Do GCs Want Change? A Rejoinder
June 20, 2008 | Filed Under New Services, Managing
My friend Bruce MacEwen swung for the bleachers this week with a herculean post in his Adam Smith, Esq. weblog.
Bruce takes a discussion from Legal OnRamp and puts it out there for all to see (his mention of Paul here refers to Paul Lippe, Legal OnRamp’s CEO). The subject is whether GCs really want change in the legal industry, and Bruce bravely answers “no”:
But I actually have a more subversive suggestion, which falls under “E. Other” in Paul’s schema: I don’t believe GC’s really want things to change, for all their trashmouth game talk. GC’s want their backsides protected by the imprimatur of the Magic Circle, the New York Elite, or the Skadden/Latham brand name. GC’s don’t want “good enough” quality; they want top-drawer quality.
It sure beats your run-of-the-mill “recent developments in trover and replevin” blog post.
I actually agree with Bruce on one level. GCs don’t want things to change. Who does? Change is hard to face and harder still to make work.
Where we part ways is over the conclusion that many GCs use top-tier New York and London firms on major deals and litigation because they don’t want change. It could just be the right tool for the job. And I really disagree about saying this is an exercise in CYA. GCs I know don’t think that way. (Maybe I’m just a hayseed from the Heartland…)
For most GCs, major deals and litigation are a minor part of their budgets, smoothed out over X number of years. In the rest of the spending, I actually see more signs of change, and a desire to change, than ever before.
Any one general counsel can turn a back on change. It may work for awhile, but over the long run, there’s a name for the person who will force the issue. Your CEO? Perhaps. Your CFO? More likely.
Most likely: Your successor.
You really owe it to yourself to pour a glass of cabernet and read through Bruce’s entire post. It’s excellent.
How general counsel can navigate change is a subject that I have been spending a lot of time on recently. I’ve mentioned two projects it in my Wired GC — Select newsletter in the last few months, and I’ll touch on both here shortly.
One thing we can agree on: for the legal market, change makes glaciers look fast. You better stand back at the right moment, however…
Tyco and Eversheds: in Depth (Part II)
May 29, 2008 | Filed Under Law 2.0, New Services
Today, some of my perspectives on the revised Tyco/Eversheds legal services agreement, arising out of a discussion with some of the firms’ principals. Part I is here.
Here we go:
– if firms want to wait until a proposal like this is perfect before doing it, it is never going to happen.
– there clearly is an importance of trust between firm and client before venturing off like this. No agreement, however well conceived and drafted, can foresee all issues that will come up.
– the advantage a first mover like Eversheds gets from this is that after they the sign up Tyco to version 2.0, they are already working on 3.0. Other firms are probably still discussing alternative billing in the abstract. How do you ever catch up?
– if a firm like Eversheds can integrate other smaller and more geographically focused firms on a project basis with technology and consistency, does the law firm of the future need to be in all places at all times? Do mergers or expansions therefore become more targeted and strategic? Note that Eversheds has no offices in North America.
– An arrangement with some of the key attributes of Tyco/Eversheds provides a level of commercial understanding for firm lawyers that is difficult to duplicate otherwise. It also provides these same lawyers with closer client contact that other firms either don’t get or are unwilling to share deep into the service team.
– There is a consistency and quality of service that is an essential part of the DNA of an arrangement like this.
– More firms may have to consider incentives related to preventing disputes if they want to be entrusted with ongoing litigation assignments.
I appreciate the time taken by Stephen Hopkins, Diana Newcombe and Martin Hopkins of Eversheds to talk about the evolving Tyco relationship. I expect more corporate clients to try out some parts of this approach if they want to improve legal services delivery in a way that can be quantified and incentivized.
Tyco and Eversheds: in Depth (Part I)
May 27, 2008 | Filed Under Law 2.0, New Services
I talked with Stephen Hopkins and Diana Newcombe of Eversheds last week; they are two leaders for the firm on the Tyco legal services team (the new agreement’s details are here). Also participating was Martin Hopkins, who oversees Eversheds’ relationship management strategy and deployment for US-based clients.
Some of the major points follow here, I’ll give some of my perspectives Thusday.
Two things impressed me from the outset:
– The Big Picture: This process has been a real learning experience for the firm, and consistently drives home the importance of closely linking legal services and a client’s corporate goals. This is often talked about by law firms in the abstract, but is hard to quantify in practice.
– The Building Blocks: Tyco is certainly a custom-built arrangement, but components of it are finding favor with other clients. Indeed, the approach and the technology involved make it more “modular” than initially thought. A client can pick a few features to start with, and go from there.
A few other items of note:
– The Need for Speed: Getting the right technology in place, FAST, is key, one that facilitates client needs and the control of the arrangement. You can’t always know what it’s going to be like to get matters formerly handled by 250 + firms into a process now being overseen by one until you do it. Indeed, it seems without Eversheds’ Global Accounts Management System, this type of service model simply can’t work. And it’s not something you can go out and buy off the shelf.
– What Quality Really Is: Legal work is about many things: not just the product itself, but when it is delivered, how useful it is for the client, and of course, the cost. The system that tracks such things also gives the ability to measure. These can then be analyzed, forming the basis for an upgraded agreement, which refines the allocation of risks and rewards.
– Innovation Forces Change: The Tyco services agreement is changing how Eversheds is organized and presents itself to the market. The firm can’t help but re-evaluate how matters are staffed and work is sought, sourced, and serviced.
– Alignment is a Motivator: The Tyco experience has pushed people inside the firm (at all levels) to do something new that tangibly (and measurably) helps a client. Having a challenge that requires teamwork and has the interests of the firm and client aligned is invigorating for Eversheds’ lawyers and staff. It also helps extend and enhance diversity initiatives already under way.
– One Firm of Many: since Eversheds will retain other firms to help on matters in certain countries, it has forced a level of consistency and cost control across the EMEA region that is rare when such matters are traditionally “referred out.” Indeed, not all firms want to (or are able to) work with Eversheds this way. They payoff for some firms that agree to work with Eversheds on Tyco matters is a chance to work for a high-visibility international client that they might not have been able to land before.
– Less Work Can Lead to More Work: things like preventative law and litigation avoidance are clearly new opportunities for legal services that are often seen by many firms as putting sources of future work at risk. When incentives for these are combined with more traditional work, you are getting closer to win-win. From this newer perspective, the traditional billable hour model is more like pay-pay.
Part II comes your way on Thursday.
Tyco and Eversheds, version 2.0
May 19, 2008 | Filed Under Law 2.0, New Services
The best way to sustain a competitive edge is to improve on something that’s already innovative.
Tyco and Eversheds announced today an expansion and upgrade of their multi-jurisdiction legal services agreement. The initial agreement caught the attention of many in January 2007 when Tyco took work done by 250 law firms in many countries and entrusted it to one firm, Eversheds.
I covered the first version here, and did an update earlier this year.
The new deal finds Eversheds adding new work to the mix:
During the next phase, Eversheds will continue handling high-end Tyco work such as the recent multi-jurisdiction Ancon business divestiture and the major restructuring of Tyco businesses in Europe, the Middle East, and Africa (EMEA). Additionally it will bring new performance-based efficiencies to its regular commercial and compliance work.
There are some new wrinkles and Tyco-driven metrics as well:
Of equal significance, the new phase of the engagement provides Eversheds with substantial bonus incentives to meet pre-specified client satisfaction and diversity targets and achieve proactive litigation avoidance - in other words, promoting and encouraging behaviours that are counter-cultural at many traditional law firms.
Many lawyers aim for perfection and certainty, whether due to training or native disposition. What I find intriguing here is that Tyco and Eversheds are clearly learning on the go, working through issues that always arise when you are creating a template instead of copying one.
UK publication thelawyer.com has more.
Stay tuned, later this week I hope to bring forward some additional insights.
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…
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