Outsourcing In-House Lawyers
March 31, 2010 | Filed Under In-House Trends, New Services
A trend or a tactic?
Legal Week reports on a potential deal between Thames Water and UK law firm Berwin Leighton Paisner to transfer a significant portion of the former’s in-house legal department to the firm. (The Lawyer has more here).
BLP has formed a managed services group that is focusing on this option. A BLP partner, John Bennett, sees this as a big deal:
“This is a paradigm shift for the legal sector. The project itself is very exciting and a win-win-win situation. The client gets guaranteed performance standards, reduced legal costs, budget certainty and greater focus on its core business. There are also significant benefits for the general counsel and in-house team, as well as for BLP.”
(BLP is apparently seeking talent for this group here).
Legal industry veterans will experience a bit of deja vu, and recall a full-on outsourcing of Continental Bank’s law department to the Mayer Brown firm about 20 years ago. That deal had some one-off attributes and certainly didn’t start a trend (I think the Continental Bank GC became a partner of Mayer Brown, for example).
In this case, 13 out of 20 attorneys at Thames Water would go to BLP. One of the seven remaining lawyers includes GC Joel Hanson, and the sense is this frees him up (and the others staying) to focus on higher-value, strategic counsel.
The Thames Water/BLP arrangement could go from an outlier to a pacesetter. But you really need to understand the staffing model of the law department (and a roughly how it benchmarks headcount-wise against the competition). Also, the business dynamics of the corporate client may require it to consider this approach across other shared services such as finance, HR and IT. This sort of deal has been done with IT groups for years.
Kudos to Thames Water and BLP for exploring different ways to deliver legal services. It’s a reminder that some of time spent focusing on alternative fee arrangements can be used to pull back a bit so the bigger picture can be taken in.
David Boies: ESQ Meets TMZ
March 29, 2010 | Filed Under In the News
David Boies shows that he is equally at home outside Dodgers Stadium as he is inside the courtroom. Mr. Boies is representing Jamie McCourt in her divorce proceedings with Los Angeles Dodgers owner/husband Frank McCourt.
They didn’t teach this in law school; nice jacket on Mr. Boies (as always); click on the picture to go to the video.
Watching Mr. Boies do a mini-deposition of a security guard is priceless.
Social Media: Another In-House Risk Gateway
March 26, 2010 | Filed Under Risk, Technology
The enterprise use of social media is gaining more traction.
But with any new corporate trend typically comes added work for in-house counsel. One sign is the inevitable legal conference on the subject, software to help you control it, and when you see that insurers are starting to focus on it.
One of the fun things for in-house counsel is to learn new things fast enough to understand them and act to protect the client. One of the realities for in-house counsel is that there is no way to put many social networking technologies (blogs, Twitter, Facebook, LinkedIn) through normal corporate approval channels. Companies are walking a tightrope: they are encouraging employees to “get the word out” while not being able to control it.
Companies are developing policies on the subject, but the challenge is that most social media is a hybrid: part personal, part professional. Should companies undertake to educate employees about the general features and risks of social media? What if they do and it falls short?
One example: I see corporate employees posting about their attendance at industry conferences; this obviously renders public information what was traditionally far more private. Are there consequences if they were encouraged to publicize their attendance?
There are articles like this (10 Things You Should Know About Safer Social Networking) percolating around the web. It’s getting more important because new apps and features of current ones are all about location.
Lawyers can’t be Luddites these days and be effective or relevant. It’s just that it’s getting harder to know what is going on, what it means, and what to do about it.
In the meantime, perhaps a start is to issue one of these to all employees traveling on company business…
Law Firms: Beware the Middle Market
March 23, 2010 | Filed Under Pricing, Change
Trying to be all things to every client may result in being few things to none.
Last week, I wrote in Why Value is not a Virus that I thought corporate legal work would diverge into lower-end, more commodity-like work and higher-end, larger risk/reward work. Both would be priced accordingly. There were some great responses, that I note in an update at the end.
Three observations follow for me:
1. Any size firm can work profitably in either market.
2. Since costs are crucial (particularly at the low end), few firms will be able to properly bundle lower- and higher-value work.
3. All firms will have to be experts in managing projects, collaboration and using technology and newer service providers.
So when I try to step away from the legal reading, something seems to pull me back in. This time, it’s an article by James Surowiecki in the New Yorker. He focuses on companies like Apple and Acer that price products either at the premium end or the low end:
These two strategies may look completely different, but they have one crucial thing in common: they don’t target the amorphous blob of consumers who make up the middle of the market. Paradoxically, ignoring these people has turned out to be a great way of getting lots of customers, because, in many businesses, high- and low-end producers are taking more and more of the market.
For my argument, “middle market” doesn’t mean the size of the client. It means the approach toward the market. Then Mr. Surowiecki brings up what is really different now:
The boom in information for consumers has also severely weakened middle-market firms. In the past, these companies were able to charge a premium price because their brands were taken as signals of reasonable quality and reliability.
For some law firms without a focused strategy, the middle market may become the muddle market.
This is why things like the ACC Value Challenge and other legal rating or cost/service information is so important. It is why the state of the economy is not what is driving change. As researchers like to say, it is a correlation but not the cause. The cause is the global competition that clients are facing. This cause was there before the downturn, it is here now, and it will accelerate change even faster when economic activity rebounds.
Since so much is happening right now, and much of it doesn’t fit in this space, I set up lawriver late last year. It’s just a simple site that’s easy to check from your desktop or mobile.
What Law Firms Can Learn From Pizza
March 19, 2010 | Filed Under Law Firm Marketing, Selling the GC
Not too far from my company is the international HQ of Domino’s Pizza. Just on the outskirts of Ann Arbor, Michigan, Domino’s occupies a large, low-slung Frank Lloyd Wright inspired corporate campus.
Recently, Domino’s did something quite revolutionary: it asked customers what they thought about their pizza, and then publicized the results (the most brutal stuff is in the first 90 seconds):
Domino’s CEO Patrick Doyle distills it down to two sentences in today’s Detroit Free Press:
“It’s remarkable the campaign is getting as much attention as it is. All we’re doing is telling the truth about what our customers said and doing something about it,” he said.
It’s probably not totally coincidental that Domino’s share price has nearly doubled since the “Turnaround” campaigned started in November.
So do I expect law firms to run hidden-camera client focus groups and put the results up on YouTube? Um, no. (But it would be awesome, you have to admit; the essence of differentiation).
But a good start is getting some honest feedback from key clients (not easy), sharing it with them, and saying what you will do differently. Oh, and actually doing it.
What would your firm’s “crust tastes like cardboard” comment be?
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