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In Search of Perfect Client Service

Why lawyers don't seem to get it

Six Pricing Action Items from Buying Legal Council Procurement event

Posted in Client Service, Commentary, Pricing

Anyone who sells legal services to corporate America knows the important role procurement professionals play in the acquisition of legal services.  Dr. Silvia Hodges Silverstein leads the premier group for legal procurement, Buying Legal Council. The group allows procurement professionals to learn, from each other and from outsiders Silvia brings into group discussions.  The group also allows law firms to “listen in” on the procurement dialogue. Smart firms join so their proposals can reflect insights learned from the group.  In November, my partner Nicole Auerbach and I had the pleasure of leading a session at most recent Pricing Bootcamp.  We left the group with six pricing action items, and with Silvia’s approval, I wanted to share the list.

2016-11-03 Pricing Bootcamp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If you are interested in a copy this list of action items, please let me know.

Valorem Honored to be Named to 2017 BTI Consulting Client Service A-Team

Posted in Client Service, Commentary, Selection of counsel

BTI_Client_Service_A-Team_2017_A-Team

 

My Valorem colleagues and I are honored to have been named to the 2017 BTI Client Service A-Team.   This is our fifth consecutive year to have been named to the A-Team.

BTI’s identified the firms awarded this distinction based on over 330 in-depth interviews of General Counsels, direct reports to GCs and other key decision makers from organizations with average revenue of $13.8 billion and median revenue of $4.9 billion.

Valorem was recognized by clients in the following categories:

Commitment to Help

Client Focus

Providing Value for the Dollar

Meets Core Scope

Handles Problems

Helps Advise on Business Issues

Innovative Approach

This recognition validates the efforts we have been making to provide a level of client service that distinguishes us from others, and we are humbled by the recognition from our clients.  We will continue to strive to be worthy of this recognition.

Prevention Is The Answer To The Question of How Law Departments Can Do More With Less

Posted in Client Service, Commentary, Prevention

According to a survey of corporate counsel at large U.S. corporations reported by Law.com, nearly 70% of law departments expect their annual operating budget to be flat or decrease in 2017.

Let me say that again—nearly 70% of law departments expect that annual operating budget to be flat or decrease in 2017. And we know that, in the face of this challenge, law firms will respond by….wait for it….raising their hourly billing rates. Because that’s what firms do.  Every year. Of course, it does not take an advanced degree to see the incongruity between the clients’ needs and firms’ response.

To make this statistic even more sobering, consider this: the amount of work that must be done by law departments with static or shrinking budgets likely has increased, not decreased.  Why? Because the world is smaller, businesses expand their offerings and operating geography.  Because that’s what businesses do.  And when they do, the work for the law department increases.  So demand for legal services increases while the budget to purchase legal services does not not. This is not good for law firms, especially large ones.  Nor is it good for law departments.

Faced with this, 43% of law departments expect to decrease their overall use of outside counsel. This work will be redirected to law department attorneys.  And, to be sure, there will continue to be efforts to shift work from higher priced lawyers to less expensive ones. Law departments will employ legal operations professionals to help improve operating efficiency within the law department.

The broad range of tools to reduce costs so more work can be done for the same amount is laudable.  But it is not enough, because it it not sustainable.  Once an efficiency is obtained, more work will still require more resources.  After some point in time, the issue will not be efficiency, but the amount of work.

Because of this, leading General Counsel are focusing on prevention, how they can work with the parts of their enterprise that generate legal work to operate in a manner that requires less involvement of the law department or produces less work for the law department.  A simple example is that improved contracting can reduce the number of contract diputes that the law department must handle.  Prevention is the key for long-term sustainable success—instead of having to do more with less year in and year out, law departments would have to do less and therefore be able to invest the less they get more wisely, on issues that better serve the corporation’s interests.

How many law departments have a structured preventive law program?  For those that don’t, what are the reasons they don’t?  For those with a structured preventive law program, what metrics on effectiveness are tracked?

These are interesting questions, and I am not aware of any generally available data.  Jeff Carr, Nicole Auerbach and I are conducting a preventive law survey for inhouse counsel.  We encourage all in-house lawyers to participate.  The results will be shared publicly.

Is Prevention the Next Important Step in Law Department Development Evolution?

Posted in Prevention, Trends and Innovations

We created ValoremNext, in part, because we believe that prevention has to become the next focus for law departments.  More with less is now the New Normal, but there are finite limits on the ability to do more without more. But if legal problems can be avoided in the first place, the amount of more that must be done becomes less.

Even though prevention is an essential tool, there is scant data on whether law departments actually focus on prevention, and if they are, how so.  So, we’ve created a short survey we are asking people inside companies (not limited to just lawyers) to take to enlighten us. We know your time is valuable – it should not take more than 3-5 minutes to complete.  We will blog about the responses every few weeks.

Since more data will provide greater insights, please forward the link to the survey —www.surveymonkey.com/r/ValoremNextPreventiveLaw-HTB95DX to your social media followers/LinkedIn groups or directly to those you know who are in-house at other companies.

Consulting? A natural way to share the many lessons we’ve learned over the years.

Posted in Client Service, Client Surveys and Audits, Commentary, Hourly Rates and Alternatives, Marketing, Branding and Sales, Prevention, Trends and Innovations

Something interesting happened recently.  Jeff Carr, Nicole Auerbach and I consulted with a client about how to improve the law department’s performance and save money.  Shortly afterwards, Nicole and I consulted with a law firm about moving to alternative fee arrangements.  The interesting thing was that we found ourselves enjoying being consultants.  We found, in these two experiences, that we have a lot to offer.

This should not have been a surprise:  Valorem has been a classroom of sorts since we formed the firm in 2008. We learned from trial and error how to do alternative fees when there was no roadmap to guide us. We also figured out how to frame the national discussion about AFAs when no one was talking about anything but the billable hour. We learned how to divorce hours from pricing when most people to this day still use hours as the basis for calculating an alternative fee.  We learned that AFAs are just one of several tools necessary for a successful representation and delivery of exceptional client service.  You learn a lot in 9 years, and believe me, we’ve been drinking through a fire hose.

We are grateful that clients have responded so favorably. In 2016, Valorem was recognized as one of 22 law firms “Best At Delivering Alternative Fee Arrangements,” and has been recognized for the past four years as a member of the BTI Client Service A-Team. For the past two years, we have been recognized as one of the “Most Recommended (by clients) Law Firms.”  And I have been humbled to have been named a BTI Client Service All-Star MVP for the past four years.  We’ve learned a lot, but we also have put what we’ve learned into action.

We haven’t exactly kept most of the lessons we have learned a secret. I have shared my thinking on alternative fees in two books, and shared my thoughts on customer service and the delivery of value in this blog, which I started back in 2004.  And I have written extensively (with my friend Paul Lippe) about what we affectionately refer to as “the New Normal” in a column for the ABA Journal. These columns are soon to be released in book form. Jeff just started a blog, Life at the Speed of Prevention, that focuses on the enormous untapped value of preventing legal problems from occurring. Nicole, Jeff and I also speak regularly at various industry events across the country to share the lessons we’ve learned and our (often outspoken) views of the legal market.

In the past, though we’ve willingly helped others with their AFA programs or customer service initiatives, we drew the line at formal “consulting.”  But as we found ourselves enjoying the consulting experience, and as more people are asking us to devote more time to this aspect, we realized that maybe the line we had drawn in our minds was a bit artificial.  And one of the many good things about being in a small firm is the absence of rigid rules, or objection to changing them. So we’ve erased the line, and have officially launched a consulting practice for both companies and law firms on these broad topics (and anything in between):

 

For Law Departments:

  • Analyzing processes to identify and eliminate waste
  • Analyzing workflow to identify prevention opportunities—reducing work coming into the department at the front end
  • Alternative Fee Arrangements (training and structuring fees, making AFAs profitable)
  • Deploying tools to reduce total fees even if they are billed by the hour
  • After Action Assessments and programs to embed continuous improvement into the Department’s culture
  • Developing RFPs for AFA engagements
  • Deploying an low-cost arbitration program to address small cases that, in the aggregate, can add up
  • Designing prevention programs and helping departments see around the corner to know what’s coming

For Law Firms

  • Alternative Fee Arrangements (training and structuring fees, making AFAs profitable)
  • Firm culture audits to determine if the firm is customer-focused
  • After Action Assessments and programs to embed continuous improvement into the Firm’s culture
  • Responding to RFPs that address AFAs

Our goal is to help others go through the learning curve we experienced, but at an accelerated rate and without having to learn the hard lessons through actual experience.

So as they say in the consulting biz, if you have interest in any of these topics, please give us a call. We will customize the right program for you.

patrick.lamb@valoremlaw.com   nicole.auerbach@valoremlaw.com    jeffrey.carr@valoremnext.com

 

Moving at the Speed of Business

Posted in Uncategorized

Business moves fast.  Really fast.  Does your law firm keep up?

If you think you do, think again.  Do you think in days when your clients are operating in hours?  Weeks instead of days.  It is a rare law firm designed to move as quickly as clients often need them to move.

What are you planning to do about it?

Lead change or hang on for dear life

Posted in Commentary

Change is.  Years ago, many people debated whether the legal industry was changing.  Truth be told, the debate was silly.  Change is.  The only question is the speed of change.  It used to be slow.  It took years to move from fountain pens to ball point pens, from wet copy machines to dry, and so forth.  There was a day when FedEx was novel. Now change is fast.

So the question becomes how you confront the inevitability of change.  Do you study it, see it and lead it?  Or do you wait for it to happen and hope you can hang on and catch up?  Frankly, the latter seems a silly approach. Hope is never a good strategy.  Yet it somehow feels safe, so that is the most go.

Others have reasons for not trying to see the future–they know they have just a few more years before they don’t have to worry about it.  So they hope they can delay the impact of change for a few more years, and then ride off into the retirement sunset.  While that strategy might be good for them, it isn’t such a good approach for those in the firm who are younger.

The problem all lawyers who are not leading change face is that change is accelerating. That box that you’re reading these words on, and all the related technology, are making change accelerate.  But more importantly, because your clients are changing at a rapid rate (most business try to take advantage of change), the gap between you and your clients is widening.  And that is a really bad thing.

So the question every lawyer and every law firm must confront has been and remains: are you going to lead change or just hang on and hope?

“Be in the space you want to be in.”

Posted in Commentary

My friend John Chisholm sent me an article on why diversity programs in law firms are failing. (Talk about a small world–An Aussie sending an article from a Canadian publication to a guy in Chicago!)  The article includes this quote, from a Stanford Law White Paper:

These broader problems are complex and multifaceted, and have both structural dimensions—such as the impact on women lawyers of “conservative and rigid workplace structures,” including the billable hour and associated expectations of total availability, or the opacity of firm management—as well as societal and cultural dimensions, such as the influence of implicit and in-group biases on purportedly “meritocratic” systems. These problems also manifest themselves in a number of ways, and ultimately result in disproportionate impacts upon the retention and advancement of women lawyers.

My partner, Nicole Auerbach, spoke on this issue a few years ago (here short presentation is well worth watching), relaying some personal observations about how the billable hour, and systems built on billable hours, hurt her specifically and women generally.

We are long past debating whether a problem exists in the legal profession, particularly in BigLaw.  The question is what to do about it.

To suggest one possible answer, I’d like to relay some advice I received from a wise man.  I was at an event and found myself sitting next to Ted Sorenson, long a hero of mine given his contributions to President Kennedy, who my blue-collar, Irish-Catholic family revered when I was growing up.  In the course of discussing an issue I was having at a former law firm, Sorenson said “You need to decide whether you want to spend your time getting your firm to move toward the space you want to be in, or whether you want to be in the space you want to be in.”  For me, it was like getting hit in the head with a 2×4, and a year later, Valorem was born.  Ted, as he asked to be called, cautioned me that some people like the process of getting an institution to move, but went on to say that others simply wanted the outcome.  For me, I was tired of process and wanted to live in the land of results.

Why do I bring this story up?  What relevance does it have to the diversity problem facing law and BigLaw? Diverse lawyers need to decide whether the process of change, painfully slow and imperfect on the best of days, is acceptable. The alternative is to design a new platform, one that reflects your values and priorities.  For me, and for Nicole and our fellow founders, the joy of designing an new way of doing things, of having a firm built on our values, of controlling our future and having our fingerprints on a new way of doing things far surpasses the pluses that we walked away from when we decided we wanted to be in the space we wanted to be in.

After Ted Sorenson offered me his advice, I could only thank him for removing the shroud that had covered my mind’s eye and bring me a clarity of vision I had not had before.  Perhaps his advice can help others who want to be in the space they want to be in.

Solving the High Cost of Litigation, Valorem style

Posted in Commentary, Trends and Innovations

Litigation costs too much. Why? Because it is overburdened with process and tolerated but unnecessary excess.  And who benefits from the focus on process and needless discovery and motion practice? Lawyers.  Who designs the processes and rules for discovery?  Lawyers. And who benefits economically from this focus on rules and process? Lawyers.

Lawyers are the problem, not the solution.  While no solution is perfect and lawyers cannot be entirely eliminated from dispute resolution, it is possible to design a solution that gets to fair results quickly with drastically lower costs.

For small cases, much of the cost results from activity with little substantive impact and cases resolve based on the cost of prosecuting or defending the matter rather than on the merits of the dispute.  Parties negotiate from extremes, which makes resolution that much more difficult.

To take the lawyers out of the equation, as well as their costly focus on process and rules, ValoremNext has designed a simple arbitration solution for small cases. Founder Nicole Auerbach, a certified arbitrator, acts as a neutral, using this simplified approach which ensures resolution in under 60 days:

  1. The parties sign a simple agreement consenting to the Valorem Arbitration Program. 2. There is an initial conference, lasting only one hour, within a week after the agreement is signed.  Each party is represented by a business person, who is the party’s spokesman.  A lawyer may join to advise the client.
  2. In the initial conference, each side will explain its view of the dispute, and identify whether the other party has any information essential to a fair evaluation. Each party will also identify what documents it has to support its claims or defenses, including damages.
  3. The initial conference will end with an agreement or order on when each side is to produce its supporting documents and whether any other documents must be produced. There will be presumption against producing large volumes of documents and no fishing expeditions will be permitted.
  4. In the initial conference, the parties will agree or the arbitrator will decide whether a single, one-hour maximum deposition will be permitted by each side and who the deponent will be.
  5. Three weeks after the initial conference, the parties will submit a brief not exceeding 5 double spaced pages, laying out their claims or defenses and arguments for their position.
  6. Within 10 days, the parties will meet telephonically for the hearing. Each side will have 30 minutes to make its case to the arbitrator and the parties will answer any questions the arbitrator has.
  7. Within one hour of the conclusion of the hearing, each side must submit a confidential email to the arbitrator setting forth its proposed resolution.
  8. Within one day, the arbitrator will choose one of the two offers. There is no baby-splitting or compromise of the two submitted offers.  The decision will be announced by forwarding the accepted proposal to the parties with a brief explanation of what factors determined the acceptance of that position.  This explanation will not exceed two paragraphs.
  9. During the period the arbitrator is considering the matter, the parties may share their proposals with each other and attempt to work out a resolution.

The total time from signing the agreement to conclusion is less than 60 days.  The cost of the arbitration is $7500 or 7% of the amount at issue, whichever is greater.  Each party will pay 50% of the fee, unless the parties agree otherwise or a clause in an operative contract says otherwise.

With minimal lawyer involvement, the total expense per party on a $100,000 claim, including legal fees, should be under $5000.

This is a far cheaper and faster way to resolve a dispute than any existing option, and I tip my hat to my partner, Nicole Auerbach, for this client-focused approach. The details and needed documents for the program on available on Valorem’s website.

Clear writing makes a difference

Posted in Commentary, General

Clear writing makes a difference. For the skeptic, we now have proof. Using 50 readability measures, the study’s authors found that by a huge amount, a more readable, easy to understand brief is more likely to prevail over a less readable brief.

So what is clear writing? For me, it means avoiding adjectives. Adjectives are a poor substitute for facts or argument that compel the conclusion a writer seeks to convey when using adjectives.  Ditto adverbs,

It means avoiding pronouns when possible.  If a reader needs to look back to understand the person represented by the pronoun, the pronoun should not be used.

It means short sentences.

It means shorter paragraphs.

It means good topical sentences.

It means good headlines.

It means accuracy and fair representation of the content of quoted material.

It means using simple words, so your reader doesn’t need a dictionary to understand what you mean.

It means telling a story in a way that creates the image of events in the reader’s eye.

It means more, but these are good starting points.