General Counsel must ensure that their preferred law firms provide value for money and that relationships are developed to their full potential. In doing so, some General Counsel look to set up new panels, some review their existing panels while others look at individual relationships on a ?horses for courses? basis.
What then are the value indicators that should be assessed when value is a subjective and relative concept?
With the exception of commodity legal services (where price per case, timelines and results have hard, empirical measures) everything else risks being left to ?gut feel? judgements and intuitive (often dubious) assessment criteria that may do a disservice to law firm and in-house team alike.
I want to focus, therefore, on the issues that should be addressed to encourage relationships that are genuinely and tangibly built on the quality of the relationship, on trust and mutual commitment.
The ?given? issue in legal services is that lawyers know the law. While we may be able to recall a few examples where we were perhaps less confident of this premise, it is undoubtedly true that for the majority of the work we outsource, law firms of a certain size and reputation get the law right.
What therefore makes one law firm more attractive than another to a prospective client? What might be the points of difference? The list of factors that follow are ones that I commonly use when helping General Counsel with the task of selecting their law firms:
? Location ? are the firm?s offices conveniently situated for my business? Is this important enough to influence the decision or just a point of minor convenience for me and for them?
? What is the role of the relationship partner? Are they committed to me and my business or will I see them once a year for a pleasant lunch and to talk about football?
? Will I be able to influence the law firm?s choice of lawyers or is it the case that I get what I am given? How will team members be changed going forward? What happens when someone on the team is not the right person for my business?
? How will the firm treat me if they discover a potential conflict with another client? Am I happy with Chinese walls? What will my business colleagues say about this?
? What are the related areas of expertise in the firm that might be valuable to me? How good will the firm be in proactively identifying the possible opportunities to involve their colleagues in my world in such a way that I can see a seamless service?
? Will the firm invest time and energy getting to understand me, my team and my business? This is so much more than running a press clipping service; I want law firms to be passionate about my world and to see opportunity through my eyes not theirs.
? What typical reaction will I get from support staff and very junior lawyers when I speak to them and meet them? Will I feel they know who I am and will I feel they really care about their business too
? When we talk about fees is it a struggle to get clarity? Is their any embarrassment involved in even raising the subject? Are rates transparent? Is there an appetite to share some risk so that thee is a ?downside? as well as an ?upside?? Where are the thresholds, in terms of volume, for securing more value? What are the truly innovative fee arrangements they have reached with other clients?
The concern with fees, nearly always, is that while value is often suggested by discounts on hourly rates, this of itself does not address efficient file management, the quality of the service and the investment in delivering a committed service for value.
The following points are therefore particularly important in helping to show value.
? What key performance indicators are law firms asked to meet by other clients? What are their own internal KPI?s that they must meet to be successful in their own terms? How does the firm define a successful relationship and success in delivering the legal service? What measures do they follow to ensure efficient file management, timeliness and no waste?
? How does the firm value value-add? Is it a strategically significant and thoughtful accompaniment to the legal service proposition or an after-thought? Will the law firm invest in creating bespoke value add that helps the in-house legal team improve? Can the law firm proactively suggest ways in which by working together value add becomes an intrinsic element of the service for the long term benefit of everyone involved.
? What CSR policies do the law firms follow and how might these be linked to what the in-house teams must demonstrate within their own businesses?
? How and when will the legal work be reviewed and what happens if there is critical feedback to give? Is this made easy or difficult and will the firm be able to demonstrate that they have acted on the feedback? What if the firm has critical feedback of the in-house team? Can this be managed without it damaging the relationship? How generally do we encourage openness and a commitment to common goals of excellence, value and quality at every level?
? What is the ambition on either side for the relationship? How can we all plan to help develop the relationship and what will success look like for both sides if the relationship develops?
? How will we manage any fall-out? Mistakes happen but if the relationship is strong these will be seen as much as opportunities as threats. Can we turn mistakes around quickly and without defensiveness?
There is no magic formula that makes one firm better than another. The cleverness in outsourcing is not just deciding what work goes outside, to whom and at what price; the real cleverness is in how the work goes outside and how the relationships are managed when it is outside.
Thoughtfulness at each stage is the key and the more each side invests in working towards achieving success across all these issues, the more the relationship will prosper for all concerned.