OCG Compliance has become a hot topic area for both large and midsized law firms and it looks like it will continue to be so in the new decade. Clients are getting more sophisticated in how they are enforcing billing rules which is costing law firms money, but it is more than just that. Once a law firm agrees to the client's guidelines then the client has the right to assume that the members of the firms involved in their matters both know what is in the guidelines as well as being able to comply with them.

In a typical firm guidelines are brought in by the lead attorney landing the new client. They are typically reviewed by counsel and then agreed to and sent back to the client after some slight modifications. Then the billing rules are, hopefully, sent over to the billing manager before the OCGs are put onto the law firms DMS and forgotten about. With a growing scrutiny on compliance, and a competitive market for law firms retaining clients, this will need to change.

A survey was published in December of 2019 by the ALA and Bellefield (now owned by Aderant) which came up with some concerning results. The survey results identify that the majority of law firms (51%) do not have staff to effectively manage outside counsel guidelines. Today, the majority of firms leverage mainly email or filing in the DMS as a form of communicating guidelines to attorneys and require no acknowledgement receipt. In fact, 23% of firms have no process in place at all, and the majority of lawyers, industrywide, (56%) do not know what is in the guidelines. Here is a link for more on the survey https://legaltechnology.com/latest-news/bellefield-and-ala-release-results-of-1st-annual-law-firm-leader-survey-on-outside-counsel-guidelines/

So what is a law firm to do?

Step 1. Come up with a process

Saying that there is not enough staff to deal with a problem will not make it go away. I firmly believe that the process of dealing with OCGs begins with the people in the Intake and Conflicts department of a firm. Whenever a new client is brought into the firm Intake needs to make sure they have the OCGs and they should be in charge of who sees them and who approves of what is in them. Prior to approval the OCGs should be broken down by which departments in the firm will be responsible for approving their individual groups of terms involved in that document. Those individuals within each department need to read the terms of the guidelines that are applicable to them and whether agree to follow those terms or communicate where the firm needs to push back. Once that information is collected then it goes to counsel for review and redline. The lead attorney can work with counsel and the client to get a mutually acceptable group of guidelines to follow.

Step 2. Communication

Now that the firm and client agree on the guidelines it is time to make sure that the members of the firm dealing with that client know what has been agreed to so that they can at least attempt to comply. The two main groups in the firm that this effects are the attorneys working on the matters for that client and the billing department. There are others in the firm that need to be communicated with as well including IT, HR, pricing etc. If we are expecting to send the OCG and have that person comb through it for the small amount of information that applies to them then we are dreaming. Best practice in this area is to come up with a bulleted summary of the information for each group of people in the firm with just what applies to them. The person reading these should be required to acknowledge that they have read the summary and be able to ask for clarification as needed from their department head.

Step 3. Manage and Review

Key dates in the document including activities like approval of timekeepers and rates need to be assigned to tasks and calendared. Also a few months before renewal of the OCGs there should be a task set for review of the guidelines so they can be amended by the firm as needed. Most times it is the client sending over new guidelines instead of the firm being proactive in this process.

Technology is advancing quickly to help firms with each area of this process. I am always eager to hear new ideas on how firms are managing their OCGs and best practices in doing so.

John Blake is a veteran in the law firm billing and compliance space. He has worked at Thomson Reuters Elite, Bellefield and currently is employed by Fulcrum Global Technologies as Director of Sales. He has met with literally hundreds of law firms throughout the US and is a national speaker on OCG compliance. He can be reached at jblake@fulcrumgt.com.

For more information on Fulcrum Global Technologies you can visit us at www.fulcrumgt.com.