Your Pad or Mine?
March 26, 2007 | Filed Under The Client Speaks, Law Firm Trends, Managing
Are the legal bills you get in the mail today what you are expecting?
According to UK’s The Lawyer, some GCs are growing increasingly concerned over law firm bills, and the size and contents thereof.
In a recent study by that publication, 69% of in-house counsel surveyed had some concerns about the padding of bills; the number rises to 73% when GCs alone are asked.
While there was no definition of “padding,” some participants said it may not be fraud, but more like a failure to scrutinize bills before sending them and what constitutes “good time” from other charges.
Here are some of the responses:
– “I’ve been billed for a conversation between colleagues. And I’m not paying for a junior to learn the ropes.”
– “There’s a lot of time on bills that gives general counsel the impression of padding because too much junior training and learning time is billed and not written off.”
– “Because of the pressure on partners to market, as well as to be legal advisers, they don’t often monitor the bills closely enough, so junior staff might be going off on wild goose chases that the client will be billed for.”
So while there is much talk of rising rates and starting salaries, the clients speak.
It will be interesting to see who is listening.
GE Brings Good Firms to Life
March 23, 2007 | Filed Under Legal Resources, Managing
Corporate Counsel details the latest eco-magination from GE on how it selects the roster of outside counsel it will use in its worldwide operations.
Under the so-called “Gen Two” regime, GE has backed away from such decision tools that it has used in Gen One (lilke a 20 page RFP and online auctions) to a shorter online RFP (saves paper!). This resulted in the herd of “preferred provider firms” being thinned from 140 to 108.
Other attributes of the new deal:
In addition to the changing lineup, GE also restructured the actual terms of the working arrangements. Under Gen Two, the firms must now propose alternative fee arrangements for every matter and offer a binding core team of attorneys to work on GE cases. The two-year contracts of Gen One were stretched to four years, and firms must renegotiate discounted rates halfway through the agreement.
Interestingly, one way the reductions apparently started was in the short-list of firms to get a Gen Two RFP. Those firms “that in-house lawyers gave the lowest ratings” to apparently didn’t get a password to the RFP site.
So the first lesson for law firms: don’t just be nice to the GC or managing counsel. That new staff attorney may have a long memory.
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:
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.
ACC CLO Survey: The Law Firm Reality
January 18, 2007 | Filed Under Law Firm Trends, Legal Resources, Managing
After a quick snapshot last week, here’s a closer look at the Association of Corporate Counsel’s 2006 Chief Legal Officer survey.
The press release accompanying the survey noted that 25% of CLOs planned to increase their use of law firms in 2007.
Sounds good; that’s why they pay rainmakers big bucks.
But on the flip side, 54% said they would not change the number of firms they use, while 15% said they would decrease their use of law firms. 32% of respondents said they fired a firm in 2006; 20% of those firms were characterized as having a “significant relationship” with the client.
These exit percentages show the measure of the challenge law firms face in growing top-line revenues without raising rates or increasing billable-hour targets.
The law firms chasing those 25% of companies who might want to add another firm to the mix may want to consider the top three reasons for giving law firms the boot:
1. Cost management
2. Mishandling matters
3. Lack of responsiveness
While managing partners have their eye on the prize of increasing the number of clients, it’s clear they need to work hard to keep current clients happy. Given these reasons for firing firms, here’s a memo to compensation committees: throw a few dollars to partners minding active client matters. Retention is the foundation for expansion.
Grist for the legal mill is not easy to find. Or to keep.
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