Articles Posted in Outside Counsel

In several speeches I have presented a form of the following list. My contention is that these methods to limit the costs of external firms have yet to be proven effective.

1. Offshore lawyers and resources (See my post of Nov. 4, 2007 with some charges leveled against legal process offshoring.).

2. Unbundled services, where a law firm doesn’t do it all (See my posts of April 2, 2005 about unbundling services of law firms; and Sept. 13, 2005 which discusses a 5% estimate for external payments by law departments.).

A survey conducted by the Legal Electronic Data Exchange Standard (LEDES) Oversight Committee received responses from 121 law firms. The Committee’s report, released in March, 2007, contains mostly criticisms by law firms about the present state of affairs and damns electronic billing(See my posts of Nov. 28, 2007 on billing disputes, getting paid, and little difference in bill review.). A summary question (at 11) lays it on: “Only 8% of respondents feel that electronic billing streamlines the payment cycle and makes them more efficient, and 10% feel there is little to no difference between paper and electronic billing with regard to efficiency.”

A blunt manager in a law department that likes electronic billing might shoot back, “Too bad, deal with it!” Law departments perceive benefits from e-billing so how their law firms feel doesn’t matter. But it does matter. Over time, law firms will adjust, but basic economics tells us that if the cost of a service rises, ultimately the consumer picks up the tab. Right now, e-billing law departments benefit from a subsidy by those departments that don’t e-bill, but still pay some share of increased billing rates.

At least 17 vendors of e-billing software have been identified by the Legal Electronic Data Exchange Standard (LEDES) Oversight Committee (See my post of Nov. 20, 2007 with its invitation for survey respondents.). There may be others, because those were the vendors encountered only by the two law firms that are members of the Oversight Committee (See my posts of July, 11, 2006 with a list of six vendors; and Oct. 26, 2007 with five more.).

A palliative for this profusion may come from eBillingHub www.eBillingHub.com. According to an email I received from Greg Coticchia, the company’s CEO, the software from his company saves law firms time and money when they have to comply with multiple e-billing systems. This software as a service (SaaS) might be advantageous for law departments also if their firms can thereby meet their needs more easily (See my post of Dec. 1, 2007 on the eventual cost transfer of onerous e-billing demands.).

My article about how to learn more from your law-firm invoices explains 13 ways to squeeze more insights from them (See my post of Dec. 11, 2006.).

Since the publication of that article, I have written eight more posts on invoice review and related topics (See my posts of Jan. 25, 2007 about encryption of invoice data; March 23, 2007 about some statistical analyses of invoice data; May 8, 2007 regarding duplicate payments of invoices; Feb. 21, 2007 on standardized formats for bills; April 22, 2007 on bringing the UTBMS up to date; Feb. 4, 2007 about the ratio of partner time to other timekeepers’ time; Nov. 28, 2007 with some complaints by law firms about e-billing; and Nov. 10, 2007 for the notion of a three-way approval process.).

By contributing author Jane DiRenzo Pigott, R3 Group LLC jdpigott@r3group.net

The Women’s Law School Coalition is a consortium of the women’s groups at Boalt (Berkeley), Chicago, Columbia, Harvard, Northwestern, Virginia and Yale law schools. They recently published a list of the top 50 family-friendly law firms. The list was developed based on multiple factors and the data was obtained from law firm NALP forms (the form any organization must file to interview at law schools).

Family friendly policies that are viable are an essential tool in law firm recruitment, retention and promotion. But what impact do family friendly policies have on corporate legal departments hiring decisions when they are considering which law firms to hire?

Early this year, the Legal Electronic Data Exchange Standard (LEDES) Oversight Committee released survey data from 121 law firms. The report notes (at 11) that “24% of respondents have successfully retained a client after refusing to electronically bill at all.”

The report offers no explanation for this fairly high percentage of firms that resisted, but I can speculate. The major reason for that impasse, I suspect, is that the firm had to install and learn a new system, or pay a significant fee, but the firm realized it was likely only to work on one matter (See my post of Sept. 5, 2007 on the use of e-billing only with a department’s primary firms.). Another possibility is that that a fixed fee or contingency fee arrangement had been negotiated. Also, law departments might grant an exemption for a key law firm that has significant clout with the CEO or Board.

Competitive bid processes by law departments to choose counsel have appeared many times in posts on this blog. It is time, therefore, to collect some of my suggestions for how best to carry out such a process.

1. Give as many facts as possible in the RFP (See my post of Nov. 9, 2006.).

2. Ask only what you can use to help decide among the firms (See my post of March 13, 2007 about broad questions.).

By contributing author Jane DiRenzo Pigott, R3 Group LLC

“Law Student Building a Better Legal Profession” (“BBLP”), recently strongly indicated what they find important in an organization at which they will practice law:

1. demographic,

The Legal Electronic Data Exchange Standard (LEDES) Oversight Committee issued a 20-page white paper in March, 2007. Much of the report lays out the responses of 121 law firms to a survey about e-billing.

The firms were rambunctious! More than 80 percent of them said that “dealing with billing disputes” was “somewhat challenging” or “much more difficult” with electronic invoices than with paper invoices. That criticism may be directed at the mechanics of how to correct a bill that has been challenged or it might reflect the fact that more bills are challenged.

As to receiving payment, 39 percent felt electronic transmission was “somewhat challenging” or “much more difficult” than paper. Maybe e-billing systems transmit their approved invoices electronically to accounts payable systems and in that handoff lies delay and problems.

Legal Week, Vol. 9, Oct. 18, 2007 at 1, describes an ambitious effort to assign a brand value to the world’s largest law firms. A professional services association, The Managing Partners’ Forum (MPF), and a consulting firm, Brand Finance, will evaluate around 200 law firms in the study, which is due out by May of 2008 and will be freely available.

The rating of brand value, “designed to measure the intangible value associated with the law firm’s name and client links” is likely to take into account “client quality and loyalty and the strength of the management and people.” This ambitious venture will give law departments another vantage point when they want to select law firms. After all, brand value of the firm is certainly one aspect. Even more insightful will be assessments of the management prowess of law firms and their staff quality.

The positive benefits to law firms of a widespread good reputation (a brand) has cropped up repeatedly on this blog (See my posts of Nov. 19, 2005 on a patronizing view of law-firm cachet; June 12, 2005 with an assumption that name-brand firms get the nod in very serious matters; Feb. 20, 2006 on how frequently massive lawsuits end up with well-known law firms; Sept. 10, 2005 on brand-name firms; June 11, 2007 for a neuroscience basis for a well-known brand’s sway; June 10, 2007 on alternative billing gaining less traction with household-name firms; and May 27, 2007 that media coverage of firms matters little to Canadian in-house lawyers.).