Real-Time Associate Pricing?
April 1, 2008 | Filed Under Law Firm Trends
The Wired GC has learned that several money-center law firms are quietly exploring some creative ways to deal with excess associate capacity due to the economic slowdown. The first idea out of the chute: near real-time associate pricing.
Here’s what we have learned thusfar from one firm:
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>> The plan is to beta-test this approach with several key clients in a dedicated, secure extranet. The clients have signed NDAs, which the firms actually didn’t charge for.
>> Available associates will be organized by legal subject, with short, Facebook-like profiles. As for the mechanics, “think eBay for a young JD” one insider said. Auctions of associate time will start on the hour, and last 30 minutes or less.
>> The winning bidder gets the associate starting on the matter within 10 minutes (allowing the intrepid young barrister finish up any online Sudoku or Scrabulous and grab a cup of coffee).
>> If the work is estimated to take less than 12 hours, the associate must finish it that day (or night).
>> This firm also plans to leverage its global footprint by putting groups of 2-3 associates in separate timezones up for auction to allow urgent matters to be staffed 24/7 until project completion. Since these associates may actually get some sleep, the reserve price will be set lower.
>> Clients can bid by the hour, by the project, or, in some cases, by the result (such as for fixing CEO/GC traffic tickets).
>> In a bid to reduce costs and introduce some transparency into the process, this firm will require clients to pre-pay for the work, and then PayPal the associates on a daily basis.
>> Any shortfall in auction proceeds from an associate’s normal salary (and firm profit) will be taken out of the individual’s PTO bank. Beyond that, a second mortgage on associate residences is an option under active consideration.
“We’ve got some world-class subprime guys who are looking forward to getting back to work,” one firm explained.
Partner auctions are not on the table at this time, according to the source. That firm is also quietly seeking a carve-out for this program from the American Lawyer for its annual profits-per-partner rankings.
Law Firm Governance from the Inside Out
February 28, 2008 | Filed Under Law Firm Trends, Governance
Some firms are starting to recognize that a focus on the marketplace (i.e., client wants and needs) isn’t something that should be relegated to the time left over after a typical managing partner’s day. Especially when the days run long, with a demanding focus on things like hiring, compensation, development and mediating inevitable conflicts (both legal and personal).
Canada’s Financial Post notes that the Gowlings firm has adopted a rather novel way to ensure that client interests don’t get the short shrift.
It has split managing partner duties into internal and external groups, each of whom are on an executive committee with the firm CEO and COO. This committee then answers directly the firm board of trustees, akin to a corporate board of directors.
According to Scott Jolliffe, CEO of Gowlings:
The external-facing group is headed by Jane Steinberg and her committee consists of the leaders of the various practice groups and those in charge of marketing them, which is an added twist on the governance model.
“We’re making a statement to ourselves and the world that managing the external side of our business is just as important as managing the internal side of our business,” he says.
At first blush, this would appear to add to complexity, but there’s a method behind it:
While a second management group for the external side of the business arguably adds another layer of bureaucracy, Mr. Jolliffe stresses that it will allow the firm to better serve and respond to those who pay the bills. “I think it will distinguish us in the marketplace,” Mr. Jolliffe says. “It’s quite unique. We’re pretty enthused about it.”
The picture of large law firms is drawn in good measure by the focus of the legal press on sexy things like starting associate salaries and rising profits-per-partner. This can leave the the client feeling a bit left out. Or like the meat in the sandwich.
Anything that serves as a reminder of the reason there are law firms in the first place deserves at least two cheers.
Tyco + Eversheds = Sea Change
January 22, 2008 | Filed Under Law Firm Trends, Technology, New Services
An innovation is by definition notable. Revisiting it one year on can be very instructive.
Thelawyer.com has just such a review of Eversheds’ landmark deal last year with Tyco. I covered the initial announcement here, calling it “Convergence Like a Laser Beam.”
You’ll recall the jaw-dropping nature of the deal: Tyco replaced 175-200 law firms with one, Eversheds. Other clients such as Samsung and Azko Nobel have climbed aboard the E-train.
Fiona Smith, the GC of Severn Trent, another new all-in client of Eversheds, goes on the record:
“Eversheds impressed significantly in the selection process as a firm that would invest time and energy in getting to know our business and as a firm that would be committed to helping us all get the very best advice at a reasonable and transparent cost,” says Smith.
Part of Eversheds’ approach is using something most law firms talk about but few use well: technology applied smartly:
So what is the secret weapon that Eversheds uses to get general counsel salivating with its reasonable and transparent costs? According to Eversheds, it is that cornerstone of business - a computer software package.
The program, dubbed the ‘Global Account Management System’, or Gams as it is known affectionately at Eversheds, is the centrepiece of the firm’s tenders.
Gams (not the most gender-neutral moniker, by the way…) allows clients like Tyco to approve work on a case or transaction before work begins. And that is sweet music to any GC or managing counsel who opens a monthly statement and sees a new matter, running into five figures, that is news to them.
Explains Eversheds energy chief Stephen Hopkins:
“No work on any case or transaction for Tyco can start without its approval,” says Hopkins. “If Tyco hasn’t approved it and we just go ahead anyway, we will not get paid.”
Some firms are no doubt looking at 2008 with trepidation. A few may think that the answer is raising rates or pushing fee-earner utilization (i.e., hours billed) higher.
What Tyco-Eversheds shows is that such firms are not facing squarely what is going on in the global corporate legal services market.
Wake up and take a deep breath…
Better Client Relationships
January 11, 2008 | Filed Under The Client Speaks, Law Firm Trends
What law firm didn’t make this a resolution for 2008?
The business intelligence experts at IOMA are hosting an audio conference next Thursday, January 17, 2008 at 2:00 pm EST entitled “Maximize Firm Profits by Improving Client Relationships” (emphasis added). More information, including registration details, is available here.
I will be sharing the virtual platform with Peter Sullivan, a partner at Hughes Hubbard and Reed. We’re planning a timely and lively take on what law firm clients want, and what to do about it. There will be plenty of time for Q&A as well, so this will be interactive and (hopefully) interesting.
Give the program agenda a look; we’d welcome your participation.
See the Lawyer, Be the Lawyer
September 28, 2007 | Filed Under Law Firm Trends, Selling the GC
The New York Times today takes a peek at the nascent field of law firm videos.
Most are targeted at associate recruitment, such as these from Choate, Hall and Stewart. The YouTube-type format is rather arresting, although the two partners to the left of the videos seem a bit uncomfortable as they float in red space.
More intriguing is the experiment of the Quinn Emanuel, which wanted to go further:
The firm started a Web site, which, among other things, was to feature “A Day in the Life of an Associate.”
The video told the story of Ivey, a young brunette, who is first seen as she develops photos in her darkroom and plays Ultimate Frisbee. Ivey (really an actress) says she has a B.A. from Yale and a J.D. from Stanford, and is seen wearing a form-fitting jersey shirt, blue jeans and chunky necklaces as she consults with the partners.
But when the Web site went live last week, the video did not appear.
The “Work at Quinn Emanuel” page of their web site says the video is “coming soon.” Maybe the original will find its way to the web.
I’d love to have heard the marketing pitch that resulted in a reality-type video for a law firm being shot using an actress.
I think video is going to be much more common on law firm web sites in the future. But if the process is directed solely by marketers, law firms will miss some of the real impact that this personalization of their practice could make.
Gibson Dunn has taken a different and more direct approach with six videos directed at diversity. I find more it much more effective.
What would be real news is when a law firm shoots and places on their web site a video that shows what “A Day in the Life of an Associate” is really like.
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