Let’s break the silence about breaking the fast. Hard as it may be to stomach, somehow, despite all my efforts and 5,350 posts, I skipped breakfast. My gratitude, therefore, extends across the Atlantic to the Iberian Lawyer, Jan./Feb. 2010 at 25. It sets before us the commonsense idea that early morning may be a more efficient time to meet with a firm than during the middle of the day.
Rather than blow a hole in the middle of your busy day, grab a bagel before work and swallow the pitch.
One question on a survey of general counsel asked them to rate 19 factors that might bear on their hiring decision for major matters. Several of the factors struck me as novel, if not bizarre.
“Market share of the firm in similar matters.” How would anyone in a legal department know such a figure for either the firm or the “market?”
“Recent growth history of the firm.” and “Turnover rates of Partners and Associates.” at least has some logic in that they consider the stability of the firm. Still, it’s one or two partners you care about, not the whole kit and caboodle.
At a recent conference of the Iberian Lawyer’s In-House Club, “Some in-house lawyers said they meet regularly with their external lawyers to ask if the work is profitable for them, although some other lawyers said this was not appropriate.” I should say not!
The idea of checking on whether your external firm is making as much as it thinks it should is ludicrous. The quote, from Iberian Lawyer, Jan./Feb. 2010 at 13, dismays me as I side completely with those at the conference who believe even asking the question is “inappropriate.”
Your responsibility as general counsel is to maximize the value obtained by your company from law firms. Not that you should abuse them, think short term and beggar them, but youyou’re your team should strive to obtain good value for your money and let them worry about their take-home pay.
Having just conducted a conference call for numerous law firms invited to respond to a lengthy Request for Proposal, I ruminated on why there were only a handful of questions. Some possible reasons came to mind, which I have listed somewhat in declining order of their likelihood as explanations.
The ubiquitous Tom Sager, general counsel of DuPont, told an Ark conference that he looks for three key attributes in his company’s primary law firms. He looks for “closeness, closure, and collaboration.” Actually, his first term was “loyalty,” but I like the memorability of “Three C’s”.
Closeness (loyalty) means to him much more than the avoidance of ethical conflicts, or even business conflicts. It means turning down opportunities to work with competitors.
Closure means finishing the case or matter promptly, an objective he pointed out is “inimical to the law firm business model.”
At a conference organized by Ark, an experienced Chief Operating Officer of a major legal department offered some ideas on how many law firms a lawyer can manage. One of his lawyers manages seven firms, “which I think is too many,” he said. More commonly in his department, the in-house lawyers who have matters where a law firm has been retained oversee two or three firms.
Let’s apply that estimate. Assume a US legal department with 100 lawyers. Of them, assume 75 percent manage outside counsel (See my post of May 21, 2008: Pareto and inside managers of law firms; and June 26, 2009: three-fourths of US in-house lawyers supervise at least one foreign law firm.). and those 75 lawyers oversee 2.5 firms on average. Clearly, some law firms work with more than one inside lawyer, so let’s assume the average is two distinct firms per oversight lawyer. That would leave 150 law firms to service the department (See my post of April 18, 2009: law firms hired by large law departments with 5 references.), which seems on the low side.
Almost two years ago, a metapost pulled together what I had written on these pages about networks of law firms (See my post of Feb. 21, 2008 #2: law firm networks with 7 references.).
Those posts included 18 networks (aka associations): AM LF Association, ASLA: The Association of Great Law Firms in Italy, Consulegis, Interlaw, Interlex Group, International Network of Boutique Law Firms, Lex Africa, Lex Mundi, Markson MacDonald – The Barristers Group, Meritas, Multilaw, Pacific Rim Advisory Council, SEELegal, State Capital, TAGLaw, Terralex, US LF Group, and World Law Group.
But the groups of firms keep sprouting up or at least coming to this blog’s attention. I tracked down eight more (See my post of Feb. 7, 2006 #3: CMS; April 10, 2006 #4: Association of Patent Law Firms; March 23, 2008: ALFA International; Sept. 21, 2008: Bomchil Group and Worklaw Network; July 4, 2009: MSI Global Alliance; Jan. 29, 2010: CIUS Leading Counsel Network; and March 11, 2010: Law Europe EEIG and Ius Laboris.).
Almost two years ago, a metapost pulled together what I had written on these pages about networks of law firms (See my post of Feb. 21, 2008 #2: law firm networks with 7 references.).
Those posts included 18 networks (aka associations): AM LF Association, ASLA: The Association of Great Law Firms in Italy, Consulegis, Interlaw, Interlex Group, International Network of Boutique Law Firms, Lex Africa, Lex Mundi, Markson MacDonald – The Barristers Group, Meritas, Multilaw, Pacific Rim Advisory Council, SEELegal, State Capital, TAGLaw, Terralex, US LF Group, and World Law Group.
But the groups of firms keep sprouting up or at least coming to this blog’s attention. I tracked down eight more (See my post of Feb. 7, 2006 #3: CMS; April 10, 2006 #4: Association of Patent Law Firms; March 23, 2008: ALFA International; Sept. 21, 2008: Bomchil Group and Worklaw Network; July 4, 2009: MSI Global Alliance; Jan. 29, 2010: CIUS Leading Counsel Network; and March 11, 2010: Law Europe EEIG and Ius Laboris.).
As equities analysts have a harder time evaluating the stock of conglomerates, so law departments may have a harder time evaluating law firms that have provided them a range of legal services. This idea was expressed at an Ark conference in these words: “It’s harder to evaluate a firm that covers lots of matters than a more precisely targeted one.”
I have not heard of any legal department that evaluates its primary firms down to the granularity of practice areas. Legal departments, to the modest extent that they formally evaluate firms, do so at the level of the entire firm. That holistic perspective becomes less and less insightful the broader the firm’s legal services. The analogy is to client satisfaction surveys that ask about the legal department as a whole, rather than about specific lawyers or groups of lawyers. Over time, legal departments should look at their spend by practice group and try to evaluate firms at that more useful and reliable level.
Yes, hourly billing rates near $1,000 draw the ire of in-house lawyers. But at an Ark conference this week, a general counsel panel made the point that general counsel often wish they could get more time from the very same, expensive partner. It is that lawyer’s judgment and ability to change direction (innovate) that provides so much more value than all the lower-cost drudges churning away below.
Something like the borscht belt joke about the food being so bad and the portions so small, senior lawyers inside moan about the meter ticking so fast and that they get so little time.
Law Department Management Blog