I’ve been working on the business side of law for a long time now. I have attended NUMEROUS general counsel panels. I have read study after study. And I have to ask, “Are any of you listening?”
I was at a presentation yesterday with the good folks at Thomson Reuters. They put up a slide of the general counsel’s top concerns. And then they put up a slide of the managing partners top concerns.
I, being me, raised my hand and asked: “What do you have to say about the complete disconnect between what the GCs are concerned about and what’s keeping the MPs up at tnight?”
I think I caught them off guard with that question because the next slides had nothing to do with bridging the gap between the disconnect.
According to a recently released Altman Weil Chief Legal Officer Survey:
Inside – Outside Relationship
When asked to select the service improvements and innovations they would most like to see from their outside counsel, three of the top four CLO responses involved costs and pricing. CLOs’ first choice for change in law firm services was improved budget forecasting, followed by greater cost reduction, more efficient project management and non-hourly based pricing structures.
However, Chief Legal Officers appear to have little hope that law firms will rise to the challenge. For the fifth straight year, the survey asked CLOs to rate how serious law firms are about changing their legal service delivery model to provide greater value – and for the fifth year, the median rating was a dismal ‘3’ on a scale of 0 (not at all serious) to 10 (doing everything they can).
To balance the picture, CLOs were also asked how much pressure corporations are putting on law firms to change the value proposition. CLOs rated themselves at a median 5 on the scale, as they have for four of the last five years.
After five years of similar responses to this pair of questions, it’s seems pretty clear that Chief Legal Officers have decided to tackle these problems themselves, rather than rely on outside counsel to partner with them on change.
Yet survey after survey of managing partners still show law firms are way too focused and concerned about how to increase rates and billable hours as a strategic goal. Yes, they understand that they are under pressure to increase value to the client, but they don’t want to do so at the expense of their rates and hours.
Tim Corcoran wrote a great piece this week on Big Data: Big Deal or Big Win? I will pay him the highest compliment I can and say that I circulated the post to all my partners with a ‘MUST READ” in the subject header.
Tim breaks down how corporate legal departments and law firms can use their data to make predictive costs to manage projects, and clients.
I’m going to say it again, “Until a law firm places as much emphasis on achieving their clients’ highest goals, we will continue to run around in circles.”
Clients do not want us to not make money or be profitable. They want us to be efficient. They want to know where the hell their money is going. And they want to know that THEIR money is well spent.
They want to know, before they sign on the dotted line, what the project will cost, what the deliverables are, and what they can expect.
Clients do not want surprises.
Law firms want to be profitable. But sometimes they don’t know what that means or how to measure it. Working in a cost-center, I get that. You want to make money, so you often times look to where you can save money, or where the ROI does not directly link back to revenue.
Yes, it costs money to launch a new website. No, I will never be able to link back, with certainty, where we brought in a new client because of a website launch. Just like I cannot tell you how much business or opportunities you have lost out on because you haven’t updated your web bio in 15 years. How many people have clicked on and clicked off because there just wasn’t any content there to read? (Memo to self: send out annual reminder to attorneys to update bios with this year’s wins and accomplishments.)
Times they are a changing.
The habits of the new generation of decision makers is nothing like the prior ones. We all have to adapt to one another. To listen to what the other is saying. Private practice attorneys HAVE to pay attention to what their client are saying and what they want. It is just too easy in this 2.0 world to find someone else who will.