The In-House Counsel Perspective

I just came across this fascinating blog called The Legal Thing: notes from a General Counsel by Mike Dillon, the General Counsel of Sun Microsystems.

Mike's blog is interesting because it's not about a niche area of the law. And it's not even just about being the GC of a Fortune 500 company. If you scroll through his various postings, you'll find a wide variety of topics -- many of them tech-related, of course. But what I find really interesting about his blog is that you get the sense that he considers his role in the company to be that of a businessman first, and a lawyer second.

On that score, look at his post from Monday: Life is Different In-House. In it he lists the 10 rules he believes all in-house counsel should follow to be successful. The first rule is -- "You are a business person."

Now nowhere in his 10 rules does he say anything about billable hours or alternative fees, the subject of this blog. But if you read the rules closely, you find throughout the concept of the in-house lawyer adding value to the organization. Too many in-house lawyers get the reputation for being the guys who always says "no" instead of being a value-add to the corporation (though note Mike's Rule #10 in which he argues that sometimes the lawyer just has to say "no").

While these rules were written for the corporate, in-house lawyer, I don't see any reason why outside counsel cannot follow them as well. Outside counsel need to think of themselves more in terms of providing true value to the companies they represent. We need to be a value-add, not a value-drain.

That brings me back to the subject of this blog: alternative fees. Billing by the hour and simply spending as many hours as you think are necessary to win the case or complete the task is a value-drain and not a value-add, even if the eventual legal result is good. Good legal work plus an alternative fee agreement, properly structured, can provide outstanding value to a corporate client.

I don't know if Mike uses alternative fee agreements with some or all of his outside counsel representing Sun, but given his focus on value, I would not be surprised if he did.