Articles Posted in Outside Counsel

Legal Strategy Rev. of CPA Global published an interview of Helen Gillcrist, Vice President and Manager of Enterprise Legal Services at Liberty Mutual. According to the June 27th piece, Gillcrest manages the insurance company’s relationships with several thousand law firms. Pay attention to four thrusts mentioned in the article.

http://www.cpaglobal.com/newlegalreview/4903/mutual_objectives_seal_lawyer_

Her team includes an “analytical group, including statisticians, econometrists – this company is very analytical and into metrics.” Mirabile dictu! Metrics are honey to this Pooh blogger.

On June 27, 2011, Legal Strategy Rev. of CPA Global published an interview of Helen Gillcrist, Vice President and Manager of Enterprise Legal Services at Liberty Mutual. Gillcrist joined Liberty Mutual in 1981 and soon took a senior role in the law department, becoming perhaps the first law department administrator. Today, Liberty Mutual’s legal department employs more than 700 lawyers spread over 65 offices.

http://www.cpaglobal.com/newlegalreview/4903/mutual_objectives_seal_lawyer_

Actually, that is but a part of the insurance company’s legal entourage. “Our panel is slightly fewer than 1,000 law firms strong, but we deal with about 3,000 to 4,000 law firms because many of our customers specify that they want to use a particular firm.” Six years ago Gillcrist became responsible for the department’s policy and strategy for all these legal expenditures – managing its outside-counsel spend. According to the interview, members of her group “find the firms, negotiate the rates, audit the work and deal with any performance issues.”

An article on requests for proposal in the ACC Docket, June 2011 at 74, claims that “More and more companies are using requests for proposal (RFPs) to get a glimpse of what tailored ‘solutions’ outside counsel may offer and on what basis.”

To glimpse tailored solutions may be legitimate and innocent: ask law firms to describe how they would handle a matter or cluster of matters. Or it could be exploitative and guilty: deliberately luring in work product, strategies, tactics and legal analysis without offering a reasonable chance of being retained or protection for the hard-earned experience, valuable time, and useful work product they invest (See my post of Oct. 1, 2005: the ethics of using good ideas in RFP responses.).

One particular question posed by a law department in an RFP puts law firms in a bind: “How would you handle this matter?” It may be the most important question to ask of a law department, but should a firm spill its innermost secrets and legal analysis? Will those thoughts devolve to another firm’s benefit? Consultants face a similar quandary: do you roll out your best thoughts, methods and experience, even with examples and case studies, and risk leaks of all that intellectual capital to a competitor? Or do you withhold and thereby perhaps lose the competition?

Thomson Reuters has acquired the assets of eBillingHub. According to the July 2011 issue of Am. Legal Tech. Insider at 1, eBillingHub was one of the major players in the ebilling and electronic invoicing sector. The newsletter explains that eBillingHub is “best understood as a SaaS data exchange that automatically configures client codes and billing rules with third-party ebilling systems.” It now joins Elite as part of the Business of Law unit at Thomson Reuters.

Having just recently written about this class of software, which checks law firm bills for their conformity with clients’ e-billing guidelines before the bills are submitted, I add this item (See my post of June 1, 2010: why don’t law firms test their invoices against their client’s e-billing rules before submitting them; and Dec. 2, 2007: reference to eBillingHub.). Law departments appreciate the grooming of bills before they arrive.

Do invoices from law firms flow in steadily during the year, or are there dry spells and floods? I wrote my latest column for Morrison on Metrics to try to sort out what might raise and lower the level, but in the end came to nothing conclusive. Nor do I think it even matters very much for legal departments.

A comment from John Conlon offered a perspective I agree with: “It’s often said that ‘a lawyer’s pen gets heavier as the year draws to a close.’ You need to account for the fact that many lawyers – especially in larger law firms – will look to pump up their billings as the year ends in order to meet their firm’s minimum billing requirements or get extra hours in for bonus purposes. Any realistic look at things that affect ‘seasonal’ legal billings has to consider this very real issue.”

I just completed posts on four findings from a recent survey about the effects of UTBMS codes on law firm billing practices (See my post of June 23, 2011: often, many codes used even in a modest bill; June 27, 2011: codes made little difference in billing behavior of firms; June 28, 2011: little feedback on selection of codes; and July 5, 2011: law departments give no guidance based on codes). The Legalbill survey is rich in speculative insights and you are welcome to ask for a copy from Steve French. steve.french@legalbill.com

Inspired, I took a look back at my writings on the topic but found meager postings (See my post of April 9, 2009: no good set of task-based codes exist for discovery; June 3, 2010: GE litigators favor task codes; Feb. 11, 2010: drawbacks of Uniform Task Based Billing Codes; and April 7, 2011: task-based codes compared to automated bill review software.). These posts supplement my first metapost on the topic (See my post of Dec. 21, 2008: UTBMS with 8 references.).

Previous posts here have mined some of the findings from a Legalbill survey of thousands of law firm lawyers. The survey asked about UTBMS codes used by the firms on their invoices. One question was “Over the last 18 months, based on your clients’ analysis of your invoices using information from the UTBMS, have you been instructed to change the way you manage their cases?”

Three-quarters of the respondents selected the choice that indicated the least intervention by the law departments. The clients remained mute regarding any conclusions they might have drawn from the laboriously prepared and coded bills. If nothing comes back, it’s easy to disparage the value of the codes and the effort felt to be wasted on compliance. Either law departments should effectively use coded invoices or end the requirement.

A survey last month by Legalbill, a provider of cost-management software for legal departments, obtained data from more than 600 U.S. law firm lawyers about their use of UTBMS codes. One survey question asked “To what degree have you changed the amount of attention given to selecting the most appropriate UTBMS code as a result of client feedback?”

Two-thirds of the lawyers said not at all or to a small degree. That could be because their clients agreed already that the codes the firms selected properly characterized the services billed for. If the firm does it correctly, no feedback from the client would be needed. Or, in a darker interpretation, it could mean that clients don’t say anything to the firms about their bills and coding. Feedback is meager to non-existent.

If you would like the fuller set of the data results, write Legalbill’s Managing Partner, Stephen French.

A survey conducted in the past month by Legalbill obtained data from more than 600 law firm lawyers about their use of UTBMS codes. The survey asked them “To what extent did the clients’ requirement of your use of the UTBMS codes change your billing behavior?” My presupposition was that tasked-based billing should not change a firm’s billing patterns: timekeepers simply avoid block billing and choose the most appropriate code for the activity.

According to the survey findings, four out of ten of the lawyer respondents said that the code requirement changed their billing to a moderate or large degree; the remainder said that it made no difference or only a small difference. Perhaps for those firms that had not previously had to do even that much responded that, yes, they had “changed their billing behavior.” I think of that as an administrative change in behavior. As for more profound “billing behavior,” we can’t tell from the wording of the question whether code usage changed what was substantively done by the firm, who did the work, or how much the firms billed. Those would be practice changes, and much more telling.

If you would like the fuller set of the data results, write Legalbill’s Managing Partner, Stephen French.

Should you expect your law firms to scrub their invoices electronically to match your guidelines?

We learn from the Orange Rag, June 2011 at 3 that “Wilson Legal Solutions has partnered with Invoice Solutions to develop the Invoice Optimizer system. Compatible with LEDES (Legal Electronic Data Exchange Standard), it prescreens law firm invoices and flags entries that don’t comply with client guidelines, so firms can streamline and improve ebilling processes. Invoice Optimizer integrates with Elite software.”

Part of me admires law firms that invest in software so that their invoices comply with the complicated and obnoxious dictates of their clients. Both sides benefit from invoices done correctly.