The Billable Hour on the Front Page
January 30, 2009 | Filed Under Value, Law Firm Trends
Today’s New York Times takes notice of lawyers on the clock.
Among an all-star cast of quotes (including Evan Chesler of Cravath and Scott Turow of Sonnenschein), we hear from Frederick Krebs, president of the Association of Corporate Counsel (ACC), talking about the Heller meltdown:
That collapse highlights the risk to law firms experimenting with other payment arrangements: If lawyers set too low a price, they lose money. Many lawyers may not be good enough businessmen to pick the right price, said Mr. Krebs, of the Association of Corporate Counsel.
“The difficulty is, we don’t really know what it costs us to do something,” he said. But the biggest stumbling block to alternative fee structures may be the managing partners at law firms, who will have to overhaul compensation structures to reward partners and associates for something other than taking a long time to do something.
“…we don’t really know what it costs us to do something…”
Now there’s a point to ponder.
Another thing becomes a bit more clear, something any GC or client partner intuitively knows:
>> There is much to the “billable hour” than billing by the hour.
Instead of continuing on today, we will examine three parts of the puzzle next week, in multi-media fashion:
1. Monday: a short video on what the deflationary environment can mean for law firms.
2. Wednesday: another Off the Meter seminar, this one with Susan Hackett, GC of the ACC, about their Value Challenge (see my post immediately below to register).
3. Friday: a short podcast on why the billable hour will always be with us, but why it will likely matter less.
In my first post of 2009, I said that I would forego talking about the billable hour for a while in the new year. I lasted 17 days. About the same duration as a few of my other resolutions…
Susan Hackett, ACC - Wired GC Seminar
January 28, 2009 | Filed Under Seminars
The Wired GC continues its seminar series, Wired GC-Off The Meter.
Our fourth seminar is entitled “Delivering Value is Not an Option”, and features Susan Hackett, SVP and general counsel of the Association of Corporate Counsel, and will be held on Wednesday, February 4, 2009 at 1:30 PM EST. ACC is the largest community of in-house counsel with over 25,000 members in 80 countries.
Susan will provide an update on ACC’s Value Challenge, which seeks to reconnect value to costs for legal services, and will talk about how both in-house and outside counsel can help better manage clients’ legal affairs.
The series available to the legal community without charge thanks to our exclusive sponsor, The Vallex Fund. This is not your typical web-based seminar: each every-other-month installment is fast-paced, insight-oriented, and short (less than 30 minutes).
Full details are on the dedicated series page; registration is quick, and allows you to attend the seminars live, or view them on-demand after. Also, when you confirm your subscription, you will get a copy of the series white paper: “Changing the Law: Metrics and Milestones.” It gives some hints as to future seminar topics as well.
Take 30 seconds to register; we have a virtual seat saved with your name on it.
Current subscribers to Wired GC -Select are already registered and have access to the series archives.
The End of One-Stop Shopping?
January 26, 2009 | Filed Under Law Firm Trends
There is a definite sense about the answer to this question when you read today’s article in the Wall Street Journal about the travails facing many large law firms.
Some of the background on the Heller Ehrman dissolution is particularly compelling.
Here’s a key point, quoting William Brennan of Altman Weil:
“The marketplace is so intensively competitive that when firms encounter financial difficulty, the best and brightest lawyers immediately say, ‘I don’t want to take a risk with my clients and my compensation,’ and they jump quickly to a less risky platform,” says Mr. Brennan, the consultant. “Within weeks a firm can go from having financial difficulty to having a run on the bank.”
So how much confidence does a GC have in a months-long RFP that will send a major part of business to a single firm?
Perhaps it will be like the banks: clients have to find the ones that are too big to fail.
And exactly where do you find such banks today?
So perhaps you look for a firm that is small enough to fly under the radar…
Three Themes for a New Year
January 13, 2009 | Filed Under Change
In 2009 I will move this weblog into a few new areas that will be important for corporate legal departments and the law firms that want to continue to serve them.
This means that the shopworn “Billable Hour Has to Go” will be given a rest for awhile.
So here are three for starters:
Facing Hard Choices
“Management has a hard time destroying parts of its business unless the alternative, obvious to everyone, is that there is no choice.”
– Clay Shirky
There’s No Turning Back
“We think it’s time to quit sticking our heads a bit in the sand [and] taking incremental steps . . . in the name of hoping that it comes back to the way it used to be in years gone by.”
–David Hunke
Tangible Beats Theoretical
“Create more value than you capture.”
– Tim O’Reilly
The first two quotations emerged from the turmoil that is roiling the modern newspaper. It may seem that there are no parallels to the legal industry. I think there are, and I’ll develop them later.
The third quotation is about newer web-based businesses, and Google is used as an example for their ad search business that allows keyword customers to calculate value on a near real-time basis. Again, what is the link to the legal industry? Here’s one for now: customers (and clients) are demanding more than a vague notion of “transparency;” they want to see clearly how expenditures are worth it on their own terms.
In challenging times it’s tempting to hunker down and try to ride out market storms; some companies almost crawl into a hole like a form of corporate hibernation.
So this year we will try to stay on the positive side of the ledger and give some ideas on how to emerge and face the day, not stand in the road waiting for those oncoming headlights.
(a recent visitor to the Wired GC HQ)
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