Law firm guide
Outside counsel is a lawyer or law firm a company retains rather than employs. Companies pick it through relationships and referrals, panels, RFPs and billing terms, and they add a new firm when work arrives that the incumbent cannot cover.
Book a demoLast updated September 28, 2026
The short answer
Outside counsel is any lawyer or firm a company retains rather than employs. Relationships and referrals come first; panels, RFPs and billing guidelines decide who gets in, and on what terms. A new firm often comes in for work the incumbent cannot cover: a conflict, a new state, a deal, a new kind of matter. Clean finds companies at moments that create legal work.
Outside counsel is a lawyer or law firm a company hires for legal work instead of employing. In-house counsel are on the payroll: the general counsel and the lawyers who report to them. Outside counsel get paid for the matters sent to them, under an engagement letter that sets the scope and the fee.
Model Rule 1.13(a) settles who the client is: a lawyer retained by an organization represents the organization, acting through its duly authorized constituents. A person hires you (the general counsel, the CEO, or the owner where there is no in-house lawyer), but your client is the company. The general counsel guide covers that buyer's job in detail.
Two other meanings travel with the term. Outside general counsel is a firm acting as the whole legal department for a company too small to hire one. Government agencies also retain outside counsel under their own procurement rules. This guide covers the bigger case: companies choosing firms for their matters, and what that means for a firm that wants to be chosen.
Larger companies often run several routes at once: a panel for routine disputes, a trusted partner for deals, an RFP when the board wants a documented process. The route a matter goes through tells you whether a new firm can get considered at all, and how.
Relationships and referrals come first because they are fast and carry someone's trust. A general counsel with a signing next week calls a lawyer they know, or asks someone they trust for a name. The formal routes decide who is allowed in, and on what terms.
Outside counsel selection routes and how a new firm gets considered
| Selection route | How it works | How a new firm gets considered |
|---|---|---|
| Direct relationship | The GC, CEO or owner calls a lawyer they already know, often with no competing bid | Be known before the need: past work together, a former colleague, useful exchanges over the years |
| Referral | The incumbent firm, another lawyer, an accountant, a banker or a director suggests a name | Be the obvious name for one kind of work; never pay for recommendations beyond what Rule 7.2(b) allows |
| Panel or preferred firm list | Approved firms on agreed rates and terms; in-house lawyers use them unless a step-out applies | Get into the next panel review, or cover a specialty, state or conflict the panel cannot |
| Request for proposal (RFP) | The legal team, sometimes with procurement, invites proposals, scores them and interviews a shortlist | Get on the invite list, then price the work to fit their billing guidelines |
| Insurer panel counsel | On a duty-to-defend policy, the insurer picks defense counsel from its panel or lets the insured pick from it | Join the insurer's panel, or be the firm the insured asks for, ideally before the policy starts |
| Investor or board network | At companies with institutional investors, the investors' regular firms and directors' suggestions can carry real weight | Be known to the investors and directors, not only the legal team |
Panel counsel means two things. At an insurer, panel counsel are the defense firms it approves to represent policyholders on liability claims, picked for experience in the coverage lines it writes and for accepting its billing rates. At a company, the panel (or preferred provider list) is the short roster of firms the legal department has approved, usually with negotiated rates, billing rules and reporting duties.
Law firm convergence is how corporate panels get built: the legal department consolidates its outside counsel spend into fewer firms. Fewer firms means fewer invoices to review and fewer firms to chase every time a billing rule changes. It also puts the department in a better bargaining position: deeper rate discounts, fixed fees, and portfolio arrangements across many matters. A structured process might start with an analysis of which firms handle what, add interviews with the in-house lawyers, then move to requests for information and proposals before the negotiation.
Two facts matter for a firm outside the panel. The in-house lawyers get asked which firms they want kept, so a firm they already know and rate goes into the process with an advantage. And well-designed panel programs keep step-out procedures for work the panel cannot do (for example a niche specialty, a state where no panel firm practices, or a matter where every panel firm is conflicted). That step-out is the realistic door for a smaller firm.
On the insurance side, insurers sometimes let an insured use a firm that is not on the panel, especially when the request comes before the policy starts and the firm has handled that coverage line. When an insurer pays you to defend its policyholder, Model Rule 1.8(f) still requires the client's informed consent, no interference with your professional judgment, and protection of client information under Rule 1.6.
A formal RFP tends to show up when a company is converging its roster, hiring for a large or unusual matter, or needs a documented process for the board or procurement. The questions look alike from company to company: relevant experience, the named team and who will actually do the work, rates and a fee proposal, alternative fee options, conflicts, information security and budget reporting. Many companies then interview a shortlist.
Invitations tend to go to firms the legal team knows or was pointed to, which is why the relationship work comes first. Once you are invited, answer in the company's order and in its own matter types. Two pages showing your named team has done this exact work for this kind of company beat a firm brochure.
Under the comment to Model Rule 7.3, a communication that responds to a request for information is not a solicitation. Rule 7.1 still governs every line: nothing false or misleading, and no past results presented so they create unjustified expectations. Name clients or matters as references only with their consent (Rule 1.6), and call a lawyer certified in a field only when an approved certifying body is named (Rule 7.2(c)).
Outside counsel guidelines are the rules a company sets for the firms it hires. New firms tend to skim them, which is a mistake: the guidelines decide whether invoices get paid in full and whether the legal team finds you easy to work with. They vary, but the same areas come up again and again (listed below).
Two details trip up new firms. Task codes are typically those of the Uniform Task Based Management System (UTBMS), which classify each time entry on an electronic invoice so the legal department's software can test it against the guidelines. And ABA Formal Opinion 512 (July 2024) says a lawyer must disclose generative AI use when the engagement agreement or the client's guidelines require it, and may not charge a client to learn a tool the lawyer will use regularly.
Hourly billing still dominates: the Thomson Reuters Institute's 2026 report on the US legal market says about 90% of legal dollars still flow through it. General counsel also say they want pricing they can plan around (see what general counsel want from outside firms), so a fee proposal with a fixed or capped option for a defined phase is worth including.
The common alternatives are a fixed fee for a defined matter or phase, a capped fee, a blended rate, volume discounts for panel firms, a portfolio fee across routine matters, and success or holdback terms. Under Model Rule 1.5, any fee must be reasonable, the scope and the basis or rate of the fee must be communicated (preferably in writing) before or within a reasonable time after the work starts, unless you bill a regular client on the same basis, and a contingent fee needs a writing signed by the client.
Replacing a firm that does good work is disruptive for a legal team, so a new firm often comes in as an addition. Each moment below brings work the incumbent may not be set up to cover.
Four habits follow from how selection works. None of them depends on reaching a GC on the right day.
This is not legal or ethics advice: check your own state's rules, and ask ethics counsel when in doubt. Model Rule 7.3(b) bars live person-to-person solicitation (in person, live phone, real-time video) when a significant motive is pecuniary gain, unless the person is a lawyer, has a family, close personal or prior business or professional relationship with you, or routinely uses that type of legal service for business purposes. That last exception does not cover every executive, and a company doing something for the first time may not qualify. California has no business-purposes exception, and Florida treats cold calls as prohibited solicitation.
So the default first touch is a truthful written message: a letter or an email, not a call, a DM or a chat. Written solicitations still fall under Rule 7.1 and Rule 7.3(c): no further solicitation once someone says they do not want to hear from you, and no coercion or harassment. Some states add more. Among other things, Florida requires "Advertisement" as the first word of an unsolicited email's subject line, a statement of qualifications that covers experience in the relevant area, submission to the Bar for review at least 20 days before first use unless exempt, and, when a specific occurrence prompted the message, a statement of how the lawyer learned of it. California requires the word "Advertisement" or words of similar import on written solicitations to someone known to need legal help in a particular matter, with narrow exceptions.
Run conflicts before any pitch, never pitch the other side of a deal your firm is on, and never pay for a recommendation beyond what Rule 7.2(b) allows. The limits travel with anyone acting for you: under Rules 5.3 and 8.4(a), a lawyer can answer for solicitation that BD staff, assistants or an agency carry out on the lawyer's behalf. The corporate clients guide covers these rules in more depth.
Every route above rewards the firm that is already known, and specific, when a company reaches a moment its incumbent may not cover. Clean finds companies at moments that create legal work: a large contract won, a real estate deal or new site, new import activity, a new license or registration, and an acquisition. For each company it shows the reason, the practice area it touches, the person who hires outside counsel (usually the general counsel, the CEO or the owner), and who in your team's network can introduce you.
You tell Clean who to look for by industry, company size, region and the kind of matter you want, and who to leave out, such as current clients. Each reason comes with the record behind it, and Clean uses no intent data. Your lawyers decide whether and how to reach out; Clean does not send messages for you. See Clean for law firms, or book a demo to see companies in your market with a moment that creates work in your practice, and who to reach.
Outside counsel is a lawyer or law firm a company retains for legal work instead of employing directly. In-house lawyers, led by the general counsel, are on the payroll, while outside counsel are paid for the matters sent to them under an engagement letter. Under ABA Model Rule 1.13, a lawyer retained by an organization represents the organization itself, even though a person, such as the general counsel or the CEO, does the hiring.
Many start with lawyers they already know, or with names from people they trust: another lawyer, the incumbent firm, an accountant, a banker or a director. Larger legal departments formalize the choice through preferred firm panels, requests for proposal and outside counsel guidelines. When several firms are in the running, experience with the exact matter type, the named team and the fee proposal tend to decide it.
Panel counsel has two common meanings. At an insurer, panel counsel are the defense firms it approves to represent policyholders on liability claims, chosen for experience in its coverage lines and for accepting its rates. At a company, the panel is the short list of firms the legal department has approved, usually with negotiated rates, billing rules and reporting duties. Well-designed panel programs keep a step-out process for work the panel cannot handle.
Law firm convergence is the process a corporate legal department uses to consolidate its outside counsel spend into fewer firms, which then become its panel. It often starts with a review of which firms handle what, adds interviews with the in-house lawyers, then moves to requests for information and proposals and a negotiation. Fewer firms mean less administration and more bargaining power on rates, fixed fees and portfolio arrangements.
Outside counsel guidelines are the rules a company sets for the law firms it hires. They typically cover approved rates and notice for increases, who may bill, time increments, task codes for electronic invoices, budgets, expenses, confidentiality, publicity and, in some cases, generative AI use. Read them before the first time entry, because invoices that break them get cut or sent back.
Companies hire outside counsel when work goes beyond what the in-house team can cover: disputes, deals, specialized regulatory work, matters in states where their lawyers are not admitted, and conflicts. They add a new firm at moments such as a first government contract, a first import program, an acquisition, expansion into a new state, a new general counsel, or pressure to cut legal costs.
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