Live From New York: The Wired GC Unmasked!
January 31, 2007 | Filed Under Selling the GC, In the News
It wasn’t Saturday Night Live, more like Sunday Night at the Improv.
As promised last month on the occasion of the second birthday of The Wired GC, the mask is getting to be more of a burden than a benefit. I am definitely not the greatest american lawyer, but I’m not a fiction, either.
Last Sunday, I attended a pre-launch party for BlawgWorld 2007 in New York City. By some sort of administrative error, The Wired GC was invited.
I had intended to spend the evening with a bag over my head, but that made it hard to get through security at a certain Gotham City nightspot.
I stopped Bruce MacEwen of Adam Smith, Esq., as he was about to leave with a very attractive woman to attend a private party thrown by Bono (or Madonna, I forget which). Suddenly the dreaded legal paparazzi jumped out from behind a phalanx of bloggers and snapped this picture:
I’m on the left; legal insiders know that Bruce is on the right.
I enjoyed finally meeting Bruce, whose work was not only featured in BlawgWorld 2006, it was the exemplar. It was also great to see many other lawyer-bloggers at the event, including Matt Homann, Ron Friedmann, Tom Mighell, and Arnie Herz.
So that’s all for now; the modest venture alluded to here will be unveiled next month. It’s colder than a well digger’s @** in the Midwest, and a trip to Florida stands between yours truly and the final end of anonymity in late February.
Enough of the inside baseball; back to work tomorrow.
Cisco GC Talks Real Legal Tech
January 30, 2007 | Filed Under The Client Speaks, Law Firm Trends, Technology
The 25th anniversary LegalTech conference is going on in New York City as we speak. Many good people are speaking; good solutions are on display.
Moving West, there’s a different take on legal tech. It’s in the form of a speech by Cisco GC Mark Chandler (hat tip: WSJ Law Blog).
Simply stated, the speech defies a capsule summary. Every in-house lawyer should read it; every law firm managing partner should make it a discussion piece at the next firm meeting. Mr. Chandler isn’t talking about incremental tech-driven change in the approach to delivering legal services to business.
The phrase “paradigm shift” is overused, but that is exactly what Mr. Chandler is talking about: using technology to lower costs and improve legal services, current billing conventions be damned.
Print out Mr. Chandler’s speech, and read it with a highlighter. It really should be the starting point of a discussion. Not a debate, because change isn’t negotiable for forward-thinking GCs.
My personal favorite is this excerpt:
The bottom line is that I’m driven by the same need for productivity improvements as is the rest of the company. It’s simple. As Cisco gets bigger, the share of revenue devoted to legal expense needs to gets smaller. Letters from law firms telling me how much billing rates are going up next year are therefore totally irrelevant to me, or as we say in Silicon Valley, orthogonal to my concerns. Think about it: not one of the CIOs of your firms expects to get a letter from Cisco explaining how much more our products will cost next year. And not one of our suppliers comes to us to tell us how much their prices will go up next year. So from my perspective, I don’t care what billing rates are. I care about productivity and outputs.
I have also written about the annual law firm rate-ratchet-racket. Some firms still see annual increases (up to 20%!) as an intrinsic part of the their business model. Good luck with that…
One last thing in the vein of full disclosure: I have seen a beta version of the Legal On Ramp site Mr. Chandler mentions; content from The Wired GC may be offered to participants.
Dishing on Corporate Culture
January 29, 2007 | Filed Under Managing, Compliance
Lynn D. Lieber writes in the Corporate Counselor with some great ideas on how to advance compliance with a culture-based approach.
A few main points:
• Make ethics a priority;
• Set a good example of ethical conduct;
• Keep commitments;
• Provide information about culture and compliance;
• Consider ethics in decision-making; and
• Talk about ethics in the workplace.
One reality that a corporate counsel faces is playing with the hand that is dealt in the sense of the people in the company. One of the best long-term strategies for a strong ethical culture is hiring good people.
You can’t look over everyone’s shoulder all the time.
Ah, if creating the proper culture were only this easy:
Charging Rates?
January 25, 2007 | Filed Under Law Firm Trends
Two interesting comments on the issue of rising law firm rates caught my eye this morning.
These items are from an article in The Legal Intelligencer about increases in key financial indicators at the Dechert law firm.
In the excerpts, “Smith” is Lisa R. Smith of consulting firm Hildebrandt International, and “Levin” is Alisa F. Levin of Greene Levin Snyder Legal Search Group in New York.
Here they are:
– Smith said that in talking to law firm clients, rates are only a part of the equation. For the sophisticated clients who are bringing in the high-end work, it is understood that the end result and the approach to handling the case in terms of staffing and use of technology are ultimately going to have a big effect on the overall cost.
– Levin said that if firms want to stay competitive in the New York market particularly, they will have to pay competitively and that may mean rate increases.
I think both of these are earnest reactions to a reporter’s questions about rising billing rates. I also think both are a bit of wishful thinking.
As the article notes, one Dechert client, Wyeth, may be concerned about rate increases that allegedly approach 20%. Technology and staffing alone will not make up for that sort of increase. I can guarantee that the Wyeth outside legal budget did not increase 20% from 2006 to 2007.
Then there is the oft-cited justification of rate increases as needed to fund the war for talent, particularly in New York. If this is true, and already high New York rates are going higher, then New York firms are going to price themselves out of all but the highest margin work. Put another way, is there really enough private equity, M&A and white collar defense work to go around? Mr. Spitzer is now governor, after all.
Law firms should charge whatever their services are worth. Many apparently charge whatever they can get. In the short run, all is fine, and the financial metrics show a nice positive pop.
But the long tail on rising firm rates is yet to be felt by many firms. Most clients have many options when it comes to legal counsel for all but the most unique of matters.
Just because a client is paying the new rates doesn’t mean it isn’t looking at alternatives.
As they say in the jungle: “It’s quiet. Too quiet.”
Apple’s New GC: What Honeymoon?
January 23, 2007 | Filed Under Investigations, Managing, Governance
The first 100 days of a new GC’s tenure is typically a period marked by a fresh start, a bit of a honeymoon to get settled in, and optimism about the future.
Apple announced the appointment of Donald Rosenberg last November. Late December featured the completion of a report by a special committee of the board regarding past stock option practices.
Last week, fresh off the announcement of the iPhone, Apple CEO Steven Jobs made another command performance. According to the San Francisco Chronicle, Mr. Jobs appeared (with lawyers in tow) at federal offices to talk with DOJ and SEC investigators about past stock option practices.
Quite a first 60 days for Mr. Rosenberg, given the part of the alleged focus of the government investigation: the Apple legal department. No doubt the last 40 days of Mr. Rosenberg’s fresh start will require a lot of hard work and demand no small amount of leadership.
No sign yet that changes at the US Attorney’s office in San Francisco detailed by The Recorder are slowing down the government’s investigation.
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