Tuesday, October 4, 2016

A New Conversation: On OCGs and Terms of Business

I was pleased to spend some time recently with Anthony Davis, partner at Hinshaw & Culbertson. We captured our discussion, which focuses on the growing prevalence of client-imposed outside counsel guidelines, and strategies for managing compliance with these increasingly stringent terms of business: "In Conversation: Focus on Outside Counsel Guidelines."


Anthony: Outside Counsel Guidelines (“OCGs”) are a serious and growing problem, and are causing havoc and distress in multiple areas of law firm operation. To use the words that the English regulators have used to assess this phenomenon, what’s going on really threatens the independence — in some instances, even potentially, the viability — of law firms that seek to represent large or increasingly, even mid-size corporations. It’s a significant problem, with a number of different dimensions.

In general terms, OCGs are a problem because clients are making demands that are, or may be:
  • impossible to agree to without putting the firms at risk
  • impossible to agree to without severely limiting the firms’ ability to practice for multiple clients
  • dangerous because of the controls and limits placed on the ways in which law firms actually provide services to their clients
  • increasingly burdensome administratively because of requirements such as the obligation to keep track and comply with the “guidelines” that firms do agree to accept.
You don’t speak with a firm of any size anywhere in the U.S. or the UK without hearing that it’s a problem. And a growing problem that is causing huge heartaches for law firms.

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