Amorphous Support Services
January 30, 2008 | Filed Under The Client Speaks, Legal Resources
Sometimes outside counsel ask me why so many GCs seem preoccupied with costs. What about results? What about the best in legal services? What about covering your @ss?
Well, I submit as Exhibit A an opinion piece in the Financial Times by Luke Johnson, chairman of UK’s Channel 4 and founder of Risk Capital Partners, a private equity firm.
Mr. Johnson’s article is entitled “The truth about the HR department,” and at first blush it appears as yet another screed against the intrepid souls in HR:
The brilliant Avis boss Robert Townsend in his book Up the Organisation suggests firing the entire personnel department. Indeed, I have radically downsized HR in several companies I have run, and business has gone all the better for it.
But before in-house counsel can get complacent, Mr. Johnson expands his field of view:
HR is like many parts of modern businesses: a simple expense, and a burden on the backs of the productive workers. Other divisions that can become the enemy include IT, legal and marketing. They don’t sell or produce: they consume. They are the amorphous support services.
Ouch.
To complete the connect-the-dots exercise on operating-related legal services: to someone with Mr. Johnson’s DNA, if you are retained by one of the “amorphous support services,” guess what you are by association?
So if your friendly neighborhood GC seems like a one-note-band on costs (and trying to master another note, demonstrating value), try to be a little understanding. Mr. Johnson may be the CEO in the office down the hall. And he just called that very GC into his office after reading the revised forecast for outside services.
The Key 3 from Colin Powell
January 18, 2008 | Filed Under The Client Speaks, General
The New Yorker has an article this week about Mike McConnell, the current director of National Intelligence.
When writer Lawrence Wright is recounting Mr. McConnell’s experience in the 1990s as an aide to the Joint Chiefs of Staff, he describes a notable encounter with then-chairman General Colin Powell. Mr. McConnell was briefing the general on developments in the first Iraq war, and fell short with some answers.
Expecting to be upbraided, Mr. McConnell was surprised when General Powell was not troubled by the words “I don’t know,” and responded instead with his rules for an intelligence agent:
Tell me what you know, then tell me what you don’t know, and only then can you tell me what you think. Always keep those three separated.
Since legal counsel are agents of intelligence, I found this worth writing down.
(No mention whether Mr. Powell was still employing these three rules when being briefed in advance of his later testimony before the United Nations.)
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.
The Client Survey Says…
September 26, 2007 | Filed Under The Client Speaks, Selling the GC
The customer may not always be right. But she is still the customer.
This is clear from the recent Chief Legal Officer Survey from Altman Weil and Lexis Nexis. Your humble correspondent was recently interviewed about this survey in the latest issue of Legal Industry Insight, published by Lumen Legal. A reprint of the interview is available here.
The stark reality of the survey for me is on page 7, in the response to the question “What steps have outside counsel taken to improve the working relationship with your Law Department?” A full 40% said “None.”
My take on that in the interview:
“Firms and relationship partners need to have an ongoing dialogue with CLOs and key managing counsel. This provides a foundation for being proactive about finding solutions,” says John Wallbillich, founder and CEO of Lexvista Partners, a legal advisory firm. “Once you improve your communications with clients, bringing forward ideas to improve services or offering topical training to in-house counsel will distinguish a firm from the 40 percent who are doing nothing right away.
“I think there a lot of CLOs who would fall off their chairs if a law firm came to them with unsolicited cost-savings or best practice ideas.”
The point here is not the exact percentage. It is the perception that exists, in almost half of the CLOs surveyed, that law firms are essentially taking the client for granted.
Lumen Legal CEO David Galbenski is clearly one who gets this, and has been a first mover in providing options for firms to take a closer look at how they deliver services and consider unbundling some strategically:
“Law firms that do that get more business because they build trust with their client. They show that their firm is doing what is in the best interest of the corporation they represent. It will ultimately get them more work and lead to greater profitability, even though they initially ‘gave away’ some margin by bringing in contract help.”
In a time of record profits for many firms, it’s understandable to be wary of doing anything to stop the music. Sooner or later, I expect, many clients will start to change their tune.
Update (28 Sept 07): New Conde Nast magazine Portfolio also takes a kick at the can of outside counsel.
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.
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