{"id":105,"date":"2006-11-17T23:09:38","date_gmt":"2006-11-18T03:09:38","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/amy\/2006\/11\/17\/what-drives-corporate-counsel-in-their-re"},"modified":"2012-05-07T15:19:05","modified_gmt":"2012-05-07T19:19:05","slug":"what-drives-corporate-counsel-in-their-relationship-with-outside-co","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/amy\/2006\/11\/17\/what-drives-corporate-counsel-in-their-relationship-with-outside-co\/","title":{"rendered":"What Drives Corporate Counsel in Their Relationship with Outside Counsel?"},"content":{"rendered":"<ul>\n<li>Trust at a DNA level<\/li>\n<li>Matter management\/partnership<\/li>\n<li>Cost<\/li>\n<li>Fair and flexible billing<\/li>\n<li>No surprises\/Results<\/li>\n<li>Value<\/li>\n<\/ul>\n<p>That is my 10-second executive summary of <a href=\"http:\/\/www.lmanewengland.org\/2006annual\/thursday.asp\" target=\"_blank\">Understanding What Drives Corporate Counsel in Their Relationship with Outside Counsel<\/a>, the Legal Marketing Association &#8211; New England Chapter&#8217;s pre-conference event sponsored by LexisNexis Martindale-Hubbell, November 16 in Boston. The corporate counsel panel, moderated by John Lipsey of LexisNexis, included: Emily Dickinson (Hannaford Bros. Co.), Eric Cohen (Terex Corporation), Catherine Kortlandt (Praxair, Inc.), and Gregory Butler (Northeast Utilities).<\/p>\n<p>Like last year&#8217;s <a href=\"http:\/\/blogs.law.harvard.edu\/amy\/2005\/11\/19\/chief-legal-officers-speak\/\">Chief Legal Officers Speak<\/a>, it&#8217;s always great to hear directly from THE CLIENT. If you&#8217;ve got 10 minutes, then you can too. What follows is a rough transcript, slightly truncated and paraphrased in spots.<br \/>\n<strong><br \/>\nOn &#8220;partnering&#8221; with outside counsel \/ identification and selection<\/strong><\/p>\n<p>Greg: Competence\/experience is given, so let&#8217;s set that aside. Culturally, at a DNA level, do they understand what&#8217;s driving not just the company, but what&#8217;s driving the legal department. We&#8217;re looking for &#8220;true partners.&#8221; We have very established relationships with a shared history and shared DNA. I&#8217;m looking for a comfort level that they are going to fit that. As for a new firm? I try them out in a very small way. If they treat that job like it&#8217;s not very sexy, not a big deal, then I probably won&#8217;t do business with them again. I&#8217;m looking for attentiveness \u2014 even on a modest task.<\/p>\n<p>Emily: Similar. We work with a local regional firm that we&#8217;ve had for 25+ years. We use trial and error to try new firms and attorneys. We&#8217;re in the retail industry, so we deal with lots of acronyms. When I hire a new firm, I take them on store tours and show them our business. I can tell right away if they are going to meet my needs.<\/p>\n<p>Eric: Is the lawyer thinking about me beyond the billable hour? That gets to the DNA issue. Do they care about my business? Do you care about me?<\/p>\n<p><strong>On identifying new attorneys\/firms<\/strong><\/p>\n<p>Catherine: You look to Martindale-Hubbell, directories, who we&#8217;ve used in the past decade. After that it&#8217;s about response and are they telling me what I need to know. If an attorney came to me about A, but tell&#8217;s me I should know about B &#8212; that&#8217;s what I need.<\/p>\n<p>Eric: Do they stick with you when things get tough? Will counsel step up? Who&#8217;s standing behind you in the tough times?<\/p>\n<p>Gregory: I&#8217;ll tell you what&#8217;s a big turn-off. If I get the sense that the lawyer is inventing a problem only he or she can solve. I want to make sure you&#8217;re not creating the &#8220;tough times.&#8221;<\/p>\n<p>Emily: Never, ever underestimate word of mouth. If I hear from a colleague that a firm hasn&#8217;t stepped up or has created a problem, that&#8217;s all I have to hear.<\/p>\n<p><strong>On capabilities<\/strong><\/p>\n<p>Emily: If I&#8217;m looking for local counsel, I&#8217;m looking for different depth. It&#8217;s difficult to be all things to all people. So, I&#8217;m looking for local expertise. Would I like one law firm in all locations? Yes, but that is unrealistic. And it&#8217;s the difference between paying $600\/hr. verses $200\/hr.<\/p>\n<p>Eric: We hire lawyers not law firms \u2014 yes, but if we hire the right lawyer and he manages his firm correctly, then that reflects well on the firm.<\/p>\n<p>Greg: I have a mental Rolodex of &#8220;Oh My God!&#8221; lawyers that I can call. I&#8217;ve developed it over time. I have lawyers with whom I have a bond of trust, that as I have different needs, stays involved to make sure a matter gets handled (my engagement partner)&#8230; who stays involved without 30 to 40 hours of his time being billed to me.<\/p>\n<p>Eric: I ask for referrals \u2014 &#8220;If you were me&#8230; who would you hire?&#8221;<\/p>\n<p>Greg: The theme is Trust \u2014 I want to know this is a person I would trust my child to. It&#8217;s a dangerous world. I want someone who will say, &#8220;We&#8217;ve got some immigration lawyers here, but here&#8217;s who&#8217;s the best immigration lawyer in the city.&#8221;<\/p>\n<p>Emily: What Eric said \u2014 I want to hire the lawyer who will manage the issue.<\/p>\n<p><strong>On what differentiates between equals<\/strong><\/p>\n<p>Eric: It&#8217;s easy to eliminate &#8230; technology doesn&#8217;t come into it. An extranet isn&#8217;t going to make the difference. I don&#8217;t really care.<\/p>\n<p>Emily: Slick doesn&#8217;t do it.<\/p>\n<p>I recently was considering two lawyers. One had more experience with us, but I picked the other one because I felt confident that lawyer B and my CEO would get along better.<\/p>\n<p>Catherine: We are looking at cost. We do ask for a 10% discount with longer term relationships.<\/p>\n<p>Emily: If not a discount, at least be open minded about billing options.<\/p>\n<p>Eric: Some firms have a machine that spits out a bill and no one looks at it to see if it makes sense. Other firms look at the bill and say this is a little out of whack for what was done. Are they looking out for me? or are they looking at me as a cash box?<\/p>\n<p>Gregory: When all things are equal, and if this a large matter, if the firm is a bit more multidisciplinary, that is often better. One-stop shopping has some appeal.<\/p>\n<p><strong>On diversity as differentiator<\/strong><\/p>\n<p>Eric: Diversity is difficult. We don&#8217;t meet it yet internally, so we don&#8217;t impose it as a requirement.<\/p>\n<p>Greg: I do try to push our luxury law firms on this pretty hard. When I entered law school, we were the first class to be 50\/50 \u2014 men and women. So I don&#8217;t have a lot of patience with firms that can&#8217;t hire good women. Most of our firms get pushed on this. I push law firms because we hire our in-house attorneys from large firms who have trained the lawyers that we steal.<\/p>\n<p><strong>How to achieve preferred provider status<br \/>\n<\/strong><\/p>\n<p>Catherine: It&#8217;s an evolution.<\/p>\n<p>Gregory: I can tell you how not to do it. Don&#8217;t tell me about your firm economics. If you want to be my preferred provider, don&#8217;t tell me how much you have to pay your first year associates, but do understand what I need and help me get there.<\/p>\n<p>Emily: Here&#8217;s an example. I had to hire new counsel in geographic area that I previously have not had an issue. A firm came in and did a big dog and pony show their capabilities, but it wasn&#8217;t what I was looking for. Learn my business before you come and do a presentation.<\/p>\n<p>Eric: Firms come to see me and they haven&#8217;t even been to my web site, learned about our business, our management team, etc.<\/p>\n<p>Emily: The conflict issue \u2014 and in retail, site location is huge. Someone will come to me and say, &#8220;Oh, I worked with competitor X!&#8221; That&#8217;s a big problem for me. I don&#8217;t want to hear that.<\/p>\n<p>Eric: For me in my industry that&#8217;s not an issue.<\/p>\n<p>Catherine: The conflict issue is very important, we look to avoid potential conflicts of interest.<\/p>\n<p>Greg: The &#8220;trust&#8221; quotient should manage the sequence of how often your outside counsel has to come in and clear conflicts with you.<\/p>\n<p>Eric: Some firms will ask me to sign a contract to waive conflicts. I won&#8217;t do it.<\/p>\n<p>Greg: I wouldn&#8217;t hire the firm.<\/p>\n<p>Emily: An intangible is that outside and inside counsel need to have a meeting of the minds. Some inside counsel want to be copied on everything. Others do not. Don&#8217;t guess. Find out. Have a meeting at the outset on how to work together.<\/p>\n<p>Greg: I tell new law firms &#8220;Not all hours are equal.&#8221; Some are more equal than others. Be cognizant of what you&#8217;ve doing and how much time your spending on a matter. It may take a Chevy, not a Mercedes.<\/p>\n<p><strong>On bringing new firm up to speed<br \/>\n<\/strong><br \/>\nEmily: I want to know how does the law firm integrate junior lawyers? and is it OK with me? I don&#8217;t want a bill to show up with 7 sets of initials of persons I haven&#8217;t met. Another peeve I have are internal conferences \u2014 Sally met with Joe 1\/2 hour, Joe met with Bill 1\/2 hour, Bill met with Sally 1\/2 hour. It&#8217;s very annoying.<\/p>\n<p>Greg: We work with 40 firms. 70% of our work is with 3 firms. We meet with the big firms and set expectations.<\/p>\n<p><strong>On alternative billing situations<\/strong><\/p>\n<p>Emily: We use an alternative billing method. We wanted to reduce fees and to give 80% of our work to one firm. We worked together with the firm to carve out a budget \u2014 $X a year. If you come in under budget, you get 50% of savings, if you go over budget, you only get 50 cents on the dollar.<\/p>\n<p>Eric: Predictability is the key. We use an &#8220;In the Bank&#8221; concept. We pay 50% and the other half goes into the bank and depending on outcome, they get all or part of the bank. I don&#8217;t love flat-fee billing.<\/p>\n<p>Greg: We use the bank concept; we call it Success Fees. We sit down, do a budget, set outcomes, and it comes down to trust. And throughout the year, we sit down and say, &#8220;How are we doing? We set the expectations. It works very well for us. There&#8217;s no surprises.<\/p>\n<p>Eric: The majority of all matters, though for all of us, remains hourly billing.<\/p>\n<p><strong>On outsourcing large document litigation<\/strong><\/p>\n<p>Eric: We&#8217;re not there yet.<\/p>\n<p>Emily: We outsource IT to India, but I&#8217;m not outsourcing legal to India. But if I had a massive litigation case, would I look at it? Maybe.<\/p>\n<p>Greg: No, but we did have a huge case where we hired a bunch of law school students.<\/p>\n<p>Catherine: We&#8217;ve done it to a smaller firm, but not to India.<\/p>\n<p><strong>On e-discovery<\/strong><\/p>\n<p>[Consensus]: &#8220;A nightmare&#8221; We&#8217;ll be looking to outside counsel to help us on that.<\/p>\n<p><strong>On response to RFPs<\/strong><\/p>\n<p>Greg: We don&#8217;t do it a lot. The best ones are not boilerplate, but someone took the time do it well and customize it &#8212; they looked at what we really wanted to do. We once had a firm, who offered us a discount if they could forego the response to RFP.<\/p>\n<p><strong>On evaluating the relationship<\/strong><\/p>\n<p>Emily: My best gauge, other than am I happy?, are my internal business clients \u2014 are they happy? If they are pleased with the work product, then I&#8217;m happy.<\/p>\n<p>Eric: Outcome is a big measure of performance and whether expectations are met. I want an honest assessment of expectations from the outset. I don&#8217;t want to hear we don&#8217;t have a case, after we&#8217;ve sunk a ton of money into it and that we should settle for this amount &#8212; it&#8217;s a good offer!<\/p>\n<p>Emily: It&#8217;s a value equation. Did this lawyer or this law firm add value. Results count but cost comes into that. It&#8217;s a combination of result, client relationship and cost. The law firm needs to communicated with us on the cost issue. Law firms hate a budget and I appreciate that they don&#8217;t want to be locked in, but I&#8217;m in business, so I need a budget as a guide.<\/p>\n<p>Greg: Success is like the U.S. Supreme Court definition of pornography, &#8220;I know it when I see it.&#8221; Goes back to relationship\/trust issue.<\/p>\n<p>Emily: If you really want to score Brownie points, be the firm that initiates the review. I love it when a firm says we want to come in annually or semi-annually to sit down and ask how are we doing, review services and matters \u2014 and it&#8217;s not billed \u2014 and throw in lunch!<\/p>\n<p><strong>On third-party client surveys<\/strong><\/p>\n<p>Greg: It&#8217;s OK as long as it takes 10 minutes, and I&#8217;ll probably reschedule 10 times.<\/p>\n<p>Want more candid remarks from the GC perspective? See transcript from this same event last year \u2014 <strong><a href=\"http:\/\/blogs.law.harvard.edu\/amy\/2005\/11\/19\/chief-legal-officers-speak\/\">Chief Legal Officers Speak<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Trust at a DNA level Matter management\/partnership Cost Fair and flexible billing No surprises\/Results Value That is my 10-second executive summary of Understanding What Drives Corporate Counsel in Their Relationship with Outside Counsel, the Legal Marketing Association &#8211; New England &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"more-link\" href=\"https:\/\/archive.blogs.harvard.edu\/amy\/2006\/11\/17\/what-drives-corporate-counsel-in-their-relationship-with-outside-co\/\"> <span class=\"screen-reader-text\">What Drives Corporate Counsel in Their Relationship with Outside Counsel?<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":89,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[192],"tags":[],"class_list":["post-105","post","type-post","status-publish","format-standard","hentry","category-law-firm-marketing"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/posts\/105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/users\/89"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/comments?post=105"}],"version-history":[{"count":1,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/posts\/105\/revisions"}],"predecessor-version":[{"id":791,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/posts\/105\/revisions\/791"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/media?parent=105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/categories?post=105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/amy\/wp-json\/wp\/v2\/tags?post=105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}