Creating a Value-Based Relationship with Your Outside Counsel

Michael Roster has been a vocal advocate for re-thinking the management and philosophy of running a legal department for many years. He began developing his innovative strategies while serving as a partner at Morrison & Foerster, managing the firm's Los Angeles office and serving on its policy committee.

He was able to put these ideas into practice in 1993 upon being named General Counsel of Stanford University, Stanford Medical Center and Stanford Management Company. Well before the idea was even close to fashionable, Roster moved nearly all of Stanford's outside legal work to a handful of law firms working on fixed price retainers for both counseling and litigation. But more than just an initiating an economic strategy, Roster integrated these attorneys into the fabric of the legal department to create a value-based relationship that incorporated his vision of how to maximize efficiency and function. He supplied Stanford's outside firms with on-site offices so the attorneys could attend the weekly staff meetings. In addition, these attorneys were listed in the telephone directories as though they were formal members of the law department staff. In short, outside counsel were embraced as part of the team instead of keeping them at arm's length.

After leaving that position, Roster served for seven years as Executive Vice President and General Counsel of Golden West Financial Corporation, and is currently a director of MDRC, a New York-based nonprofit corporation that evaluates the effectiveness of government and other nonprofit programs. He also teaches an upper level contracts course at the University of Southern California Law School that aims to elevate students to an associate level in contacts by the end of the course.

For the past four years, Roster has co-chaired the ACC Value Challenge Steering Committee, an initiative designed to re-integrate value into the cost of legal services. Incorporating the same thought process Roster advanced at Stanford, the ACC Value Challenge recognizes and attempts to bridge the disconnect between many law departments and their outside counsel. It is an attempt to create a dialogue that will foster a greater sense of trust and enhance the true value of the relationship between inside and outside counsel.

Roster recently gave the keynote address at the annual Customer Conference for the LexisNexis matter management and e-billing solution, CounselLink, where he discussed meeting the challenges of value-based relationships. While at the conference, I had the opportunity to interview Michael Roster. The following is a Q&A on the subject of creating meaningful value-based relationships with outside counsel.