Today I was fortunate to listen in on a series of fascinating conversations held by in-house counsel gathered at the Practising Law Institute’s Corporate Counsel Institute 2010. The conversations ranged from the risks of social media to the impact of the recession on corporate America. (If you’d like to see my notes on these PLI sessions, take a look at my Twitter stream or search for the Twitter hashtag #PLI on September 22.) As one of a small handful of law firm attorneys present, it felt a bit like being a fly on the wall. In fact, it was a golden opportunity to learn more about what clients want.
Of all the sessions, one of the liveliest concerned “Innovative Law Department Billing Arrangements.” The moderator, Susan Hackett of the Association of Corporate Counsel, did a superb job of framing the discussion and ensuring high value content. The panelists, Kerry Kotouc from Wal-Mart and Lynn Easterling of Cisco, provided many examples of how focused, savvy in-house lawyers can create a productive new working relationship and better fee arrangements with their outside counsel.
There has been some recent commentary on the perceived failure of alternative fee arrangements to gain traction. Susan Hackett unambiguously exhorted in-house counsel to step up and take leadership in this area. She acknowledged that many in-house lawyers opt for discounts because they don’t know where to begin to create a better alternative fee structure. Another complicating factor in her view was that in-house counsel waited for law firms to take the lead and then, because many were treating this as a zero-sum game, assumed that if the law firm proposed the arrangement it must improperly favor the firm and be to the client’s disadvantage. She encouraged everyone in the room to find ways to structure their interactions with outside counsel as a win-win game based on a long-term relationship rather than the “speed dating” encouraged by the currently popular request for proposal approach.
During the course of the alternative fee arrangements session, the audience answered several survey questions. The answers revealed that while many are aware of alternative billing and alternative staffing structures, not enough considered themselves to be entirely comfortable with these concepts in practice. Clearly we all need further education and experience. Another of the questions asked the extent to which in-house counsel were looking to knowledge management and collaboration to improve performance. For the purposes of this question, KM meant more than having a brief bank or collection of model documents. To the surprise of the moderator, approximately half of the respondents said they were focused on this issue. (Apparently other groups of in-house counsel report a much smaller focus on KM and collaboration.) Finally, one of the most interesting survey questions asked what the audience thought was most important to in-house clients with respect to billing practices. 55% of the participants said that the most important issue was predictable, controlled costs.
That’s what clients want.
[Photo Credit: Tracy Olson]