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A View from Inside Out: Ten Best Practices for Outside Counsel

Presented to the American College of Real Estate Lawyers by:

Joan U. Allgood, EVP - Corporate Transactions and Governance

Developers Diversified Realty Corporation

Rodney J. Dillman, General Counsel

Babson Capital Management LLC

Ronald L. Gern, General Counsel

General Growth Properties, Inc.

Patricia Habicht, Associate General Counsel

JPMorgan Chase & Co.

Moderator: Ann Peldo Cargile, Member

Boult, Cummings, Conners & Berry, PLC

Friday, October 6, 2006

Grand Hyatt Seattle

Seattle, Washington

A View from Inside Out: Ten Best Practices for Outside Counsel

Experience, Quality, Reputation and Demonstrated Expertise.

a) It goes without saying that in-house lawyers expect outside counsel to be knowledgeable and to provide high quality legal work. The last thing in-house lawyers want to do is hire someone that they have to train. Published materials and seminar participation matter, but a recommendation from an industry colleague can be determinative.

b) Having previously worked with an attorney, either on the same side of the table or the other side, is another important factor. The client knows what the client is getting. This prior relationship can be the foundation for getting the current deal closed.

c) High quality legal advice creates a foundation for future business. In-house lawyers expect outside counsel to deliver what they have requested, but consistently exceeding expectations will foster a long-term relationship.

d) Specialized knowledge or extensive staffing requirements drive the hiring of outside counsel, as opposed to handling matters in-house. Thus, demonstrated expertise and capacity are critical to the hiring decision.

e) A distinction exists between an attorney having the right qualifications, and how one finds that attorney. The best lawyers for a task may be passed by if in-house counsel has not had direct exposure to them on prior deals or does not have other means to identify them. The ACREL directory is a great source of contacts who have been vetted by their peers.

Responsiveness and Timely Completion of Assignments.

f) Timing is paramount. Be it a lease execution, a financing or an acquisition or disposition, a closing generally means the client anticipates a return on its investment and has budgeted on this anticipated timeline.

g) Establishing a realistic timeline is critical. Outside counsel should assist the client in establishing timelines that can be met from its business (not legal) perspective. Be prepared to meet the client’s established timeline. However, never promise and under-deliver. Clients prefer a realistic timeline, even if longer than a client may prefer, to missed deadlines.

h) Outside counsel must have adequate staffing to meet promised timelines. Outside counsel should never accept an assignment if the counsel has any concerns regarding staffing or timelines. Insufficient staff (or another transaction that delays the client’s work) cannot be an excuse for delays in that client’s work.

i) If outside counsel commences an assignment and then determines that the timeline is no longer realistic from a business perspective, counsel needs to advise the client immediately and endeavor to assist the client in finding creative alternatives to meet its business plans and objectives.

j) Prompt communication of hurdles to timely completion is imperative.

Fees/Cost Effectiveness.

k) The job of in-house counsel requires them to obtain legal services at the lowest appropriate cost for a given matter. This obligation does not translate into the lowest absolute cost each time, but this obligation does mean that costs need to fall into a range that achieves this objective. In this regard, legal services are a commodity no different than a variety of other important services to a real estate company. If the underlying legal matter more resembles a commodity, cost will be a significant driver in the decision process. If the underlying legal matter has more unique or significant aspects, cost will be a less relevant factor.

l) Clients appreciate flexible pricing formulas. One size does not fit all of the requirements from the client’s perspective. In certain instances, only a straight hourly rate will work. Even in these situations, clients will generally request a discount or a hold on current rates for a specified period of time. As a matter of philosophy, clients prefer to see a rate structure that better aligns the interests of the client and its outside lawyers. Examples of these rate structures include blended rates, caps, fixed fees and success-based fees.

m) Thin, but proper, staffing provides one of the keys to good cost control. Counsel must avoid redundancy. However, they must balance this with having enough staff to meet the client’s timelines. Outside firms also need to be sensitive to the use of junior associates. The firm, not the client, should bear costs relating to training and turnover.

n) Outside law firms need to understand that in-house counsel operate within budgets. Additionally, public companies have quarterly and annual earnings goals. Clients therefore need outside counsel to provide accurate budgets and to address deviations promptly. A blown budget can substantially undercut all of the effort that went into achieving a favorable outcome.

o) The billing partner should review bills critically before submitting them to the client. Pro-actively providing appropriate write-offs can be a great tool for achieving client satisfaction. As a tip, if it is not already part of your regular practice, make sure that the client knows about the write-offs so that you get credit for the effort.

p) Understand that clients do not always require 100% solutions. Business people and in-house counsel are accustomed to making decisions based on information that is good, rather than perfect. Before performing extensive (and expensive) work, outside counsel should communicate with the client to make sure that everyone is on the same page in terms of the scope of work needed.

Exercise Good Judgment. Be Practical.

q) Clients expect their counsel to identify and analyze issues and risks. But that is not enough. The lawyer who prioritizes the issues for the client, and offers suggestions to resolve or manage the issues, will get the “bonus points” and will most likely get the call from the client for the next deal.

r) A real estate transaction is a business transaction; not a law school exam or a negotiating contest. A good business lawyer is practical. Such a lawyer will help the client evaluate issues and risks, do a cost/benefit analysis, and decide on appropriate solutions that achieve the client’s goals. To do this, the lawyer must understand the client, its business, its goals, and its risk appetite. See Best Practice #6. Good lawyers also solve problems creatively. See Best Practice #8.

s) Remember the client may have an on-going relationship with its customer or other parties to the transaction. In negotiating a transaction, outside counsel must keep the effect on this relationship in mind. If the lawyer eliminates all risks, as opposed to manages risk, this may eliminate the customer. The best deals benefit both parties.

t) Sound judgment distinguishes a great lawyer from good lawyer, and is necessary to be an effective lawyer in the real world.

Communication.

u) Frequent communication that keeps in-house counsel informed of the progress of a matter provides the key to a successful relationship. Ability to identify and analyze not only the primary issues and risks, but also secondary and tertiary issues and risks and communicate them to in-house counsel makes both outside counsel and in-house counsel look good.

v) In-house counsel abhor surprises and so do those to whom they report. The bigger the surprise, the more problematic it will be for the client. An up-front understanding on the frequency and type of communication helps immensely. An email may be convenient for outside counsel, but depending on the message or news being delivered, a telephone call or an in-person meeting may be needed, so that counsel can answer the client’s questions and explore alternatives with it.

w) Outside counsel should deliver bad news immediately. In-house counsel should never hear it from a third party (or even worse from their bosses or Board members) before they hear it from you.

x) Accessibility is important. Lawyers who answer their own phones impress clients. If the client must go through an assistant every time the client calls, the client may get the feeling that the lawyer is screening the client’s calls, is too busy to talk, or does not find the client important.

y) If a client has an urgent matter, the client may need instant communication with outside counsel. If counsel is unavailable, the client will want to know when counsel will be available, so that the client can assess the downside of waiting. Some matters may require 24/7 attention and communication. It is the client’s job to let outside counsel know this on the front end. If counsel cannot commit to such terms, the client would rather know this at the outset. Clients understand that they generally are not a lawyer’s only client and that the lawyer may be personally committed to another matter. If the lawyer is up front about this, the client will respect that communication. Even though the client may decide to go elsewhere for that particular matter, the lawyer will have engendered the client’s respect, and retain the possibility of other work in the future.

Understanding the Client’s Business and Its Internal Dynamics.

z) Outside counsel must know and understand what drives the client’s business model.

aa) It is imperative that outside counsel understand its client’s business, since outside counsel represents the company, not the persons with whom the outside counsel interfaces. This entails understanding and balancing the respective needs of internal counsel and business clients.

ab) Outside counsel must understand the regulatory and business environment within which the client works and assist it in compliance matters. Closing the deal, but adversely affecting the client’s reputation, is not a positive result.

ac) Clients may require flexibility in addressing internal matters, which may include personality conflicts, closing requirements and training and development of in-house lawyers. Outside counsel must be prepared to address these types of matters.

Identify Legal and Reputational Risk Issues.

ad) In these times companies are and must be concerned about both legal and reputational risk. Companies realize that the profit from one transaction cannot compensate for a damaged reputation or remedy a compliance issue.

ae) Compliance is a top priority for many companies. Outside counsel can no longer leave awareness of regulatory issues solely to in-house counsel. Although in-house lawyers may have the regulatory expertise and should be consulted, outside counsel must understand the client’s regulatory environment and constraints when structuring a deal. They must know when to bring regulatory issues to the attention of the in-house lawyer or general counsel.

af) Be sensitive to reputational risk issues, and escalate such issues in the organization for decision, as appropriate. Even if something does not technically violate any laws or regulations, it may still raise reputational issues. The balance and sensitivities have changed. Lawyers cannot be passive. In addition to Sarbanes-Oxley, various regulators have issued guidelines on managing reputation and legal risk, particularly in complex structured finance activities. Companies, and their lawyers, need to look beyond their conduct and consider the overall effect of the transaction, considering, for example, whether a customer transaction could be viewed as intended to mislead third parties.

ag) Know your client. Your client is not the officer trying to close a deal and accommodate the customer, it is the organization. Rule 1.13 of the ABA Model Rules of Professional Conduct, has been amended recently to recognize the changing roles and responsibilities of a lawyer whose client is an organization.

Creativity.

The corporate world aspires to continuous improvement. In terms of individual transactions, in-house counsel want dealmakers rather than deal breakers. Generally, there are a number of good attorneys who can handle a given matter competently. However, one of the distinguishing characteristics of a “star” attorney is creativity: generating new or different solutions to a problem that sets that attorney, and hopefully the client, apart from their respective competitors.

Collegiality.

ah) There is no substitute for personal contact through telephone calls and meetings. Impersonal e-mails, although prompt, are not a substitute for meaningful discussion. Any matter of substance requires dialogue.

ai) A relationship established through both work and social environment will create a platform for resolution of issues, if they arise.

aj) A personal relationship with a partner or senior associate fosters open communication. Outside counsel can foster client loyalty, and keep the client by personal communications.

ak) The client must have someone to call, have a meaningful dialogue, and receive a substantive response. Someone must be in a position to take action when something goes awry, such as an unmet timetable or poor quality of work. Senior members of the firm must be accessible.

Intangibles.

al) In the interview process, nothing is better than getting into the substance of the matter and providing real-time dialogue and solutions. The investment in learning about the client and situation shows that potential counsel wants the engagement. The ability to provide solutions shows that outside counsel has the capability to handle the engagement and sets that person or firm apart from competitors.

am) Although there are generally a number of capable attorneys who can handle a given matter, the unique attorney provides meaningful help outside of the engagement. Examples include contacts and business opportunities for the client. In this regard, outside counsel needs to be careful to provide value rather than volume.

an) A firm’s representation with respect to industry issues and other clients can be a relevant factor. Also, even though representation of other clients in the same industry may not rise to the level of a conflict, law firms should understand that clients are sensitive about using the same law firm as a competitor.

ao) Outside counsel need to navigate conflict situations carefully, especially as they continue to increase in size. Conflicts regarding transactions can hopefully be resolved on a mutually acceptable basis, but litigation conflicts touch an emotional chord that is not easily reparable if breached.

ap) list of exhibits

Exhibit A Sample Guidelines for Outside Counsel

Exhibit B Sample Outside Counsel Usage Survey

Exhibit C Sample Regional Counsel RFP

Exhibit D Outside Counsel Evaluation Form

EXHIBIT A - SAMPLE GUIDELINES FOR OUTSIDE COUNSEL

I. OVERVIEW

The Company and its affiliates engage outside counsel throughout the country in a variety of matters every year. Controlling legal costs while ensuring the highest quality of services is a high priority for the Company. The cooperation of outside counsel is critical to achieving this goal. In an effort to facilitate the retention of outside counsel and the timely payment of statements for legal fees, we have designed the following guidelines and procedures. The Company welcomes your observations and suggestions for improvement to these guidelines.

II. GUIDELINES

The following guidelines apply to all matters referred to outside counsel, unless a different arrangement has been agreed to in writing. These guidelines supersede any conflicting terms of any previous engagement.

Scope of Engagement/Staffing.

aq) Outside counsel and the Company attorney supervising the matter (the “Company Lead Attorney”) should agree on the scope of the project and level of staffing at the beginning of any engagement. Additions or changes to the scope of the project or staffing must be agreed to in advance.

ar) Lawyers within the firm should be assigned to a matter based on their level of experience and expertise, so that the time billed reflects the highest level of knowledge and most efficient handling of the matter. In that regard:

i) We will not pay for “training” attorneys.

ii) Unless approved by the Company Lead Attorney, only one attorney shall attend out-of-office activities such as meetings, conferences, depositions or hearings.

iii) Communications between attorneys in the same firm are closely scrutinized. For example, the Company will not approve time charged (A) by attorneys in the same office which involves one attorney updating a more senior attorney on the status of a particular matter or issue, (B) where a senior attorney gives instructions to a junior attorney, (C) where one attorney is reviewing work or correspondence generated by another attorney, or (D) where several attorneys are reviewing the same document (unless the outside counsel responsible for the matter requests such review and such review is approved by the Company Lead Attorney.)

iv) The Company encourages the use of paralegals wherever possible and will pay the applicable rates for tasks performed by paralegals. However, the Company will not pay for otherwise routine clerical work (such as typing, faxing, photocopying, filing, “organizing file,” bates labeling, etc.) performed by paralegals. A paralegal has specialized training and experience, and tasks billed by paralegals should reflect such skills.

as) Outside consultants, other attorneys or expert witnesses shall not be retained without the prior written approval of the Company Lead Attorney.

at) Written engagement letters incorporating these guidelines are required for all initial matters handled by outside counsel not previously retained by the Company.

Fee Estimates/Budgets/Timeline. If requested by the Company Lead Attorney, a written budget and/or fee estimate will be established for each matter and approved by the Company Lead Attorney in advance of any services being performed. The budget or estimate should specifically identify the services to be performed, the identity and billing rate of each attorney and paralegal to be involved, the amount of time the matter is expected to take, and an estimate of fees and costs. In addition to the budget, outside counsel may be asked to develop a timeline or “critical path” outlining the estimated timing to complete the assigned project or to meet particular objectives. Budgets should be updated as soon as it becomes apparent that the original estimates will be exceeded or are otherwise no longer accurate. Invoices should reflect total fees and expenses to date as compared to the amounts budgeted for the project.

Files and Communication.

au) The Company maintains a complete file on each matter. Therefore, outside counsel shall provide the Company Lead Attorney with copies of all pleadings, correspondence, research memoranda or analyses, and other documents generated in any project or litigation matter. In connection with litigation matters, do not send us copies of documents that we originally sent to you (e.g., leases, purchase agreements, loan documents etc.), even if exhibits to pleadings. Please remove them prior to forwarding the documents to the Company Lead Attorney.

av) The Company Lead Attorney should participate in, and approve in advance, (i) all final documents prepared by outside counsel, including pleadings, motions, contracts or other similar documents, and (ii) all decisions regarding material aspects of a project or litigation matter as well as all matters that will require a significant expenditure of time and resources.

aw) Any communications with other Company personnel (such as leasing agents, property management personnel, accounting staff, etc.) should be initiated through the Company Lead Attorney in the first instance.

ax) In connection with any litigation matter, all requests for discovery from opposing counsel should be forwarded to the Company Lead Attorney as soon as possible, unless otherwise directed. Outside counsel should review the requests and attempt to develop responses, or provide the Company Lead Attorney with parameters for responding, such as which requests are objectionable or should be limited in some respect. Please allow sufficient time for review and comment (and, where applicable, signature) by the Company Lead Attorney.

ay) In connection with development, leasing or other non-litigation assignments, all requests for required information from the Company should be forwarded to the Company Lead Attorney as soon as possible to allow sufficient time to prepare such materials. Counsel should discuss with the Company Lead Attorney as soon as possible any third-party consents (e. g., lenders, joint venture partners) that may be required in connection with the assignment.

Invoices/Statements. All statements for services must be submitted on a monthly basis and must detail those services actually performed during the month preceding the date of the statement. Each matter must be billed separately, although separate invoices may be mailed together. No task or matter should be billed under a “general” or “miscellaneous” designation unless agreed to in advance by the Company Lead Attorney. When a matter is referred to your firm, a subject reference or other specific billing designation will be provided. For example, most landlord/tenant matters are referred to by state, city, and shopping center name, or by a Company accounting code. Note that the Company may have more than one shopping center in a given city. Therefore, it is critical that the name of the shopping center appear on each invoice. Services should be billed only to the particular matter for which they have been performed. All statements should be directed to the attention of the Company Lead Attorney, who will be responsible for approving the statements and processing them through the Company’s General Counsel and ultimately to the Company’s accounting department for payment. All invoices listing costs and disbursements must reflect outside counsel’s actual cost without any markup. For all matters, please note:

az) Outside counsel should not send duplicate statements to any other Company person, department, entity or address unless requested by the Company. Duplicate statements will only delay the processing of the statement and increase the likelihood of errors in payments.

ba) Each statement should set forth the name, address and Federal Tax Identification Number of the payee.

bb) Statements for each matter should set forth the period during which the services were performed, and the fees and itemized disbursements for the referenced matter during that period.

bc) Each statement must also set forth the cumulative fees and disbursements charged by your firm to date for each matter.

bd) Each statement should set forth an itemization of services performed, including a detailed, substantive description of the services (avoid non-descriptive categories such as “attention to file,” “general” or “miscellaneous”), who performed the services, the date the services were performed, the time involved, and the amount due for the services.

be) Descriptions should be sufficiently detailed to permit the Company Lead Attorney to evaluate the relation of the task to the time charged. For instance, entries such as “Research,” or “Telephone conference with witness” are insufficient. Proper entries would read “Research statute of limitations of contract claims” or “Telephone conference with Mr./Ms. _____________ re: mitigation efforts.”

bf) All time must be kept using an hourly billing format and using tenths-of-an-hour (.10) segments.

bg) Travel time must be reflected separately from other tasks. For example, if travel is to a hearing, the travel time should be noted separately from the time allocated to the hearing.

bh) Each lawyer’s and/or paralegal’s name and hourly rate should be listed in the statement, as well as a summary of their total time and expense.

bi) Annual or other hourly rate changes will not be effective unless agreed to by the Company Lead Attorney in advance.

An example of an acceptable billing statement is attached as Exhibit A.

Disbursements/Expenses. Invoices will not be approved for payment unless they are accompanied by an itemization of disbursements and costs. All disbursements (other than for travel) must be invoiced within sixty (60) days after such expenses are incurred. Travel expenses must be invoiced in the month in which the travel occurred. As a general matter, all material disbursements should be approved by the Company Lead Attorney in advance and should be “at cost” without any “mark-up.” The Company will not pay for a firm’s overhead and fixed costs. For example, we will not approve for payment any of the following charges unless specifically pre-approved in writing:

bj) Overtime or administrative support charges for secretaries and other non-legal office personnel.

bk) “Word processing” or proofreading.

bl) Any time relating to the preparation of billing statements, status reports, filing, “file organization, “file maintenance,” or “file management.”

bm) Finance charges, late fees or interest.

bn) Postage (excluding overnight carriers).

bo) Excessive or unnecessary photocopying charges.

bp) Incoming or outgoing faxes.

bq) “Scanning” or “.pdf” document charges.

br) Staff service charges (for example: office meals, after-hours transportation).

bs) Local telephone calls or any calls to the Company, regardless of whether local or long distance. The Company has a toll-free number that you are welcome to utilize ( ).

bt) Mileage and parking charges within the general location of your office.

bu) Office supplies.

bv) Travel agent fees.

Examples of disbursements that the Company will reimburse include the following:

a) Photocopying: reasonable or necessary photocopies made by outside counsel’s offices will be reimbursed at the lesser of actual cost or $.06 per page (large copy projects must be approved in advance (e.g., transaction bibles). Upon the Company Lead Attorney’s request, the Company’s preferred provider for photocopying will be utilized.

bw) Computerized legal research based on actual usage. However, no computerized or third-party legal research (such as Westlaw and Lexis) resulting in a separate charge to the Company should be performed unless approved in advance by the Company Lead Attorney. Pro-rata allocations of monthly “subscription” charges or flat fees will not be reimbursed.

bx) Courier/messenger/overnight delivery services, if such means of delivery is requested by the Company Lead Attorney or is otherwise absolutely necessary. Outside counsel should use email, .pdf or other electronic methods of delivery (e. g. posting documents to a website) whenever possible to reduce delivery costs.

by) Long distance telephone charges to third parties if appropriate detail is provided.

bz) Travel and lodging expenses to the extent approved in advance by the Company Lead Attorney.

Travel Expenses. Expenses for lodging, meals and transportation must be itemized separately. Travel and lodging expenses must be approved in advance by the Company Lead Attorney. Descriptions of such expenses should be specific, indicating the date of travel, reason for travel, origin/destination and identity of person who incurred the cost. Specific guidelines for travel expenses follow:

ca) Copies of receipts supporting the charges must be attached to the invoice.

cb) Air travel must be at coach or economy class, and travel arrangements must take advantage of any discounts or special rates wherever possible. Similarly, rental cars should be a mid-size or equivalent vehicle unless approved by the Company Lead Attorney. If traveling with the Company personnel, outside counsel should coordinate with the Company Lead Attorney to make travel arrangements through the Company’s travel service.

cc) Travel time should relate only to services performed solely on behalf of the Company during that time, in which case the entry will reflect the work performed. Further, as indicated above, travel expenses must be billed in the month in which the travel occurred.

cd) In the event that a particular project involves members of outside counsel’s firm who are located in different offices, the Company will not reimburse for any counsel’s travel between such offices unless approved in writing in advance by the Company Lead Attorney.

ce) Mileage will be reimbursed at no more than the then-applicable rates approved by the Internal Revenue Service.

cf) Expenses for meals while traveling must be reasonable and appropriate.

cg) Outside counsel should consult with the Company Lead Attorney and utilize any Company preferred provider of travel and lodging whenever possible.

Third-Party Consultants/Expert Witnesses. Third-party consultants, local counsel and expert witnesses may not be retained without the prior approval of the Company Lead Attorney. If such parties are paid by outside counsel, any request for reimbursement shall be subject to the same guidelines as set forth above (i.e., substantiation of expenses, description of work performed, etc.). If such parties submit their invoices to outside counsel for payment directly by the Company, outside counsel shall submit the invoices as soon as possible, together with an acknowledgement that the invoice appears appropriate for the work performed.

Exhibit A

Sample Invoice

[Firm Name]

[Date]

Attn: [THE COMPANY Lead Attorney}

Matter: Federal I.D. No. _____________

[City and State]

[Shopping Center Name]

[THE COMPANY Property Code]

For professional services rendered for your account relating to the above matter for the period commencing ________1, 200_ and ending ___________ 31, 200_.

Fees for Professional Services $ ____________

Disbursements $ ____________

Total Due for this Invoice $ ____________

See Attached for Detail.

Invoice Date: ________________

Invoice No. _ __________

Our File No. ___________

Matter:

[City and State]

[Shopping Center Name]

[THE COMPANY Property Code]

Professional Fees

Date Services Attorney Hours Rate Amount

__/01/0_ [Description] James Doe 5.00 $____ $_______

__/05/0_ [Description] Jane Smith 3.00 $____ $_______

__/15/0_ [Description] James Doe 6.00 $____ $_______

Total 14.00 $_______

Summary of Fees for this Matter

Name Title Hours Rate/Hr. Amount

James Doe Partner 11.00 $________ $_______

Jane Smith Associate 3.00 $________ $_______

Disbursements

Date Description Amount

_______ __________________ ________

_______ __________________ ________

Total $________

Matter Summary

Fees Disbursements

Year-to-Date

Since Matter Inception

exhibit b - sample Outside Counsel Usage Survey

1) How many law firms have you worked with in the past three years? Please name the primary ones.

2) What matters did these firms handle and what type of legal services did these law firms provide? (e.g., fund formation - complex knowledge work, document review -commodity heavy lifting) Please break down the type of work by law firm, matter and type of work. (i.e., complex vs. commodity)

Firm name Matter Type of Work

3) Which of the following attorney attributes or factors play the greatest role in your choice of outside counsel? Please list the numbers of the relevant factors in order of importance:

1. Extensive experience in the legal areas in which you require services

2. Familiarity with your business operations and needs

3. Cost discipline

4. Billing rates

5. Prompt assignment completion

6. Availability and responsiveness

7. Reputation

8. Staffing capacity

9. Trial experience

10. Willingness to share risk

11. Technological expertise

12. Flexibility

13. Geographic location

14. Diversity

15. Innovation

16. Broad cross-company expertise

17. Experience working with this law firm

18. Experience working with a particular attorney/partner

4) A lack of which of the above-named factors will prevent you from retaining a certain law firm? Please list the numbers of the relevant factors in order of importance:

5) A lack of which of the above-named factors will not influence your decision to retain a certain law firm? Please list the numbers of such factors:

This document was prepared from materials provided by the General Counsel Roundtable. For information about the General Counsel Roundtable go to .

exhibit c - sample regional counsel rfp

[OFFICE OF GENERAL COUNSEL LETTERHEAD]

[Date]

[Name]

[Firm]

[Address]

Re: Regional Counsel Program

Dear [name]:

We are considering a new approach to selecting outside counsel. Traditionally, we have retained one or more outside counsel in each State to close and service our commercial mortgage loan transactions. We have reviewed the results of this program and have decided to adopt the “regional counsel” model. Specifically, we intend to consolidate our use of outside counsel for the closing and servicing of commercial mortgage loans in order to ensure consistent high quality legal service, maximize efficiency and reduce legal expense.

Under the regional counsel system, and with limited exceptions, we will select a single law firm within each of five geographic regions to close and service all commercial mortgage loans made within a region. Selected firms should demonstrate a high level of legal and transaction skill and professionalism while working cooperatively with our in-house attorneys, our loan underwriters and the borrower’s counsel, to achieve success for the client. We have several goals in mind in implementing the regional counsel model including: 1) to foster efficient execution and delivery of legal services by increasing the volume of transactions delivered to regional counsel; 2) to reduce outside legal fees and expenses and thereby maintain a competitive expense structure in the commercial mortgage loan market; 3) to obtain the highest quality legal representation, and 4) to form and maintain partnering relationships between us and the selected firms. After the initial selection of regional counsel, we would expect a joint annual review of the results, concerns and pricing, and make adjustments where appropriate.

To this end, we are initiating a proposal process among selected existing and new outside mortgage loan counsel. We have included your firm on a short list of firms from which we would like to receive a proposal and presentation, to be selected as our regional counsel for all new loans to be closed in the [Selected Region] Region. Please note that, while we would like to hear about your expertise in the following types of matters, these matters are specifically excluded from the regional counsel program: mezzanine lending; affordable housing loans; capital market transactions; real estate acquisitions, dispositions and joint ventures; and bankruptcy, insolvency and workout matters. Please consider this letter as a Request for Proposal inviting [Firm] to propose terms and capabilities for our selection. We ask that you provide us with a written response (as described more fully below) either in person at your upcoming presentation or delivered (mailed or emailed) in advance if you so desire.

As we discussed over the telephone last week, your firm’s presentation has been scheduled for [date] at our offices located at [address]. In addition to your attendance, we would like to meet the person or persons at your firm who will have primary responsibility for our account, and who will be performing the majority of the day-to-day legal services in closing loans.

To assist in your preparations, we have enclosed a document entitled “List of Regions and Personnel.” This document contains a list of our current regional offices, the level of staffing in each office, and the states included in each region. The [Selected Region] is headquartered in [Regional Location] and includes the states of [itemize states in region]. To give you an idea of the volume of activity in recent years, in 2004 this region placed __ loans with an average size of $__ million. In calendar year 2005, the region placed __ loans, with an average size of $___ million.

Also included under this cover is a copy of “Instructions to Local Counsel with Respect to Mortgage Loans” (the “Instructions”) which describe our policies and practices governing all aspects of our relationship with outside counsel. The Instructions address our approach to real estate investing, in-house counsel, local counsel, legal fees, expenses and billing, the loan closing process, lease reviews, title and survey, and other matters. We ask that you review the Instructions prior to our scheduled meeting, as it should give you a better understanding of the Company, the loan closing process and type of relationship we are looking for.

Please be prepared to discuss: your firm’s real estate finance expertise; experience with regional and/or national matters; how you intend to staff transactions, and identify by name and qualifications specific individuals that will be working with us; the procedures in place for checking conflicts; your specific technical, software and email capabilities; and the manner in which you intend to provide the type and quantity of legal services anticipated. With respect to conflicts, we would appreciate it if you would let us know in advance of your submission whether there are any known legal or business conflicts that should be addressed before going any further.

We invite you to provide creative fee proposals to reduce legal expenses such as: fixed fee arrangements, fee caps, fee collars, blended hourly rates, relationship discounts, volume discounts and other value based billing arrangements. We also ask that you be prepared to discuss your firm’s standard rate schedule, and the hourly rates of the individuals that will service our account. If rates differ by state or region, please include the rate schedule for all areas within the [Region]. If you have questions about how to proceed with a proposal, please contact one of us at the number listed below.

We would encourage you to review our web site prior to our meeting located at [web address] respectively, for useful information about the Company.

We look forward to your presentation and discussing with you in detail our goals, expectations and objectives.

|Very truly yours, | | |

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|General Counsel | | |

|Tel | | |

|Fax | | |

|Email: | | |

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