Outside Counsel Guidelines Explained

Outside counsel guidelines are a set of rules a corporate client gives to the law firms it hires. They spell out how the firm must bill, staff matters, protect data, and handle conflicts. Legal teams often shorten the name to OCGs.

Think of an OCG as the client's rulebook for working together. The engagement letter says the firm is hired. The guidelines say how the work must be done and billed.

This guide explains what OCGs cover, who issues them, and why they matter. It also covers the new AI rules clients now add, and how firms find and track each client's version.

What are outside counsel guidelines?

Outside counsel guidelines are written rules a client sets for the law firms it hires. They control billing, staffing, data security, and conflicts for every matter the firm handles.

OCGs are operating instructions, not a pitch or a contract for a single case. One set of guidelines usually applies across all the firm's work for that client.

Most guidelines are 5 to 30 pages long. Larger companies tend to have longer, stricter versions.

• OCG stands for outside counsel guidelines.
• They apply to the whole client relationship, not one matter.
• They sit alongside the engagement letter, not inside it.

Who issues outside counsel guidelines and why?

Corporate clients issue outside counsel guidelines, usually through their in-house legal or legal operations team. The goal is to control cost, reduce risk, and keep every firm working the same way.

The Association of Corporate Counsel, the main body for in-house lawyers, publishes sample guidelines that many companies copy. Legal operations groups like the Corporate Legal Operations Consortium also shape best practice.

Clients use OCGs to protect budgets and enforce their own values. A well-built OCG drives cost control, billing consistency, and faster invoice review.

• Issued by: the client's in-house legal or legal ops team.
• Shaped by: bodies like the ACC and CLOC.
• Purpose: cut cost, cut risk, and align every firm.

What do outside counsel guidelines typically cover?

Most outside counsel guidelines cover billing, staffing, data security, conflicts, insurance, and budgets. These are the areas where clients most want control and predictability.

The ACC sample guidelines set out billing rules in detail. They ban block billing, require task narratives, and list which work counts as non-billable.

A common failure mode is missing the small print on non-billable items. Firms often bill for legal research databases or unapproved travel, then face write-downs because the OCG quietly forbids it.

• Billing: rate rules, invoice format, no block billing, budgets.
• Staffing: experience levels, change notices, diversity of the team.
• Data security: how client data is stored and protected.
• Conflicts: what the firm must check and disclose.
• Insurance: required malpractice coverage limits.
• Non-billable items: research tools, clerical work, some travel.

Do outside counsel guidelines now cover AI?

Yes. Since 2024, many clients have added AI rules to their outside counsel guidelines. These rules control how firms may use generative AI on the client's work.

The ACC now publishes sample AI guidelines for outside counsel. Common clauses cover disclosure, data security, accuracy, and whether AI use is billable.

A frequent rule bans uploading confidential client data to any public AI tool. Firms that miss this clause risk a breach of the guidelines even when the work product is fine.

• Disclosure: tell the client when AI is used.
• Data security: no confidential data on public AI tools.
• Accuracy: a human must check AI output.
• Billing: AI time may not be billable at full rates.

What are outside counsel billing guidelines?

Outside counsel billing guidelines are the billing section of the OCG. They set the rate rules, invoice format, and what the firm may and may not charge.

Typical rules ban block billing, require detailed task narratives, and cap or freeze rates. Many clients also require monthly matter budgets and e-billing through set software.

E-billing systems enforce these rules automatically. The software rejects or flags any line that breaks a coded guideline before a human ever sees it.

• Rate rules: approved rates, freezes, and increase limits.
• Invoice format: required fields, timing, and detail.
• Enforcement: e-billing software auto-flags bad lines.

How do you find and track a client's outside counsel guidelines?

You get a client's outside counsel guidelines directly from the client, usually at the start of the relationship. There is no public database of company OCGs, so most firms request them from the in-house legal or procurement contact.

Large companies such as Walmart, Meta, or Goldman Sachs each keep their own private version. You cannot look these up online; the client sends them, often through an e-billing or vendor portal.

Track each client's version in a central place so nothing gets missed. Guidelines change over time, and the newest version always controls.

• Ask the in-house legal, procurement, or legal ops contact.
• Check the client's e-billing or vendor portal for the file.
• Store every client's OCG in one shared, dated location.
• Re-check for updates at each renewal or new matter.

How do law firms stay compliant with outside counsel guidelines?

Firms stay compliant by reading each OCG carefully, coding its rules into their systems, and training the team that touches the matter. Compliance is a process, not a one-time read.

The best firms turn the guidelines into a short internal checklist per client. Billers, associates, and partners then follow the same rules without re-reading 30 pages each time.

Modern e-billing and matter tools automate much of this. They block non-compliant time entries and flag staffing or budget breaches before an invoice goes out.

• Summarize each OCG into a plain-English client checklist.
• Code billing and staffing rules into the e-billing system.
• Train the whole matter team, not just the billing clerk.
• Re-check the guidelines whenever the client updates them.

OCGs vs engagement letter vs billing guidelines

These three documents are related but do different jobs. The engagement letter hires the firm, the OCG sets the operating rules, and the billing guidelines are the billing part of the OCG.

Reading them in the wrong order causes disputes. The engagement letter may point to the OCG, and the OCG usually controls how the firm actually gets paid.

Nothing here is legal advice; it is general information. For your own contracts and guidelines, consult qualified counsel.

• Engagement letter: hires the firm and sets scope and fees. A contract for the matter.
• Outside counsel guidelines: the full rulebook on billing, staffing, data, and conflicts. Applies to all work.
• Billing guidelines: the billing chapter inside the OCG. Governs rates, invoices, and non-billable items.
• Who signs: the engagement letter is signed; OCGs are usually accepted by starting work.