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

The ACC Value Index (AVI) is a tool meant to inform in-house counsel decisions as part of a larger process of selecting and retaining a law firm. The AVI is a searchable database for in-house counsel to share subjective evaluations of the firms they engage.  It is key to note that this is a process that already takes place naturally among in-house counsel who often seek their colleagues opinions on firms that offer good value.  The Value Index builds upon this tradition by encouraging in-house counsel to contact or “ping” other evaluators to discuss the firm’s work in greater detail.

As we begin the process of rolling out law firm access to certain information in the Value Index this week, I want to take a moment to outline the who/what/when/where/how and why underlying this process.

Who – Access is being offered to law firms evaluated in the ACC Value Index since its October 2009 launch.

What – Each evaluated law firm will be able to access aggregated results pertaining to that firm.  This includes average scores for that firm by criterion, office location and matter type.  The firms will also receive overall Value Index averages for benchmarking purposes. Here’s an example of what a law firm would see:

When -- Starting today, February 3, 2010, through the foreseeable future.

Where – Access to the information will be available to law firms through an online portal on ACC’s Web site using the protocols below. 

How – Here are the key steps for law firms to gain access to the AVI information:
1.    Firm management decides who in the firm will manage the AVI access to the firm’s results.
2.    The firm representative who will serve as the “administrator” on behalf of the firm goes to the AVI Law Firm Access Portal at: http://www.acc.com/valuechallenge/valueindex/lawfirms to obtain administrator access.
3.    The administrator can then view the firm’s AVI results anytime and share them within the firm.

Why – As I wrote on this blog last October during the ACC Value Index launch, coinciding with the overarching goal of the ACC Value Challenge – information gleaned from the AVI will help to foster a greater dialog between clients and their outside counsel.

The AVI is only one part of the ACC Value Challenge, which encompasses a larger effort to reconnect value to the cost of legal services.  Other aspects include a) “Meet. Talk. Act.” which encourages clients and law firms to engage in discussions about value and their relationship; b) a law firm economic model; and c) specific resources with examples of value practices and ideas on ‘how to’ implement practices focused on value.  Resources, success stories and updates are continually added to the ACC Value Challenge community pages and we encourage law firms to get involved and help to provide additional information/resources.
 

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What do retired in-house counsel do?  Well one thing is that we read all those news notes on the bottom right-hand corner of the screen on the Bloomberg Channel. One that caught my eye this morning concerned the 2010 forecast for law firms.

ACC Value Challenge or not, it appears that law firms are going to be seeing a more gloomy economic picture this coming year according to the head of Citibank’s Law Firm Group in New York. The title of the article states that law firm revenues in 2010 can fall as much as 10% over last year and the article goes on to state that after laying off junior lawyers and staff last year firms will be looking to reduce even equity partners.

What is even more surprising is that more lawyers were laid off in the third quarter than the second quarter.

So what does this mean for in-house counsel?

First, your bargaining position on price has dramatically improved and is likely to do so through 2010, perhaps beyond.

Second, the big firms with high fixed costs—you know downtown paneled offices, lots of art on the walls and big paper book libraries—should be most willing to accept work at big discounts. Disregard survey claims about price increases—watch the layoffs.  My former employer had high fixed costs and I learned there in bad times you were glad to take unprofitable business because any contribution to fixed costs was welcome.

Third, and ironically, this is not going to be all good news for in-house counsel, since stressed firms will be offering companies a less costly and variable cost alternative to the fixed costs of employed counsel. Apparently, in-house counsel are bringing work inside—that is great, during my career I was “Mr. Do It All In House,” but remember you are still a fixed cost so you are going to have to do it a lot better, not just cheaper. This is not perhaps what we had in mind when we coined the term value billing, but it is today’s reality.

Fourth, all those unemployed private law firm lawyers will be out there looking for work—and you know what oversupply does to salaries. Some of those unemployed law firm lawyers may start their own practice and could be good alternatives to firms who try to raise rates—remember those laid off lawyers were likely the ones who actually did your work.

Looks like those green shoots and rosy (less bad) employment numbers of a few days ago just do not apply to the legal profession.

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