behalf of the company. Once a relationship has been established and a good rapport is in place between inhouse counsel and outside counsel, outside counsel will often engage in direct access with fi rm members who may be important to the defense of a pre-claim or claim. It is important Alison R. Mullins, an associate at Rees Broome, PC, focuses her practice on all aspects of commercial dispute resolution. In particular, she often represents architects, engineers, and others involved in the construction industry. Before entering the private practice of law, Alison started her legal career as a contracts manager and in-house counsel at a large architectural fi rm in Northern Virginia. She is admitted to practice in Virginia, Maryland, and the District of Columbia, including the corresponding federal courts and the Supreme Court of the United States. Alison has mediated, arbitrated, and tried cases to judges and juries during the course of her eight years of practice. Alison is an author/coauthor of numerous articles in industry periodicals, as well as a frequent presenter on construction industry and related topics. She received a Bachelor in Science from Southern Connecticut State University and her Juris Doctor from Roger Williams University School of Law. Copyright 2015 by Victor O. Schinnerer & Company, Inc.
2 2 that the design fi rm s primary contact facilitate the introduction between fi rm members and outside counsel as it tends to foster a more open, honest, and relaxed line of communication. In-house counsel, or the design fi rm s primary point of contact, may also want to run interference between employees of the design fi rm and outside counsel. Direct access with fi rm members who are involved in the facts underlying a pre-claim or claim is often benefi cial for effi ciency and effectiveness; however, it is always important to keep outside counsel s primary design fi rm contact in the loop regarding status of the pre-claim or claim. Frequency During the pendency of pre-claim or claims assistance, the design fi rm s in-house counsel or executives that serve as outside counsel s primary contact should be given monthly status updates at a bare minimum. If the claim is more active, communications should be more frequent. At times, there will be multiple communications in a day. It is always better to provide the design fi rm with more information about the status of a claim than less. This is especially true since outside counsel s primary contact for the design fi rm reports internally to other fi rm management on a regular basis with claim status updates. It is important for outside counsel to know and understand the design fi rm s communication needs. Some design fi rms are more active, expecting to be promptly copied on all communications received or sent on the matter by outside counsel. On the other hand, other design fi rms are less active and opt for a less-is-more approach to communications. Under a less-is-more communication approach, the design fi rm favors not being copied on or forwarded a copy of every communication received or sent on the matter by outside counsel. This does not mean communication is unimportant. In contrast, it means every communication between outside counsel and the design fi rm is important. Regarding draft pleadings, the vast majority of design fi rms prefer to see draft documents two to three days before a pleading is required to be fi led with the court and opposing counsel. This lead time affords the design fi rm an opportunity for thoughtful review, comment, and edits or rewrites. Time for review and comment is especially important when a pleading or fi ling is factually dense. Method Communicating with a design fi rm via its preferred method is also important. A survey of design fi rms revealed the favored method of communication is . First, the information and recommendations in an tend to be more thoughtfully prepared than what is provided during a telephone conversation. In the long run, this saves everyone time. Second, if outside counsel s primary contact for the design fi rm is traveling or otherwise unable to take a call, the will be available when the contact has an opportunity to review and analyze it even after normal working hours. s should be supplemented with timely telephone discussions and, occasionally, faceto-face meetings or video conferences. Further, any periodic written status reports or memoranda prepared for the design fi rm s insurance claim representative or insurance company should be provided to the design fi rm. Transparency between the design fi rm s in-house counsel and primary point of contact, outside counsel, and the insurance company is important. Great Expectations: What Design Firms Expect from Outside Counsel
3 PROCEEDINGS OF THE 54 th ANNUAL MEETING OF INVITED ATTORNEYS 3 Outside Counsel s Knowledge of the Design Firm s Business Outside counsel s understanding of the design fi rm s professional services and business practices is critical to the effi ciency and success of outside counsel s support of the design fi rm. Design fi rms expect that their outside counsel will take the time to get to know and understand the professional services that the fi rm provides and performs for its clients, especially the services that are involved in the particular dispute, claim, or litigation. Without this knowledge, it can become challenging for outside counsel to truly understand the nature of the complaint or dispute that the design fi rm is trying to resolve, settle, or litigate. Moreover, without this knowledge it can become diffi cult for outside counsel to be truly empathetic to the issues involved in the dispute or claim from the perspective of the project manager, designer, or engineer. The more familiar with the professional practice area outside counsel is, the more trust is established and the more comfortable the design fi rm s project manager, designer, or engineer will be to talk to and be open with outside counsel. Design professional services are typically only a small portion of every construction project. Unfortunately, many of the design fi rm s clients view some of the services more as a commodity. At times, the insured s clients fail to understand the professional judgment that necessarily goes in to the decisions and recommendations that the design fi rm s professionals make on a daily basis. As a result, professionals in the design industry are often expected to provide services, or a portion of their services, quickly, on short notice, cheaply, and sometimes with little defi nition. Having outside counsel understand what the design fi rm does and doesn t do is vital to effectively presenting a legal defense. In addition, a design fi rm or design fi rm s in-house counsel commonly use local outside counsel as a colleague and sounding board to quickly confi rm the design fi rm s understanding of specifi c legal concepts, test proposed contract language adjustments, and assess the reasonableness of a proposed response to a practice issue needing attention. Again, under these circumstances, it is critical that outside counsel have a basic knowledge of the design fi rm s business. Further, it is important for outside counsel to understand not just the services provided by the design fi rm, but also the fi nancial aspects of the design fi rm s business. Outside counsel should gain an appreciation for the design fi rm s company culture and goals, relationships with its clients, process by which its business decisions are made, invoicing practices, contracting methods, and ability (or lack thereof) to tolerate risk. The design fi rm s approach to handling a claim can vary widely depending on the health, and importance of maintaining that health, of a client relationship. Design fi rms fi rmly believe that business success stems from solid relationships with their clients, vendors, and subconsultants. Suggestions for the best way for outside counsel to gain all of this knowledge include: take the time to get to know the key players within the design fi rm s senior management; conduct a detailed review of the internal documents that are subject to the claim; and follow-up as may be needed with a sit down, face-to-face meeting with the project manager, designer, or engineer involved as part of the initial engagement process or investigation phase. This is best accomplished when coordinated with and through in-house counsel or outside counsel s primary contact for the design fi rm. Outside counsel obtaining this knowledge about a design fi rm s business will aid in fostering a long-term relationship with the design fi rm.
4 4 Pre-Claims Management The operative words to describe the overall goal of the design fi rm and outside counsel relationship are partnership and dialogue. The design fi rm and its in-house counsel should be proactive in the exploring, planning, and implementation of the strategy for claims heading to litigation. No one knows the design fi rm s business better than they do. From the identifi cation of witnesses and the preservation of evidence to noticing the claim and investigating the facts, in-house counsel or the outside counsel s primary contact for the design fi rm can save time and money for everyone by identifying the proper resources and, if warranted, cutting through internal red tape. Other pre-claim tasks that the design fi rm should be, and routinely are, involved in include: early and prompt pre-claim notifi cation to the insurance carrier and the appropriate claims representative as part of the pre-claim loss prevention program, which is very effective; sorting out any potential coverage issues that the design fi rm may run into (oftentimes, there can be an interesting interplay between the professional liability policy and the commercial general liability policy, which are best resolved if known up front); determining when to retain outside counsel; and putting together an overall strategy to avoid litigation and keep relationships intact. Claims and Litigation Management Again, the operative words for claims and litigation management between the design fi rm and outside counsel are partnership and dialogue. The design fi rm s outside counsel characteristically have signifi cant litigation experience and the design fi rm relies on that experience to identify, analyze, and explain alternative potential claim litigation strategies. One specifi c example of a strategic area outside counsel assists the design fi rm with is the coordination of consultants and making strategic decisions regarding issues involving the design fi rm with consultants. This analysis includes whether the design fi rm should provide notice of the claim to its consultant and if the design fi rm and its consultant can work together to resolve the claim. Not to mention, many design professionals have offi ces and business operations in multiple states (and for some fi rms, a handful of countries). This requires that the design fi rm rely on outside counsel s knowledge of applicable state laws and local practices in making a decision on how to handle a claim that may be headed to litigation. Discovery Generally, design fi rms view management of discovery during the litigation process as a shared responsibility. Managing the timing of discovery, addressing legal issues, and fi nal preparation of objections, responses, and motions is viewed as the responsibility of outside counsel. Gathering the facts and details from the design fi rm s employees, and identifying and providing the witnesses, factual responses, and documents are frequently viewed as the responsibility of the design fi rm. Therefore, the discovery phase is a hybrid process that ensures discovery is conducted in a prudent and effi cient manner. Great Expectations: What Design Firms Expect from Outside Counsel
5 PROCEEDINGS OF THE 54 th ANNUAL MEETING OF INVITED ATTORNEYS 5 Motions Practice When it comes to management of motions practice, outside counsel is expected to take the lead and primary responsibility. Of course, this includes the fi nal product submitted to the court. The design fi rm s in-house counsel or management play more of a behind-the-scenes strategic role in assessing desired objectives and potential risks, but always rely on outside counsel to discuss the practical implications of available options under applicable law. Trial Strategy Outside counsel maintains primary responsibility for managing the trial strategy during the litigation process in a prudent and effi cient manner. Outside counsel has litigation experience; the design fi rm does not. When it comes to trial strategy, the design fi rm, its in-house counsel (if applicable), and its executive management should remain part of the decision making, but deference should be given the majority of the time to outside counsel s knowledgeable advice on trial strategy. Alternative Dispute Resolution Alternative dispute resolution should be, and usually is, considered early and often in preclaims and claims handling. Often, the design fi rm is considering resolution options even before outside counsel is involved. Accordingly, outside counsel should be mindful of possible resolution options as early as possible and assist the design fi rm with strategizing on positioning for early resolution. Unlike the impression portrayed in the media, businesses are more interested in keeping client relationships than making legal precedent. Sometimes, options for resolution will not become available until later in the case. Therefore, it is imperative that both the design fi rm and outside counsel continuously consider alternative dispute resolution options throughout a claim or litigation, and at all strategic or milestone opportunities for example, pre-claim, during discovery, before and after motions for summary judgment, and leading all the way up to the courthouse steps. What Are the Top Three Qualities Design Firms and the Design Firm s In-house Counsel Look for in Outside Counsel? When presented with the question, the design fi rms responses were not limited to three, but did boil down to the following six categories: 1. Knowledge of the law, both substantive and procedural, experience, judgment, and effectiveness in the practice of design and construction law; 2. Responsiveness to the design fi rm, the insurance company s claim representative, and opposing counsel; 3. Budgeting ability and value of the services provided; 4. Balance of perspective a skilled litigator with an understanding of maintenance of relationships and not a litigate at all cost, scorched earth mentality; 5. Willingness and desire to work at forming a participatory and learning focused team with the design fi rm to better enable the provision of quality legal services to the design fi rm on a long-term basis; and 6. A cordial and professional personality.
6 6 Conclusion Great Expectations Overall, the design fi rm rightfully has great expectations for outside counsel s services. As laid out above, meeting the design fi rm s expectations is achievable. Expectation management is the key to all successful relationships. If a design fi rm clearly outlines its expectations, and outside counsel acknowledges and strives to meet those expectations, both short-term and long-term success can be achieved in pre-claims and claims handling. Great Expectations: What Design Firms Expect from Outside Counsel
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