In-House Counsel – Spring 2016 -- Quiz #2 – Outside Counsel
TOTAL POINTS: 10 points
NAME: ______
READ QUESTIONS CAREFULLY. This is “closed book”; do not use any materials.
Send answers to no later than when time is called.
Question #1 (5 points): You work in a 4-lawyer legal department of a large retail company with many stores located throughout the U.S. The company’s headquarters office, including the legal department, is located in Iowa. Your company’s stock is publicly traded on the New York Stock Exchange. Like many in-house counsel in small departments, you work as a generalist, but also have somewhat of a specialty; yours is employment law. You just learned that your company has been served with a complaint in a federal court in California, styled as a class action, alleging that your company has violated state and federal wage and hour laws because it incorrectly classifies store assistant managers as “management” and therefore exempt from overtime regulations. The complaint demands damages for class members (all store assistant managers, current and past), including substantial back pay (for allegedly uncompensated overtime). This is the first employment-related lawsuit filed against your company in many years and the first class action lawsuit. The company had previously settled amicably whatever employment-related disputes and claims it had received from its current or former employees, prior to formal litigation.
(a) Explain whether or not you would hire outside counsel and why or why not.
(b) Assuming you decide to hire outside counsel, explain:
o How you would choose outside counsel
o How you would work with and manage the selected outside counsel
Question #2 (5 points): You are an in-house lawyer in the legal department of a biotech company, headquartered in Boston (where you work). The legal department has 4 lawyers, including you, plus the general counsel. All the in-house lawyers report to the general counsel. You spend some of your time on trademark related matters, but you are mainly a generalist. The general counsel asked you to handle a breach of contract lawsuit filed against your company by a supplier with whom your company stopped working. Your company has operations in several states, and this particular lawsuit was filed in California state court, where the supplier is based. Your company’s primary outside counsel in Boston, with whom you work on some trademark matters, does not have an office in California, and recommended California litigation counsel (from a different law firm), and that’s who you retained. Since you first hired California counsel, you have been very busy on other urgent matters. You assumed that not much was going on with the lawsuit because you hadn’t heard from California counsel for a few months. However, you just now received the first invoice from California counsel, and it’s at least 3 times higher than you expected – more, in fact, than you thought you would spend on legal fees for the entire case. From the entries on the invoice, it looks like California counsel has been very busy, researching a variety of legal points, taking multiple depositions, and filing multiple motions in court – none of which you knew about. Budgets are very tight in your company, and your boss, the general counsel, will not be happy with this situation.
If you could roll back the clock and had a “do over,” describe everything you could have done to help prevent this situation from occurring.