Note: This case study by Wendeen H. Eolis has previously appeared in the New York Law Journal. I republish this article in 4 parts during December 2009 in response to current client demand for advice on law firm retention arrangements (whe).
Sitting as the chief judge in a succession of law firm beauty contests, John Wise*, president of a high-profile communications business, listened intently to the pitches for his company's pressing big-ticket litigation. Jim Foreman* his newly appointed general counsel and I, their legal consultant were with him. The purpose of the meeting was to select special counsel.
With eight hours of interviews at three law firms under their belts, Messrs. Wise and Foreman were poised to pick the pageant winner and sign on the dotted line. They sealed their selection with a call to the winning contestant that evening. During the interviewing process, Mr. Foreman had been duly impressed with the key partner; he had proffered a processional of legal talent and demonstrated an abundance of legal prowess while marketing his firm's wares. Mr. Wise was sold on the firm's presentation and anxious for Mr. Foreman to get the law firm on board.
The prize-winning firm's "intake" committee blessed the engagement, the next morning. A "welcome" letter" followed within hours. Attached to the welcome letter was the law firm's standard retention agreement"”a document with an appropriate two-fold purpose (for the law firm): a) to trigger the green light for the new representation and b) to secure the firm's financial interests in a matter that was projected to approach $1,000,000 in legal costs to my client. The agreement set forth the scope of the work, and included general statements as to the firm's billing practices and called for an evergreen retainer in the amount of $50,000.
Mr. Foreman's mandate was to "embrace" their new counsel- not to dissect the wording of the agreement or nitpick over fractional issues. He signed the firm's standard engagement letter and transmitted it with his company's check for $50,000 as a rolling retainer-- in the blink of an eye; the firm's advice was on the way.
The second part of this article will appear on December 8.
