Legal playbook · AI Employee: Lex

Outside Counsel Engagement

Every engagement documented; no rogue spend

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The problem

Outside counsel is expensive and unpredictable. In-house legal engages three different firms across the year without central oversight; each engagement has its own scope creep, its own hourly rates, its own invoicing quirks. General Counsel discovers the total legal spend at year-end and it's 40% over budget; nobody can explain which matters ran hot; the firms don't compete on pricing because they never have to.

At a glance
Trigger
Form
Approvals
GC approval
What it does
Writes to your systems
Systems
Ironclad · Billing
How it feels in production

An hour-by-hour walkthrough.

In-house counsel Sarah needs to engage outside counsel for a specific SaaS-M&A matter. She messages Lex: "need outside counsel for SaaS acquisition, target Beta Corp, expected close Q1 2027, $80M deal size." Lex assembles the engagement packet: - Matter classification: SaaS M&A, deal-side counsel, target-side of the transaction - Panel firms qualified: 3 firms on our M&A panel (Wilson Sonsini, Cooley, Fenwick — with our negotiated rate cards) - Prior similar engagements: 4 SaaS M&A deals in past 24 months, avg legal spend $340K, best-firm-value per matter shown - Budget estimate: $250K-450K based on deal complexity + estimated hours - Proposed engagement scope: definitive agreement drafting, diligence review coordination, closing, regulatory filings (HSR if applicable) - Recommended firm: Firm X based on similar-deal performance + capacity + specialist availability GC reviews + approves engagement + budget. Lex sends the engagement letter to the firm, sets up matter tracking, configures invoice review with alerts on budget deviation, and schedules weekly matter-status check-ins. Through the engagement, Lex tracks: hours logged, budget consumed, scope changes, matter-status. When budget hits 80% consumed, GC gets alerted with variance analysis. When matter closes, Lex captures outcome data + firm performance for future panel review. Outside counsel becomes a managed function, not a runaway expense.
How it works

Step by step.

  1. 01

    Intake engagement request with matter context

    Matter classification, expected scope, timeline, deal size / complexity. Attempts panel-firm matching before opening new engagement.

    Slack · Web form · Matter classification · Panel firm registry
  2. 02

    Estimate budget from similar prior engagements

    Historical data from similar matters. Confidence-scored estimate. Never blind estimate; always grounded.

    Matter history · Analytics · Firm performance data
  3. 03

    Recommend firm from panel + rate cards

    Panel firms with negotiated rates. Recommendation based on: similar-matter performance, capacity, specialist availability, prior GC satisfaction.

    Panel firm registry · Rate cards · Performance data
  4. 04

    GC approval + engagement letter execution

    GC reviews + approves. Engagement letter sent with scope, rate, budget cap, reporting cadence. Signed + filed.

    Approval flow · Engagement letter template · Ironclad
  5. 05

    Matter tracking + budget monitoring + outcome capture

    Hours logged, budget consumed, scope changes, matter-status. Alerts on deviation. Outcome data feeds future panel decisions.

    Matter tracker · e-Billing · Budget alerts · Firm scorecard
Systems and wiring

What you connect to make this run.

Panel firm registry · Rate cards

read+write

Approved outside counsel firms + negotiated rates. Panel management + performance tracking.

e-Billing · SimpleLegal · Onit · Tymetrix

read+write

Invoice ingestion + review + budget tracking. Line-item review; billing-guideline enforcement.

Matter management · iManage · NetDocs

read+write

Matter-level record: scope, budget, hours, documents, communications, outcome.

Ironclad · DocuSign

read+write

Engagement letter execution + storage. Standard engagement templates per matter type.

What changes

Before and after, honestly.

Legal spend visibility (real-time vs. quarter-end)
Before
Quarter-end surprise
After
Real-time budget tracking
Engagements exceeding budget by 20%+
Before
40-60%
After
10-15%
Time to engage counsel
Before
1-3 weeks
After
1-3 business days
Panel firm competition on pricing
Before
Minimal
After
Structured (per-matter comparison)
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Engagement letters queryable through the same lookup mechanism.

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M&A engagements involve heavy redline; joint tooling.

Frequently asked

Answers about this playbook.

What about matters requiring specialist firms not on our panel?

Off-panel engagement path with additional GC review + one-off rate negotiation. Common patterns become panel candidates over time.

How does it handle regulatory filings requiring specific-jurisdiction counsel?

Jurisdiction-scoped panels. Some panels include local counsel in key jurisdictions; others engaged on matter basis with GC approval.

What about conflict-of-interest checks?

Firm-level conflicts tracked. Matter routing avoids firms with conflicts. Multi-firm engagements coordinated for adverse-party representation issues.

How does it handle billing-guideline enforcement?

Line-item review against billing guidelines (no partner rates for junior work, no travel time above X, etc.). Automated deduction proposals; GC reviews.

Can it handle contingency-fee or alternative-fee arrangements?

Yes — supports hourly, flat-fee, success-fee, hybrid arrangements. Budget model per fee structure; outcome tracking calibrated per arrangement type.

See it run on your data.

Free plan, no credit card. Connect the systems this playbook needs and run it against a past event first.

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