Effective Partnering Between Law Firms and Clients
New approaches can help corporate legal departments fend off new challenges.
Corporate legal departments continue to face increasing pressure to reduce costs, be more efficient, and obtain more value from outside counsel. Historically, the common corporate solution to such pressures was simply to seek lower hourly rates or deeper volume discounts from firms. In recent years, corporate counsel have started applying additional approaches to reach their goals, including:
• Expanded implementation of convergence counsel or preferred counsel initiatives through competitive RFP processes.
• Widespread adoption of fee arrangements not tied exclusively to the billable hour, including fixed fees, contingency fees, and performance-based fees.
• Outsourcing of tasks to lower cost providers (e.g., document review, legal research, etc.).
• Increased focus on project management and process im-provement strategies.
Law firms have also started taking a more proactive approach to partnering with clients to reach mutually beneficial goals. This article discusses some of those approaches and how clients and law firms are now working closer than ever to achieve common objectives.
In-House Counsel: Setting the Tone
“Doing more with less” is a familiar mantra among in-house attorneys. Recent headcount reductions have increased the overall workload and stress of most in-house counsel. In-house lawyers no longer have the time or luxury to work with several law firms on similar-type matters. As a result, many corporations now recognize the need for a small group of trusted law firms (i.e., convergence or preferred counsel) with whom they can form close partnerships.
Partnerships come in many shapes and sizes. Law firms bear much of the burden for developing successful partnerships; however, in-house counsel can often elevate these partnerships to the next level by creating and emphasizing a collaborative atmosphere for all law firms representing their interests.
In-house counsel can also promote partnering by continually communicating the company’s strategic direction, risk tolerance, and best practices. Law firms also appreciate in-house attorneys sharing personal performance goals and objectives. Understanding these goals allows law firms to find opportunities for in-house lawyers to develop a particular skill set, achieve a specific business objective, or simply point out positive results to superiors.
Partnering with law firms on process improvement training and initiatives is another good way to develop trust and an understanding of each firm’s pressure points. As an example, our firm is currently partnering with a major software company client on one such initiative involving the patent application process. Through the use of Lean Six Sigma and Change Management techniques, we are working with the client to develop creative solutions designed to reduce cost and shorten the application process. Even though we are very early in the process, both groups have already eliminated several non-value added tasks identified during a process mapping exercise.
Conducting regular law firm performance feedback sessions also helps to minimize any lingering financial or staffing concerns. The overarching goal of partnering is to create a proactive, not reactive, approach to legal functions.
The Firm—Matter Management
As the old saying goes, “you can either be part of the problem or part of the solution.” Law firms have responded to pressure from clients by beefing up internal resources and processes.
Teams of non-lawyer professionals are now used in various project-management roles, including analyzing and developing fee proposals, tracking progress against budget, evaluating and implementing cutting-edge technology, and rolling out process- improvement initiatives. These functions were not widely adopted by law firms as recently as a decade ago. They are now a necessity. And much like their corporate counterparts, law firms now focus on internal/external metrics and industry benchmarking.
All of these efforts have had a significant impact on matter management. Specifically, law firms find themselves asking more questions at the outset of a matter, such as: Should we conduct a detailed Early Case Assessment (ECA)? What is our staffing plan? What is our budget? What is the total exposure? What are the risks? What are the client’s objectives? Can we resolve the matter early?
Thus, clients and law firms alike see greater transparency and teamwork by using project-management principles.
The Bottom Line
Successful firms will remain competitive by developing creative, practical, and cost-effective solutions for clients. Increasing economic and legal pressures will continue to require trusting relationships and greater partnering between law departments and outside counsel.
The end goal is a collaborative, proactive effort focused on teamwork, organizational effectiveness, continuous process improvement—and results.
Scott Sayler is a partner at the Kansas City law firm of Shook Hardy & Bacon.
P | 816.559.2220
E | ssayler@shb.com
Matt Bohnen is director of administration for the Pharmaceutical and Medical Device Practice at Shook Hardy & Bacon.
P | 816.474.6550
E | mbohnen@shb.com
Return to Ingram's January 2011