We are four lawyers dedicated to working closely with each of our clients to find efficient, business-oriented solutions to complex legal issues. After our years in Big Law and corporate legal departments, we now run small firms. Our legal experience and entrepreneurial mind-set, combined with recent technology advances, enable us to provide top-notch legal services efficiently. Our mission at The Candid Counsel is to share key lessons we’ve learned from our years of representing business clients, to suggest tips on working with outside counsel, and to foster a candid conversation between in-house and firm lawyers.

Your Company ABC Just Bought Company XYZ, Could Adding XYZ’s Outside Counsel to Your Legal Team Spell Win-Win?

Your Company ABC Just Bought Company XYZ, Could Adding XYZ’s Outside Counsel to Your Legal Team Spell Win-Win?

The Candid Counsel Could Adding Outside Counsel to Your Legal Team Spell Win

Imagine for a moment the following.

Lauren Jones, General Counsel of Awesome Coffee Company (“ACC”) has just helped ACC complete an acquisition of Susan’s Fabulous Teas and Trinkets (a beverage and lifestyle brand) (“SFTT”). As part of the diligence process, Lauren’s team determined that SFTT has spent several years developing its marketing strategy and has implemented extensive compliance processes. SFTT has focused on its privacy policy, consent procedures, and “do not call” text and email protocols. SFTT’s focus on these policies and procedures began several years back, when the Federal Trade Commission (“FTC”) made inquiries concerning SFTT’s privacy policies, and threatened an enforcement action. Ultimately, working with its General Counsel and longtime outside counsel Melissa Sharp, SFTT demonstrated to the FTC staff that SFTT fell within a safe harbor exempting it from “do not call” violations because SFTT maintains a “do not call” policy, regularly trains its customer service representatives regarding the policy, diligently records any “do not call” requests and subscribes to the federal “do not call” database, among other actions. The FTC closed the investigation without any adverse action. SFTT also has been successful fending off litigation in the same context, while many of its competitors have not been so fortunate.

Lauren has been occupied with ACC’s aggressive growth campaign. SFTT is the fourth company in the last 18 months that ACC has acquired. She wonders whether ACC and its new subsidiary companies have sufficient compliance controls in place. Certain of the companies rely on telesales, email and text marketing, and use social media influencers to promote products on Facebook and other social media sites. Lauren has a solid in-house team, but none of the lawyers have advertising and marketing expertise, or experience dealing with federal and state agencies that regulate these practices. Lauren also wonders about the risks of private litigation, including class actions, involving texts and calls to mobile phones under the Telephone Consumer Protection Act. She recently read that Papa’s Coffee Company settled a purported class action for $ 5 million alleging the unlawful sending of coupons by text.

In light of these developments with ACC’s growth, Lauren thinks that perhaps it is time to expand the legal marketing expertise within her team. SFTT’s general counsel, Harry Dunn is leaving the company post-acquisition, but mentioned that Melissa Sharp is an incredible resource for SFTT and has done work for SFTT for over 20 years. He indicated that Melissa has extensive institutional knowledge and is a tremendous resource. Melissa recently sent Lauren a note asking for a meeting. Does it make sense to retain Melissa, essentially keeping on legacy counsel from SFTT and perhaps using her to advise ACC’s other companies?  

The answer is YES!

While company counsel normally brings in its own “team” when there is an acquisition, completely giving up legacy outside counsel may result in the loss of substantial resources. I am pleased to say that I have several clients today because they acquired my client’s companies but retained me to continue advising the acquiring company (and other subsidiaries). By attempting to “clean house” with new counsel, you may actually be increasing costs as new counsel would have to come up to speed on the issues and the background, while legacy counsel likely knows it like the back of her hand. In addition, legacy counsel usually has relationships with operations personnel and may know key things like who are the best witnesses in your subsidiary company for, say a 30(b)(6) deposition (“use John, he’s great, and he describes our procedures with depth and clarity, plus he’s brilliant on a cross-examination”).  

Another aspect where legacy counsel can be incredibly beneficial is in counsel’s relationships with regulators, legislators, and even opposing counsel your company may encounter. By way of example, I have a client I have represented for over 25 years. During this time, I have established relationships with key regulators, who know from our dealings that this client uses best practices in its compliance procedures. I have said several times, “we didn’t come up with this defense just because we got your letter, these are procedures the company has established over the course of many years and I have helped with their implementation.” Another client recognized that I had solid relationships with plaintiffs’ counsel in an industry ripe with litigation, and that I had a record of resolving matters quickly and efficiently. There was no need to recreate the wheel. Legacy counsel can bring her skills, knowledge of the law and the business, with minimal (if any) onboarding time.  

In short, there are many reasons to retain legacy counsel, including institutional knowledge, established relationships, and, particularly in the midst of ongoing litigation or other matters, a continuum of services, expertise, and strategy. It makes sense, of course, to outline any new expectations, whether there are new billing procedures or other organizational mandates. Having been the legacy counsel several times, I can tell you that a longtime counsel will truly value your trust and seek to do the best job for you and your organization. Legacy breeds loyalty and is a win-win for the company, the in-house counsel, and the legacy counsel.



Under Government Investigation? There May Be Insurance Coverage For That

Under Government Investigation? There May Be Insurance Coverage For That

Attorney’s Fees in a Company’s Criminal Investigation Are Like Rabbits

Attorney’s Fees in a Company’s Criminal Investigation Are Like Rabbits