Richard Caruso, VP, ALM LLC – MODERATOR

Jeff Franke – Yahoo! Inc

Connie Brenton, Senior Director of Legal Opps, NetApp, Inc.

Steve Harmon, VP and Deputy GC, Cisco

George Milionis – GC, Petersen-Dean, Inc.

[My comments in brackets]


Steve: The legal department is there to make sure that they can build and sell their products. Here’s their model of what stays in and what goes out. They are not price sensitive to mission critical activities, but there’s not a lot of “bet the farm” litigation. And high competition for it.

Cisco

Connie: A lot of the work is coming back in-house, but not mission critical, but mission critical to the operations of the company. Firms need to be creative for the repetitive work.

Jeff: Yahoo! has huge legal opps teams. There is an evolution within legal opps. The model is changing. No longer selling to the person you have the relationship with, as in the “old” days,” but as they get more sophisticated in how they buy legal services. [talking legal procurement, people. LISTEN up]

Talking the lock-step rate increase. Long story short, you are forcing the work in house as the legal budgets are NOT increasing. They are looking to partner on new pricing models [are you LISTENING??].

George: They had a big litigation issue in CA, so they looked at creating a law firm within the company. And, well, yeah, they did. Not just low impact, PI cases, but high-stakes litigation. Brought 90% of the litigation in house. Brought in technology, use contract lawyers, and they cut legal spend by seven figures.

Connie: They are at the tipping point. We will see drastic changes into the function of the GC office within companies.

Jeff: Within the next few years you will see corporations bring pricing people onto their teams. Price is important and critical. For the critical matters where lawyers bring great value, $1000 or more/hour is not a problem. It’s the fat in the system [expensive offices) that is driving up rates. They are not looking for law firms to not make a profit, but, come on already.

Steve: They pay for the outcomes. They don’t want to pay for the input. It doesn’t fit their business models, and doesn’t make sense to them. The firms that win their business have a sense of what they want to achieve, and can define the options available to them [HELLO, this is the JOURNEY MAPPING we worked on in the CMO Summit]. Successful firms have a project management mindset. All of their outside lawyers go through project management training [shout out to Legal Lean Sigma … do it!!]

Connie: Once they understand how much something should cost, they will move to fix fee.

Steve: One of the key things that he and his department are measured on is predictability of the budgets they address.

FIXED FEES. FIXED FEES. FIXED FEES.

Jeff: Disagrees to an extent on the input. He does care. [and he and Steve will have a chat after the panel]

Steve: As they outsource their work on deals, they understand that they sub-contract. They expect their firms to do the same.

Connie: Collaboration is going to move the market. The change management in their roles is extreme, and you will see it accelerate.

Richard: Looking at how technology is affecting their organizations.

Jeff: It’s going to depend on the company. Electronic billing is critical. They are still trying to get their arms around the numbers and the data. Yahoo! is looking at business process automation (getting back to efficiency and cost processes). If they have a process that is broken they look to automate it.

Connie: Dashboards are new to in house. They need to run their departments as a business. #2 tech is “how can they run their departments more efficiently.” IF YOU KNOW ARE BUSINESS YOU ARE FAR MORE VALUABLE (yes, I am shouting). #3 Electronic signature.

Steve: Talking AI, because that’s the buzz. The principle opportunity for AI is to access information without the judgment. They want to make it much easier to get to the information they need. They need to get their hands around the data. #2 – they need to compare the value of a known value v. an unknown value.

Connie

Jeff: Corporate Legal Operations Consortium (CLOC) is a new organization where they are collaborating. [Think LMA for in-house lawyers].

Heather: What about the rate increase letters: the language is dictatorial, no phone call, arrogant, after the time they have set their budgets. To quote Connie, “This will stop.”

George: If it’s an increase for an increase, they will bring the work in house.

Steve: Show him how you are 6% better, have 6% value. If just because someone is moving up in a firm’s hierarchy, not his problem. The minute they can jettison you, they will.

Connie: Doesn’t think the law firms understand the administrative nightmare rate increases brings to them in house.

I just read the following post SCOTUSblog Won Readers, Not Clients: Popular blog didn’t work as marketing tool for law firm but was a hit with readers, founders tell UGA audience.

I have to disagree.

In general, and in most cases, a corporate legal blogger might not be able to point to a particular piece of business and say, “I brought that in from writing this blog post on that date.”

However, if written correctly, the attorney can most likely point to their practice and see a correlation between their increased business and the launching of their blog.

I just don’t think the folks at SCOTUSblog are correctly measuring its value.

A corporate legal blog is NOT a business development (read SALES) tool in and of itself. It is there to provide what Nancy Myrland calls “digital breadcrumbs“:

Blogging, just as all other content scattered across the Internet, is what I always refer to as “digital breadcrumbs.” The words, thoughts and opinions we share in these spaces serve to help others find a path to us when they happen to need us, or at least when their interest in our areas of expertise is heightened.

A blog, done right, is an educational tool that will position the author and firm. Avvo‘s Josh King agrees:

Too many attorneys and firms treat them like outbound marketing vehicles, doing more overt sales pitches than information and thought leadership.

Blogs are about value, and education. They are about telling the story you want the general counsel to read as they are doing their due diligence on the attorney and the firm. They are about having the right results on page one when your name is Googled.

Getting back to the softer ROI that we’re talking about, Virtual Marketing Officer, Jayne Navarre, points out that the SCOTUSblog article contradicts itself: Continue Reading How NOT to measure the value of a legal blog

Kudos to the Legal Marketing Association – Los Angeles Chapter program team on today’s Corporate Counsel Panel. I have to say, I always love me a GC panel. Sure we hear the same ol’ same ol’, but there are always a few new nuggets of information in there.

GC panel
Corporate Counsel Panel
Three things popped out at me:
  1. The importance of LinkedIn. I have never at a panel heard GC after GC rave about LinkedIn. Okay. Four out of six. But they were vocal in their enthusiasm. The connections.The groups. They are using it to vet outside counsel. Learn information. Stay informed of trends. I’ve hyper-linked the LinkedIn profiles below where found.
  2. ACC Daily Newsletter. For those who don’t know what this is, the Association of Corporate Counsel uses Lexology to feed a daily newsletter for ACC members. The members can customize it by industry, practice, region, etc. Where does Lexology get the content? Law firm blogs. Corporate counsel are reading with their eyes and clicking on things that are of importance.
  3. Headlines Count. Whether it’s coming from an e-newsletter, scrolling through a LinkedIn group’s latest postings, or the Lexology daily newsletter, corporate counsel are clicking on the headlines that resonate with them on the issues they are facing today. Harkening back to this post, Why, yes, Amy. I did learn two new things, it’s not WHAT they are about to read, but WHY they need to read it that counts.

I tweeted at #lmamkt some other little tidbits. But those are the biggies that I walked away with, Oh, Yeah. One more: 4. It’s all about relationships. Don’t ever forget that. In Photo: L-R. Deborah Greaves, Secretary & General Counsel, True Religion Brand Jeans; Camilla M. Eng, General Counsel, JM Eagle; Joanne E. Caruso, Vice President, Global Litigation, Jacobs Engineering Group Inc.; Jennifer Fisher, Senior Counsel, Intellectual Property, The Boeing Company, Boeing; Sheri Eisner, Associate General Counsel, JAMS; Tammy Brandt, Vice President and General Counsel, ServiceMesh, Inc.

I rarely miss a general counsel panel at any conference, but I did miss it last week at the Legal Marketing Association‘s annual conference.

Not to worry, the LMA Tweeters were tweeting away, and Lindsay Griffiths put together an incredible two-part recap.

Change or Die? A General Counsel Program

Part 1

Part 2

Sounds like an incredible program, and, while sorry I wasn’t in the audience, Lindsay did such  a great job in her recaps that I don’t feel as if I missed out on anything.

There were ominous warnings:

There will be new business models that come into place. We’ll build them if you won’t. We don’t need YOU to survive. We need the [legal] industry to survive.” – Jeff Carr of FMC Technologies

Key insights:

… her (Janet Dhillon of JC Penney) job is about balancing her clients’ business objectives with their legal requirements.”

Great stories:

Janet illustrated this idea of staying focused on client intelligence with a story – the day after the Christmas holiday one year, a news story broke about her company, involving a plant in a foreign country. One of their firms emailed them to let them know that they had a partner vacationing in that very country, who was on the ground to assist them if needed. Although they didn’t require his assistance, it was invaluable that the firm had taken the time to stay updated on the issues affecting the company, reach out to them to offer their assistance, and did so even during the holiday season. That has stayed with her.”

Warnings:

The traditional law firm model is dying. Get over it and understand what the new world is going to be.  There will be new business models that come into place. We’ll build them if you won’t. We don’t need YOU to survive. We need the industry to survive.”

And truths:

Quality is not a differentiator; get over it. Quality is the price of admission.”

Go back and read both posts. They’re worth the price of admission.

Panel Sponsor
I love me a great general counsel panel. While they often times say what I expect, which is fine because that reinforces my preconceptions, there are always those golden nuggets that change those perceptions as well. This general counsel panel, Achieving Greater Collaboration – What you Need to Know to Get to a Win-Win Relationship with Your Clients, has to be one of the best I’ve attended. Today’s panel included:

Before I start summarizing the presentation, let me thank the moderators Tom Duggan, Group Publisher and Cathleen Flahardy, Editor-in-Chief for InsideCounsel. They did a great job leading the panelists, and formatting the program into the four sections outlined below. (While I am attributing comments next to the names of individual participants, I will only put in quotes things I am absolutely positive are verbatim quotes. I’m a fast typist, but sometimes not that fast.)

COLLABORATION & COMMUNICATION

Obviously, all three general counsel were well versed and supportive of the ACC Value Challenge. They all agree that communication around the “value proposition” is actually taking place. To begin with, private practice lawyers (lawyers) need to understand the general counsel’s (GC) role within their companies. I hear this time and time again at programs, and I suppose we’re going to keep hearing it until everyone gets it. JEFF– General counsel are measured on success of outcomes. It’s very rare for law firms to ask their GCs how they you measured for success. Lawyers need to ask themselves: “How can the law firm make the in-house function look good?” JOHN – The hunt for unmet client needs is an untapped resource. You’ll never find them if you don’t get to know the GC. Law firms are REALLY bad at doing this. They are good about the discussion of  global footprint and expertise, but rarely do they ask the standard of “what keeps you up at night?” Great Examples JEFF – One of the measures he is judged on is total spend v. revenue (staying ahead of it). During the recession his budget was cut by $11 million. He worked with his law firms to beat a certain number, and he would share the savings with the law firm. STEVE – One of his law firm’s asked: “What does a win look like for YOU.”  Steve proceeded to lay out what would make him look good to his company. The lawyer stopped him. Not what would the win look like for the COMPANY, but what would a win look like for STEVE? This conversation assured him that service would be of high importance. There is a litigation team he works with who take the principles of cost containment they have learned managing their firms and practices and then apply them to the client’s litigation management. JOHN – Tells a story that when he sent out the announcement of his new job, where he would have international oversight, one law firm invited him to work with their London attorneys on specifics on the regulatory issues he would be facing. NON-BILLABLE. It showcased that they were looking for a new partnership, and saw beyond the congratulatory nature of the announcement. STEVE – When his budgets went down at a new company because it was a newer company, some law firms saw that he didn’t have money to spend, so they turned away. Others saw it as an opportunity to partner with him, make him look good, and provided complimentary services. They were looking long-term and down the road. JEFF – Alternative fee arrangements aren’t necessarily good for everyone. The honest value relationship is when you have value to offer. “Mobile lawyers” – Jeff joked about when lawyers move they often times take a road show of their new partners to meet their clients and tell them how great the new firm is. It makes him wonder: “What about the old firm?? Weren’t they great too?”

IMPORTANCE OF INDUSTRY EXPERTISE

JOHN – Differentiation is not being smart. All attorneys all smart. At Coca-Cola they talk a lot about the brand and their clients. What he is hearing from attorneys is: Their sweet spot is the world and they work too hard. When one of his clients hit $1000 an hour, they basically self-selected themselves out of most of their work. While they will always have a need for a $1000 an hour attorney for some things, it won’t be for most things, especially the “commodity” work. STEVE – Marketers and the law firms need to figure out a way to get GCs to hire the firm. How do you make the client a client of the firm, and not just to the individual attorney? If we (legal marketers) don’t figure this out, we won’t be able to stop attorneys from moving around. JEFF – Law firms should be investing the money to build the law firm’s brand. (Jeff, can you call my people? — just kidding :D) JOHN – Industry expertise is the key to differentiation. READ THE 10K. If you don’t prepare for the meetings, you are “INTELLECTUALLY LAZY.” The whole world is an open book test, and there are NO excuses. STEVE – It is inexcusable to NOT know everything about the company. JOHN – He wakes up every day and reads the Wall Street Journal and the New York Times. If their company is mentioned, they will be talking about it at work. If you want to send him something, send him nuggets you find that show that you are plugged in and LISTENING to the messages around his company and his bosses. That is much more valuable than getting a copy of a 9th Circuit decision.

DIVERSITY & CULTURAL INTELLIGENCE

Diversity is a concern and focus at many law firms. But, is diversity a requirement? JOHN – Diversity is a requirement like being smart is a requirement. He works at an international company. This is NOT about HIS diversity; it’s about their “client is the world.” How can an office in Los Angeles not have anyone who speaks Spanish?

“It’s not about morality. It’s about growing your franchise, growing your footprint, firms that can serve the 21st century clientele …. It’s about a forward thinking, smart, cutting edge practice.”

STEVE – Clients are looking at changing demographics because that’s where their marketplace and future customers are. For some reasons lawyers think that this doesn’t apply to them. JOHN – “85% of decision making in this country is done by women. Why are only 17% of the partners in the country women?” And, a great pet peeve and a red flag: What do Diversity and Pro Bono have to do with one another? Why are they under one tent? They are completely separate.  JEFF – They can tell when the law firm’s diversity is growing organically and when it is fake. Don’t do these things to placate the general counsel. They can tell when you mean it or not. Law firms DO, however, need to learn how to grow, attract and retain a diverse workforce.

MARKETING TO IN-HOUSE COUNSEL

These are sophisticated business people. They “get” it. The questions is, do we (lawyers and legal marketers) get it? JOHN – When a law firm walks in the door, they need to understand that they are asking the company to displace some of their income. The question is: Does he go to the incumbent firm that he know and uses, or to a new firm? The new firm needs takes on the onus here. The pitch needs to be provocative and out of the box. He gave an example of being sued on a matter in New York. Everyone and their cousin made a pitch. A new firm came in, acknowledged that they knew they had incumbent firms. They started off with the usual spiel: “We know the judge.” “We know the opposing counsel.” And then they came in for the kill: “We’re pretty sure we’ll prevail on a motion to dismiss. In fact, we already drafted one. We’ll give it to you for free. If we win, we’ll talk about a success fee. If we lose, it’s free.” They got hire. They won. And they now are getting more work. JEFF – He has a friend who is a labor & employment attorney leaving a big firm. The firm charges premium rates across the board. The rates are driven by the corporate deals. There is price insensitivity at the firm. His friend’s challenge is that his work is viewed as commoditized, and the firm is unwilling to un-choke the rates … so the guy has to leave. STEVE – The landscape in-house is changing. Client expectations are moving. Law firms unwilling to adjust their business models are akin to the tree that doesn’t bend in a hurricane. Law firms need to be flexible and bend, and those will be the ones successful at the end. There will always be a need for a $1000 expert, but they are high-end and they expect a light touch on the bills due to their experience. There will always be bet-the-farm moments, but the majority of legal work is NOT THAT. There are times when you need a team of 15, but that’s not most of the time. Most of the time it’s who is going to be most creative and get the work down.

RATES & BILLING

JEFF – They put in an e-billing system in 2004 and they use the data on the back end to figure out when they’re getting double billed. Why isn’t the law firm catching that? The accounting systems within law firms are about WIP, realization, etc. In-house, accounting systems are about how much things cost, where they are saving money, where they can be doing better. Law firms rarely know how much a matter like X will cost. A law firm should be able to walk in and say “We’ve done this before, and it’s cost us $X in the past, and we think we can bring it in for $Y.”

FINAL THOUGHTS

JEFF – A GC’s office is a cost center to their companies. Private practice lawyers need to understand that. JOHN: Lawyers are profit centers. GCs are cost centers. Firms that show sensitivity and behaviors that acknowledge that are affirming. STEVE – “This business is not one size fits all, it’s one size fits one.” The presentation today are discussion points to get the conversation going. Legal marketers need to take these ideas back to our offices and be seen as thought leaders to our lawyers. HEATHER – Never miss an opportunity to attend a GC panel. Differentiation is based on service, not on education. Be willing to take a risk to establish a new relationship. Know, understand and listen to your client. It is unacceptable to NOT understand your client’s business and industry.Intellectual laziness will NOT be tolerated. Don’t patronize the client with phony programs … it shows. These GCs were definitely pushing to change the conversation away from “hire the lawyer” towards “hire the firm (the brand).”