Managing Outside Counsel Survey - Part II
October 24, 2008 | Filed Under Cost Control, The Client Speaks
Here is a short follow-up to my previous post that covered the ACC/Serengeti study released this week.
All five items I highlighted are important. The one that caught my eye, however, was the part about less work going to outside firms (it’s at the top of page 4 of the press release). At first blush, you’d think this is merely work being brought in-house. But there may be more going on here. If inside resources are relatively flat (a high likelihood today), then in-house counsel are doing something. Among many possibilities, here are four that come to mind:
(a) pulling back on more generic work (redefine as low-risk and perhaps non-legal);
(b) trying to re-use or re-cycle some work, and have it done by non-legal personnel (including clients);
(c) using technology to automate or streamline work; or
(d) have it done by “non-law firm” firms, whether here or offshore (flat rate or fixed price).
Whatever the reason, perilous times does one thing: it focuses the mind.
While I will develop this observation a bit more down the road, its significance to me boils down to this:
Some work taken away from law firms isn’t coming back any time soon.
And if this is indeed a growing trend, it has profound implications for law firms and legal departments alike.
Managing Outside Counsel Survey
October 21, 2008 | Filed Under Cost Control, The Client Speaks
The Association of Corporate Counsel and Serengeti Law are using the occasion of ACC’s annual meeting to roll out the results from their 2008 “Managing Outside Counsel Survey.” The press release is here.
A few highlights today, and a couple of comments later this week.
Survey items that caught my eye:
1. 40% of outside counsel report terminating a law firm relationship.
2. Convergence appears to be slowing down.
3. Clients seem to prefer hourly rate discounts to alternative billing schemes.
4. Hourly rates are still increasing (bad news), but less work is going to outside counsel (reality check).
5. In-house counsel are using more purpose-built technology to monitor outside spending, but this is still in its early stages.
All these items are of interest; but I think one is more intriguing than the others. Guess which and see if you’re right on Thursday.
The American Lawyer has its own take here.
This had to be a discussion item at many of the receptions going on in Seattle nightspots this week. I wonder if any sponsoring firms have a sense of humor and are only serving light beer?
Quota Creep: Not This Time
October 3, 2008 | Filed Under Cost Control, The Client Speaks, Law Firm Trends
The weekly ABA newsletter tells us that some firms are looking at increasing billable hour quotas as a “strategy” to combat the looming recession.
It is rather anecdotal, but if even partially true, it won’t work, not this time. I can think of three reasons:
1. Clients are looking at cutting all expenditures, and outside legal costs are near the top of any GC’s (or CFO’s) hit-list.
2. When clients are cutting back on work and they hear the word “quota” they parse the underlying meaning with a concern: padding (or its variant, platinum-plating).
3. When work gets scarce at firms, partners who can tend to hoard, and partners and associates who can’t look for any file/matter number to slam an 0.3 here and there. Clients will be particularly watchful for new names on invoices.
The sole bright spot in this dark cloud: economic events may finally push in-house counsel to the point where they actually experiment more with alternate billing arrangements.
And that is called progress for clients, day-of-reckoning for many law firms, and opportunity for a few others.
Hating the Rating
August 20, 2008 | Filed Under The Client Speaks, Legal Resources
A recent dust-up involving anonymous online feedback may give some insight into future ratings for lawyers.
The website involved, TheFunded, purports to offer information on VC firms and deal terms from anonymous entrepreneurs, allegedly with experience. One recent feedback posting involved EDF Ventures. Rather than repeating it, there’s more on it here.
EDF didn’t like the posting and somehow thought it was advisable to subpoena TheFunded to discover the identity of the poster. One of EDF’s founders was quoted in this week’s Crain’s Detroit Business (scroll down) as saying:
With anonymous postings, you can either let something patently untrue just sit there, or you can try to find out who it is. We want to talk to them and set the record straight.
You can probably guess how this turned out. EDF has succeeded in one sense: putting a rather large exclamation point on the matter.
When we move from the VC shpere to the legal space, the case of TheFunded shows that online ratings and feedback have pitfalls for the raters and the rated.
The problem isn’t just that the feedback’s anonymous–that’s actually a cornerstone of most client surveys. It can be honest and constructive or vindictive and brutal.
Any feedback about lawyers that’s not anonymous will almost always be favorable, when you think about it. The queue to give a signed low public rating to a bellicose litigator will likely be a short one.
Lawyer rating site Avvo drew some fire when it started out; it has now emerged from beta and is scaling well, targeted more at consumers than the corporate counsel crowd. That latter market will do what it’s always done: rely on personal referrals when possible. Increasingly, however, the search may start by looking at a rating in a gated legal community or a recommendation in a lawyer-only network.
The other lesson: if you have the urge to “go after” something published online about your company, consult two lawyers: (a) one about how to do it, and (b) another about whether you should. And first make it clear to lawyer (b) that she won’t handle the matter.
Seems like overkill; probably cheap in the long run.
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.
Search
Powered By
Links
| ||||
 | ||||
| ||||
| ||||
|
||||
