Law People : Law Practice Management, Organizational and Personal Dynamics; Talent Management : Ronda Muir of Law People Management, Inc.

In an effort to profit from the demand for more cost-effective legal services, law firms are considering offering a broader range of services themselves and/or entering into collaborative endeavors with other organizations--law firms, legal providers or non-lawyers, in some cases even servicing other law firms.

For example, some firms are entering the market for unbundled, separately-priced litigation support services by adding specific expertise and staff as an adjunct to the firm's existing practice.  Other firms have done so through a wholly-owned vehicle. King & Spalding does document review and other litigation prep work not only for its own clients but for other firms' clients as well by a separate team that is also hired and housed separately (although still in Atlanta).  Baker & MacKenzie has a wholly-owned subsidiary entirely separate from the firm's practice that does litigation prep and management . Taylor Wessing has created an affiliated but separately-staffed corporate services business in its Cambridge location that offers clients, including other law firms, lower-cost options for standardized legal work, such as corporate due diligence. And Eversheds announced this past week the launch of its in-house consulting business specializing in legal department management.

Groups of firms are also working together to efficiently service specific practice areas, industries or clients. LegalOnRamp, built on that principle, is probably the largest town square meeting of lawyers available on-line.  Some firms are banding together independently to accomplish a comparable result.  For example, there is a Banking Legal Technology Group composed of five law firms that provide industry-related  on-line elearning, document templates and document assistance.  

This approach can be counter-intuitive--in a competitive marketplace it feels like fraternizing with the enemy. But that is what GCs will want--and will benefit from. The relinquishment of pride of exclusive ownership required by these kinds of arrangements is made in exchange for work from clients who want the considered viewpoints and resources of a diverse group. And, frankly, a better product.

Collaborations with outside outsourcers, litigation management firms, and paralegal resources also require a relinquishment of at least part of the profit margins a firm might have historically realized on that work, but with the anticipated result of a happier, more efficiently served client and usually without the costs required to house, feed and manage those troops.

How to move from the traditional business model to one that embraces some of these new approaches?  Christensen, in his seminal Harvard Business Review article, "Meeting the Challenge of Disruptive Change," suggests essentially running two businesses at once: one with the old business model (which is usually still viable while disruptive change is emerging in a marketplace) and one with the new business model.

As an example, one of the more innovative new firms is Axiom, which places lawyers in law departments to perform high level work, not as a placement service or temp agency but as a provider of legal services not saddled with the infrastructure of a large firm. With the firm's 100% utilization model (attorneys are only paid when they are engaged) and minimal overhead,  Axiom's clients can realize significant cost savings over traditional legal services.  Evidently without any knowledge of Axiom's business, Berwin Leighton Paisner (BLP), a London-based firm, essentially took Christensen's advice by piloting under the BLP umbrella a new business, Lawyers on Demand, which is very much like the U.S.-based Axiom. 

The founders of this new service, also partners in BLP, acknowledged their initial concern about eroding the firm's traditional business, but decided that "even if it does start taking work from traditional BLP, we can’t bury our head in the sand. If we don’t do that work, someone else will."

That may be the ultimate justification for exploring new services and various ways of offering them.

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Over the last few weeks, GCs have used the opportunity to speak out from lecterns at various  events about what they expect from their outside lawyers.  Here's a short collection with more to come.

Diversity

"No corporate law department ever hired or fired an outside firm because of their diversity despite all the noise about corporate diversity objectives."  Or so one pundit out there contends. 

At a recent NAWL conference, Walmart's Associate General Counsel Kerry Kotouc gave a name and face to the retort to that contention.  Walmart's legal department asks candidates for outside counsel extensive questions about diversity in their firms and on their proposed Walmart teams, according to Kotouc. 

More importantly, the department also looks into the underlying truth behind the answers.  Are these diverse lawyers only showing up at pitches and on team lists or are they really an important laboring oar on Walmart's matters? 

In particular, Walmart wants to know that their lead lawyer is the one getting compensation credit for their role--origination credit or relationship credit, as appropriate, says Kotouc.  Which has resulted in some frank discussions with firm managers about firm compensation structure generally and who is getting what when it comes to compensation with respect to Walmart's matters specifically. 

Bottom line, Kotouc assures us that Walmart has hired or fired a number of firms based on that diversity information.

Compatibility

Sabine Chalmers, Chief Legal and Corporate Affairs Officer at AB InBev, the largest global brewer and one of the world’s top 5 consumer product companies, pleaded with outside counsel this past week to do something they might not have heard before:  choose lawyers for her matters who are compatible with her inhouse team. 

Of course, to do that, firms must know the client well-- its business, culture and even the individual lawyers working there. Chalmers is already more than annoyed when outside candidates or even engaged counsel order Coors instead of Bud, or Coke instead of Pepsi. But of course knowing your client goes further than knowing its products--Chalmers wants firms to understand the tone and style and objectives of the legal departments AND individual lawyers well enough to identify compatible outside lawyers to work with them. 

Lest this seem an odd or ultimately irrelevant request, note that BTI found in a not-too-distant survey that personality issues were one of the top 4 reasons cited by inhouse counsel for firing outside counsel.

The initial obstacle in doing what Ms. Chalmers wants is that we lawyers aren't always so good at assessing our own or others' personal styles.  Additionally, we aren't always so great at the old-fashioned relationship building skills that should ensue. 

How to identify differences in style? While there is no hard data, there is good evidence that many lawyers who leave law firm practice to go in-house are doing so at least in part because they are uncomfortable with their current law firm culture.  So in-housers as a general matter may in fact have a different style or prefer a different culture than their out-house brethren, particularly those at the firms they came from. Some inquiry as to the inside counsel's professional history might be a place to start. 

What Ms. Chalmers hopefully didn't intend to request is that outside and inside lawyers' personal styles be the same. There is always an advantage for working groups to include different strengths and approaches.  In this case, seeing both the big picture and the practical details, attending to both risk awareness and support for innovation, and a myriad other complimentary strengths are necessary to forge the best strategy. It would be a mistake to stack teams too heavily on one approach in an effort to reach compatibility.  

But even if teams have this "substantive" balance, the devil is often in the interpersonal styles that may keep those strategies from being effectively implemented--such as competitiveness, defensiveness, non-responsiveness and other communication problems, and dominance. The shorthand in the corporate counsel world for these tendancies in outside counsel is "arrogance."

The Scope and Purpose of Assignments

Marty Candiello, formerly General Counsel at Sunoco Chemicals, also emphasizes the importance of outside counsel really knowing their client--such as knowing the stock price, since the legal spend figures directly into shareholder value.  Knowing what kind of answer she expects to an assignment and what resources to throw at that answer is another priority for Candiello's outside counsel.  Candiello became known as "the 80% lady" because in many cases she wanted only the answer likely to be 80% right, to be achieved without throwing all the troops at the issue.

And if you're up for physical mutilation in the name of client service, Jeff Carr, Vice President, General Counsel & Secretary at FMC Technologies, suggests that outside counsel cut off one of those hands--"Don't give me on the one hand, on the other hand, just give me the bottom line advice."

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