In-house ACCess : In-house ACCess: Association of Corporate Counsel : ACC : The In-house Counsel Bar Association

While change in the relationship between corporate clients and law firms over the next several years will be revolutionary in nature, it will be evolutionary in development.  Folks will work on one or two things at a time, and each new piece of progress will become the foundation for the next three things.  The result will be the realization that meaningful and beneficial change is implementable in a scalable and reasonable fashion, and that it can lead to sustainable profitability for firms and better results for clients. What we need to do short term is move to developing the flexible toolkit that allows us to better fashion “value” business models for each matter, each client and each firm.   And, we need to actually take action: to move from agreement with principle to implementation of new practices.

Here are ten aspects to the change agenda that will drive the revolution, whether from the client or the firm.

1. Just the Facts: Data, metrics, targets and goals now need to drive lawyer services and will be used to measure the value of lawyer work product; it will no longer be the primary job of a lawyer to apply legal analysis – it will be to drive solutions to the client’s legal problems. Legal expertise will be assumed and quality work will be the floor, not what distinguishes one lawyer or one firm from another.

2. Up-front analysis and early case assessment:  Defining value, setting expectations, and making cost and staffing decisions must happen before work begins on a matter; we will not throw work over the wall to our firms and then hope they get it right. In advance of any engagement, we need to make decisions about how firms will work on entire portfolios of work, and discuss how in-house counsel and firms can – working together – do the work better and more efficiently. We will leave the presumption that some kind of Vulcan mind meld we may have shared on a matter 6 years ago appropriately sets and communicates shared expectations for current matters to the next Star Trek reunion episode.

3. Focus on process planning and mapping:  We must establish the firm / department Six Sigma plan:  in this plan, legal services will be unbundled, broken up into parts and assessed for what can be done more efficiently and by whom. Those that do that work, and who do it over and over again, will get better and better at it and will continue to improve the process, and we will actually send the work to the providers who are most appropriately trained and compensated to achieve desired results.  

4. Staffing: In this new landscape, staffing options and decisions will drive fee structures. This includes the use of non-lawyers, off-shoring, contract lawyers, flexible work options, focus on “horses for courses,” when to use partners vs. associates, re-training / business skill education that drives “non-legal” skill sets that drive value (such as financial and valuation skills, project management, knowledge management, etc. – see #9 below).

5. Performance and improvement criteria: Another critical aspect will be ongoing performance evaluation, accountability and analysis of outcomes at the conclusion of each matter in order to make the next project even better. Being a good lawyer who works really hard is not enough to distinguish you from hundreds of other good lawyers who can provide excellent legal services and bill lots of hours. Lawyer evaluation will be performance-oriented and skill-based.

6. Value-based billing: Fee arrangements will drive “value-based” billing: we will figure out what the work is worth before the billing begins so that we may go to a flexible toolkit of options and select the options that work best. There will not be any one presumed “default” method of billing such as the billable hour. The toolkit will allow firms to develop predictable cost/service provision structures and clients to develop predictable budgets by working collaboratively to value the work at the onset of every project.  

7. Knowledge management I: In this case, for most legal work, we don’t need to reinvent the wheel. This goes for both firms and clients. Firms and departments will mine and re-use knowledge to empower lawyers to spend time on what’s different in any particular case, not waste time and talent reinventing what’s the same.  Firms will be known for their success strategies based on a viselike grip on what’s been done before that’s worked or failed.

8. Knowledge management II:  There will be an emphasis on predictability and accountability. How is it that a firm or client has provided some kind of legal service hundreds of times, but doesn’t know what it will cost to provide what is essentially the same service next time? The firm and client both will likely spend time in the coming years reinventing their management of the service models. They need data about what works, what it costs, etc., all drawn from metrics and data based on real experiences.

9. Lawyer need business skill sets: In order for lawyers to meet the threefold challenges of change behavior/management, the evolving value conversation with corporate management, and the newly presumed financial accountability, lawyers will become more focused on executive and business skills to complement their legal background.

10. Alignment: Realistic alignment of goals and executionwill be the hallmark of successful client and firm relationships, and not the “competitive” zero-sum mentality that has grown in recent years.   Risk sharing and reward-sharing will be the goal of each relationship.

Before we know it, what may seem like a slow motion change will have created a revolution in legal services…

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The second day of a two and a half day conference can sometimes wane in attendance and engagement, but Day 2 at ACC’s 2009 Annual Meeting in Boston didn’t show any sign of diminishing interest. Attendees dispersed throughout the exhibit hall for their morning coffee and croissants, while chatting with the 100⁺ exhibitors and sponsors on hand to offer insight about their services and in-house counsel offerings. The majority of this year’s sponsors were returning exhibitors, but there were a number of new organizations, as well. Washington, DC-based law firm, Sutherland Asbill & Brennan LLP, was one of the new firms exhibiting this year, and Felice Wagner, Chief Client Service Officer, said it was a great experience for the eight attorneys that joined her.

“It was illuminating for some of the attorneys to not only see the number of in-house counsel, but also, the number of Sutherland clients that were here. The high-level of the attendees, along with their genuine interest and engagement, has been great,” Wagner noted.

A long-time supporter of ACC, and recipient of the 2009 President’s Award, Ogilvy Renault, too, believed there was a higher level of engagement with those they spoke to. Senior Partner, Andrew Fleming, commented that this year attendees were not just looking for general information, but had specific questions. “We’ve spoken to attendees that had questions about a particular issue, or to others that weren’t happy with their current outside counsel and interested in learning more about Ogilvy.”

Lise Monette, Ogilvy’s Chief Marketing Officer, was happy with the added feature of being able to qualify leads on the lead tracking device, saying that it will be useful for when they get back to the office and coordinate follow up plans for those they spoke to at the conference.

For others, the Annual Meeting provided a platform for unveiling new products and/or services geared toward the in-house counsel market. Fios Inc., a provider of electronic discovery services, and Ajilon Legal, a worldwide expert in legal staffing and litigation management, unveiled a partnership to help corporations and law firms effectively inject cost control and predictability into the complex e-discovery process.

Brad Gragert, senior vice president of sales at Fios, noted that "By combining the core Fios and Ajilon competencies and expertise, legal teams now have a single resource for processing, review and production services. Additionally, our combined services will provide legal professionals with improved cost predictability and budget management for e-discovery projects."

The ACC/Serengeti Managing Outside Counsel Survey was released during the meeting, and the media and attendee interest kept Rob Thomas, Serengeti’s Vice President of Strategic Development, busy. For the first time in three years, the survey found that controlling spending on outside counsel returned as the top priority for in-house counsel, topping compliance concerns. The need to drive efficiency is leading to more value-based policies to reduce overall legal spend, and clients are looking to negotiate more flexible value-based fee and service models.

“In-house counsel want a single online system where they can manage all of their legal work directly with all of their outside counsel worldwide, not a maze of different law firm extranets or internal systems that don’t connect with outside counsel,” says Thomas, the author of the survey report.

Several of attendees that stopped by the Serengeti booth asked Thomas about the survey, wanting to know more about this year’s findings and interpretation of the data. Thomas, too, acknowledged that substantive inquiries dominated the questions he addressed with this year’s attendees.   

Practical Law Company, a leading provider of practical know-how for business lawyers and newest ACC Alliance partner, introduced its new “PLC Law Department” service, which will officially launch in 2010.  Designed to help in-house law departments maximize value, practice more efficiently and control legal spend, the new service has been catered specifically for legal departments to make sure they have the practical resources needed to get the job done.

“The interest in hearing about the new service has been terrific,” explained Ian Nelson, PLC’s Vice President of Business Development and Marketing. “We’ve had great interaction with everyone that has stopped by to learn more about the service and many have had questions about substantive issues and how to use practical resources to be more efficient.”

At a time when it is critical to be as efficient as possible and deliver even greater value to clients, it’s no surprise that attendees were interested in hearing more about ways to streamline internal processes. The topic was repeated many times throughout conference and during the session, “The Slow Motion Riot – Revolutionizing Law Department Cost Management,” law department leaders and law firm management discussed how the ACC Value Challenge can help to support this high priority goal of efficient, effective and professional practice.

For Jeff Carr, Vice President, General Counsel & Secretary of FMC Technologies, Inc., value means “efficiency, effectiveness and customer satisfaction,” something to which he holds his outside firms accountable to. And, the move away from the billable hour (yes, fodder, for a future – more in-depth Blog post) is forcing law firms to sit up, listen and respond to the wave of change that is forcing alternatives to the traditional business model. While law firms grapple with the increased demands, in-house counsel, too, are wrestling with their own internal processes to ensure greater efficiency and value-based legal services.

The over 100 event sponsors and exhibitors that were on hand  - from international law firms, to top litigation support providers and to leaders in knowledge management – were all afforded with the unique opportunity for one-on-one interaction with in-house counsel to educate them about cost efficient solutions.  As ACC President Fred Krebs noted, “I often hear from in-house counsel that they welcome the opportunity to interact with Annual Meeting sponsors as it provides them with a one-stop way to engage with organizations and learn more about value-based solutions.”

As this year’s Annual Meeting approaches its final sessions, the information gleaned from the sessions, interaction with attendees and conversations with supporters will be taken back to legal departments for implementation. For some, it will provide them with a new way of thinking and acting, for others it will reconfirm processes already in place. And, while the tchotchkes and give-aways were fun and drew interest, it will be the tools, resources, educational information and newly formed relationships that will have long-term value.

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