• Stephen B. Kaplan, Senior Vice President & General Counsel – Connextions, Inc.
• Jeff L. Novak, General Counsel – AOL Paid Services
• John Lewis, Jr., Senior Managing Counsel-Litigation – The Coca-Cola Company

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).”