[insert company name] Outside Counsel Guidelines	=
Overview	=
After incorporating sample contributions from many companies across multiple industries, CLOC is proud to author and publish a common set of Outside Counsel Guidelines. These sample guidelines are provided as a tool to assist CLOC members interested in creating a set of terms to use in retaining outside counsel. We encourage CLOC members to customize these sample guidelines to fit the needs of your organization and usage of outside counsel. We hope this guide saves you time by providing a solid starting point because as we say at CLOC, “Never start with a blank page.”	=
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I. Introduction 1	=
II. Billing and Invoice Submission 1	=
III. Budgeting, Forecasts and Accruals 4	=
IV. Staffing 5	=
V. Appendix 7	=
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I. Introduction	=
Outside counsel agrees to represent [insert company name] according to these Outside Counsel Guidelines (“Guidelines”) and the Master Services Engagement Letter (“Engagement Letter”). These Guidelines will become effective as of [Date] and will replace all guidelines and agreements previously entered into between you and [insert company name]. Submission of invoices by outside counsel is deemed outside counsel’s acceptance to these Guidelines. [insert company name] reserves the right to modify these Guidelines at any time and will provide outside counsel advanced, written notice prior to any modification taking place. [insert company name] will not pay for fees or expenses billed in violation of these Guidelines.	=
Outside counsel may only be retained by an authorized representative of the [insert company name] legal department. [insert company name] will assign a supervising attorney to each matter (“Legal Contact”). Unless otherwise agreed to by the Legal Contact, all communication between outside counsel and [insert company name] personnel should be made through the designated Legal Contact.	=
II. Billing and Invoice Submission	=
A. Invoicing and Late Penalties	=
It is outside counsel’s responsibility to submit accurate electronic invoices in [insert company name] electronic billing system on a monthly basis, to include all required documentation, and to correct invoicing errors for re-submission. All invoices submitted to [insert company name] must contain required pieces of information and be submitted in the proper format. A separate invoice is required for each matter and for each [calendar or fiscal] month, unless we expressly direct you otherwise.	=
[insert company name]’s law department utilizes [Insert software platform name] software to streamline the process for receiving legal invoices from all outside legal service providers.	=
Outside counsel must submit all invoices for work performed in a month by no later than the last day of the [insert calendar, fiscal] month after the month in which the work is performed (the “Due Date”). Invoices will generally be paid within [insert number] days from receipt of a properly submitted and accepted invoice. [insert company name] will discount every invoice by [5%] per month if received after the Due Date (except in the case where the invoice is for less than $500 in which case you may hold the invoice until aggregate billing exceeds $500).	=
[Insert company name] has no obligation to pay for any invoices submitted more than four months after the completion date of a matter, or for any late invoices that cross [Insert company name] fiscal year.	=
To ensure that any discounts are reflected in your invoices, we require you to enter your bill using the pre-discounted bill rates and reflect the discount as a top-level adjustment on your invoice and in our e-billing system.	=
Unless required by law, all invoices must be submitted electronically.	=
B. Line Item Details and Block Billing	=
We believe that block billing does not provide adequate detail to assess the work that was done and therefore require that timekeepers not block bill their time. We define block billing as when multiple (and different) tasks are aggregated into a single line item. Time spent on tasks should be billed for actual time spent. Timekeepers must accurately record time spent on each task. Unless otherwise authorized by us in advance, each entry should reflect a separate task and must state the nature of the work performed and the time spent by each timekeeper.	=
Because this practice limits [insert company name]’s ability to effectively monitor our legal spending, line items that are block billed will either be reduced by [50%] automatically or rejected.	=
C. Fees and Expenses	=
i. Alternative Fee Arrangements	=
[insert company name] believes in innovation. It is one of our core values and is a trait we not only expect from ourselves, but from our vendors and partners. We believe that pushing past traditional methods of billing based on an hourly rate and instead working towards alternative fee arrangements (AFAs) will lead to a longer, more engaged and predictable relationship with outside counsel. AFAs give outside counsel greater flexibility and reduce the administrative burdens for both [insert company name] and outside counsel. [insert company name] values AFAs because they focus on efficiency, effectiveness, while still giving outside counsel the ability to demonstrate its expertise and commitment to [insert company name]’s business.	=
For every matter, [insert company name] requires that outside counsel provide a fixed fee or other alternative billing proposal, as the primary method for billing against a matter. So please, be innovative. Some possible AFAs that [XXX] desires you to consider, depending on the matter, are flat or capped fees, blended rates, contingency fees, phased fees or success fees. We look forward to your proposals.	=
ii. Hourly Fee Arrangements	=
If it is not possible to put in place an AFA and you are resorting to hourly rates, [insert company name] expects to be charged the lowest hourly billing rates provided by the law firm to its most valued clients. Hourly rates are locked for 2 years and [insert company name] will not approve any increases to the hourly rates unless agreed upon in writing by the Legal Operations team in advance of time being billed.	=
Volume Discount	=
[insert company name] expects outside counsel to provide a volume discount based on [insert company name] total spend. The discount should be reflected on all bills and entered into [insert company name]’s e-billing solution in such a matter that [XXX] may track the discount.	=
iii. Prohibited Fees and Expenses	=
If we agreed to an hourly rate arrangement, [insert company name] will reject costs and expenses pertaining to any of the fees and expenses listed below. [insert company name] will only pay for actual costs and will never pay for markups.	=
● Administrative, clerical, and secretarial staff work; word processing, proofreading, and any other non-professional services or service providers such as administrators and document clerks	=
● Time spent “getting up to speed” for a legal professional due to staff turnover or vacation	=
● Time spent preparing invoices, discussing or resolving billing inquiries or disputes, utilizing the electronic invoice system, and budgeting tasks.	=
● Proofreading	=
● Professional development time	=
● Graphics and desktop publishing	=
● Time spent by attorneys performing paralegal work	=
● Routine administrative tasks incidental to an engagement	=
● Legal research (time spent or other costs); exceptions require prior approval	=
● Document translation that has not been requested or pre-approved	=
● File creation, organization, and maintenance (including file storage)	=
● Time spent or costs associated with preparing, transferring, closing, or destroying files, research, memoranda, pleadings, communications, records, drafts, and other related material, including electronic copies of documents (including to [XXX] or new counsel)	=
● Communication charges including phone, video, word processing, and fax.	=
● Postage and courier fees, unless pre-approved	=
● Publications, subscriptions, librarian services, and online databases, such as Lexis and Westlaw, whether cost or time	=
● Document scanning, unless pre-approved	=
● Copying (color or otherwise), whether cost or time	=
● Any items of overhead expenses (e.g. staff overtime, meals, local transportation, conference rooms, calendaring, rental fees, etc.)	=
● Unauthorized third-party fees	=
D. Travel Expense Policy	=
[insert company name] requires that all outside legal partners strictly adhere to its travel expense policy [insert link or attachment], which is available upon request.	=
Please note that the following requirements apply:	=
● Air Travel. All charges for air travel must be at economy or coach rates. We will not reimburse you or third-party vendors for business or first-class air travel. Airline reservations should be made as far in advance as possible to take advantage of early purchase discounts. Airfare for calendared court appearances, mediations, or other scheduled meetings, should be booked at least 14 days in advance. Failure to book air travel sufficiently in advance to take advantage of readily available lower fares may result in reduction of the reimbursement.	=
● Hotel. We will pay for hotels up to [$250] per night. Wherever possible, we expect you to use hotels where [insert company name] has an agreed rate, a list of which is available upon request.	=
● Meals. We will pay for meals up to [$60] per person per day.	=
● Ground Transportation. We will pay for rental cars up to [$50] per day. We will not pay for ground transportation by limousine unless the charges are equivalent to, or less than, taxi fares.	=
● Exceptions. In certain cities, exceptions to the reimbursable limits are allowable with prior written consent from Legal Operations.	=
● Miscellaneous. We will not pay for mini-bar charges, personal telephone calls, movie rentals, dry cleaning, or similar personal items.	=
● Receipts. Documentation is required for any single expenditure over [$25]. Actual receipts (or facsimiles thereof), e.g. the airline ticket stub showing class and fare, as opposed to an expense report or travel agent summary, must be provided. All travel receipts should be organized and submitted by timekeeper’s name in chronological order.	=
● Timekeeper Billing During Travel. We will pay only for time spent working on [insert company name] matters during travel with customary itemization of the actual work performed. We will not pay for non-working travel time.	=
III. Budgeting, Forecasts and Accruals	=
A. Budgets and Forecasts	=
Within 10 days of a new matter being opened in our billing system, outside counsel must submit a detailed budget projecting fees and costs. Thereafter, at least monthly when submitting accrual data (and more frequently should the matter have a material change in the interim), outside counsel must review each matter’s monthly budget projections and revise the budget if it recommends any adjustments (up or down). Although legal budget projections are often difficult to make with precision, [insert company name] always needs to know your current reasonable best estimate by month for at least a rolling 12-month forecast. All budgets must be reviewed and approved by the partner from outside counsel and the lead [insert company name] attorney responsible for each matter.	=
When updating budgets, please do not change the current month’s budget (such updates should be reported as accruals).	=
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B. Accruals	=
We require outside counsel to submit accruals in a timely manner on a monthly basis. Accruals are unnecessary for matters associated with AFAs. If you are late reporting accruals three or more times in a rolling six-month period, you will credit us back an amount that will start at $10,000 for the third infraction and will increase by $2,000 for each subsequent infraction	=
IV. Staffing	=
A. General.	=
[insert company name] regards staffing as one of the most critical components of the success and cost-effectiveness of a matter. We leverage analytics and other technologies to pinpoint misalignment with these Guidelines.	=
In general, [insert company name] requires outside legal partners to:	=
● Not bill for hours in excess of 8 hours per day, without pre-approval.	=
● Obtain the Lead [insert company name] Attorney's approval for staffing prior to commencing any engagement or making any changes in staffing once an engagement has begun.	=
● Should the assigned lead attorney for a matter give notice of his/her intent to leave your firm, we ask that you notify the [insert company name] Lead Attorney no later than two days after the lead attorney gives notice of his/her intent to leave.	=
● Leverage [insert company name] in-house legal and business resources whenever it is reasonable and cost-effective to do so.	=
● Leverage [insert company name]’s preferred alternative legal service partners whenever it is reasonable and cost-effective to do so, but always subject to these terms and Section B specifically.	=
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B. Expertise.	=
We expect you to work with the [insert company name] Lead Attorney in determining appropriate staffing (specifically team members and size) to manage our matters in a lean and efficient manner, staffing only as reasonably necessary, and permitting only core team members to attend meetings. Team members must have the appropriate level of experience and expertise, and first year associates may not be staffed to our matters without our prior written approval. We will not pay for staff members to learn substantive areas of law or to ramp up or familiarize themselves if they are replacing another staff member.	=
C. Diversity.	=
[insert company name] seeks to partner with those outside counsel that believe diversity in representation in all forms results in better outcomes. Creating an environment that emphasizes the professional and personal development of diverse attorneys and non-attorneys fosters a culture of inclusion, collaboration and stability.	=
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D. Engaging Third Party Services.	=
We do not authorize you to retain any vendor or third-party service provider (including consultants, expert witnesses or local counsel) or enter into any agreement with any vendor or third-party service provider without our prior, written approval. To request approval, you must provide the name of the vendor, the name and expertise/ credentials of individuals who will be providing the services as applicable, and a detailed budget (including rates, performance timelines and anticipated completion). We may elect to retain the vendor directly, or direct you to work with a [insert company name] preferred provider. We can provide you with a list of our preferred providers.	=
E. Performance Reviews	=
[insert company name] will conduct regular evaluations on the firm, individual attorneys and other staff. In addition to assessing the quality of service and compliance with [insert company name]’s guidelines, [insert company name] will consider accrual submissions, performance to budget, willingness to provide AFAs, staffing efficiency, rates, diversity of staff, and timely submission of invoices when we evaluate outside counsel for future use. Sharing performance information is critical to building and maintaining trusted relationships. If at any time you have concerns or desire feedback, please reach out to Legal Operations.	=
F. Ownership and Disposition of Documents	=
All work product created for or utilized in [insert company name] matters is owned solely by [insert company name] You will, when requested by [insert company name] promptly provide [insert company name] with copies of all legal pleadings, filings, memoranda, settlement agreements, communications, records, drafts, and other documents in electronic form at no cost to [insert company name] and in the form and manner requested. [insert company name] will not pay for the preparation of “enclosed please find” letters merely itemizing the requested attachments and you will not undertake to summarize or elaborate on the documents forwarded to [XXX] unless this is requested by [insert company name]’s Lead Attorney.	=
G. Media and Other Inquiries	=
Our outside counsel should never engage in public relation activities that identify [insert company name] as a client, or comment to the media, investors or others on [insert company name]-related matters, unless approved in writing in advance by [insert company name]. Additionally, you may not use any [insert company name] logos, trademarks, or service marks in your marketing materials without prior written approval, subject to any restrictions and policies [insert company name] may require in its sole discretion.	=
H. Litigation Matter Requirements	=
When working on litigation matters, please know that our litigation team may also impose additional policies and practices for litigation and eDiscovery matter management.	=
I. Patent Matter Requirements	=
When working on patent prosecution, please know that our patent team may also impose additional policies and practices for matter management.	=
V. Appendix	=
The following sections are optional for inclusion in Outside Counsel Guidelines.	=
A. Acceptable Currencies	=
[insert company name]’s various corporate entities can only pay in specific currencies. Appendix [Z] sets out the currencies [insert company name] will accept and remit payment. To ensure timely payment, outside counsel must confirm with [insert company name]’s Billing Coordinator before billing in non-authorized currencies. Any invoices submitted using non-authorized currencies will cause a delay in payment.	=
B. Rate Schedule	=
The following sections are optional for inclusion in Outside Counsel Guidelines.	=
C. Information Security Assessments	=
[insert company name] recognizes the critical importance of information security. Just as [insert company name] makes every effort to ensure the security of confidential information that our customers and partners share with us, we expect that outside counsel will implement adequate controls in order to secure the confidential information we entrust to our law firms for safekeeping.	=
As outside counsel is often privy to some of the most sensitive data of [XXX] and/or our customers, we reserve the right to assess the information security practices of outside counsel as we deem necessary. The [XXX] Information Technology department has developed the [insert company name] Information Security Review (“ISR”) Program to facilitate the assessments. The goal of the ISR Program is to identify existing or potential risks that could adversely affect [insert company name] its customers, and/or its business activities. The assessments evaluate outside counsel’s data and technology related controls. If and when control deficiencies are identified, outside counsel must commit to take corrective action to eliminate, or significantly reduce the associated risk. Periodic re-evaluation of outside counsel’s controls helps to assure that adequate security measures remain in place and are adjusted accordingly as the scope or nature of the information being shared evolves.	=
[Should be customized to meet your program] The following stages form our standard ”ISR” process:	=
● An analyst assesses the nature of the service offering, the associated inherent risk, and determines the type of information security review needed.	=
● A link to the information security questionnaire is sent via email to the contact(s) to complete and submit the review form via an online web page.	=
● The analyst reviews the questionnaire submission and generates a report of the findings and sends it to the Relationship Owner (”RO”).	=
● The RO, along with the assistance of the ISR analyst, schedules and conducts a meeting with the service provider to review their survey responses. Any identified information security issues, control deficiencies or areas of concern are discussed, as necessary, and risk ranked.	=
● A remedial plan for correcting any issues or control deficiencies is obtained from the service provider and reviewed for completeness. Timescales for remediation are set and agreed between the [insert company name] and the service provider.	=
● The service provider is monitored by the RO to ensure all issues are corrected according to the agreed plan.	=
● The service provider is subject to a periodic re-evaluation based on the inherent risk and nature of the services provided to [insert company name]	=
Additionally, outside counsel will maintain and enforce at any facilities where any outside counsel services are performed, other than [insert company name] facilities, safety and information security procedures that are at in line with ISR Program requirements. In addition, when onsite at [insert company name] outside counsel will comply with all reasonable requirements of [insert company name] with respect to its facilities.	=
D. Dashboard / Metrics	=
Suggested for top firms.	=
Data is powerful. We know that our outside counsel generates and track a significant amount of data about its clients and the matters on which it works. On at least a quarterly basis, [insert company name] asks that each of its outside counsel prepare and send to Legal Operations a dashboard or report of various metrics highlighting the relationship between the parties. The dashboard should include, at a minimum, the total invoiced amounts across all matters, the timekeepers staffed to matters, and the mix of AFAs provided. Also, outside counsel should include any other metrics that it thinks would be useful in showing the value of services provided and the effectiveness and efficiency of outside counsel.	=
E. Conflict of Interest	=
Our outside counsel must not represent a client that has an interest adverse to [insert company name], without our advance permission. Prior to agreeing to represent [insert company name] in a matter, outside counsel must complete, at its expense, a conflict check. The firm must determine that there are no conflicts or potential conflicts of interest with present or former clients of your firm that have not been resolved in writing between [insert company name] and your firm. We expect that you will immediately inform [insert company name] of any potential conflicts that may arise during the course of your firm’s work for [insert company name] Should a conflict be discovered at any time after [insert company name] has engaged your firm and should the conflict result in your firm’s withdrawal from a matter (whether at your, [XXX]’s or a third party’s request), you agree to reimburse [insert company name] for all costs and fees for work that must be duplicated by [insert company name] as a result of your withdrawal from the matter.	=
F. Third Party Providers	=
a) Court Reporters. We have selected [insert vendor name] as our court reporting service provider. Please remember we will not pay for videotaped depositions without prior, written approval, and we require that you provide us with an electronic copy of any transcripts for court reporter services for our matter(s).	=
b) Translation Services. We have selected [PrefProv1] and [PrefProv2] as our general translation and interpretation service providers.	=
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G. Dispute Resolution	=
The following sections are optional for inclusion in Outside Counsel Guidelines.	=
[Option A]	=
Escalation of Disputes. The parties agree to escalate any conflicts, disputes, or controversies (collectively “Disputes”) arising out of or relating to these Guidelines, the Engagement Letter, any Statement of Work, the Patent Prosecution Outside Counsel Requirements, or other document expressly amending the aforementioned (collectively, the “Engagement Terms”), to their respective managers before filing any legal action. The managers will meet and work in good faith to resolve the Dispute within a reasonable time period.	=
Mandatory Mediation. If the parties are unable to resolve the dispute as described above, either party may file a mediation demand with JAMS of Northern California, with the mediation to take place in Santa Clara County, California. The parties will work in good faith to select a mediator who is knowledgeable and experienced in the subject matter. All negotiations in connection with a Dispute, including negotiations with a mediator, will be conducted in confidence and without prejudice to the rights of the parties in any future legal proceedings. Neither party may file a lawsuit until the completion of the mediation described in this section. Each party will be responsible for their respective legal fees, except that the cost of the mediation will be divided equally between the parties.	=
Choice of Law, Venue, Jurisdiction. After the completion of the mediation described above, if no resolution is reached, a party may file a lawsuit to redress the Dispute at issue in the mediation, as follows:	=
Choice of Law. The Engagement Terms will be interpreted, construed and enforced in accordance with the laws of the State of California (without giving effect to its conflicts of law principles).	=
Venue and Jurisdiction. The federal district court in and for the Northern District of California or the Superior Court of Santa Clara County, California will have the exclusive jurisdiction and be the venue for any action initiated to enforce the Engagement Terms. The Parties waive all defenses of lack of personal jurisdiction and forum non-convenience.	=
[Option B]	=
Choice of Law and Arbitration. This Agreement is governed by California law, and any disputes arising under it will be resolved by binding arbitration according to the rules of the American Arbitration Association, with the arbitration taking place in Santa Clara County, California.	=
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