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In Search of Perfect Client Service

Why lawyers don't seem to get 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.


Some thoughts on the importance of word choices

Posted in Commentary, General

I feel like I am under assault.

From CNN:

Somebody else, who has never shown any regard for workers, has never fought on behalf of social justice issues … they don’t suddenly become a populist because they say something controversial in order to win votes,” Obama said. “That’s not a measure of populism. That’s nativism, or xenophobia, or worse. Or it’s just cynicism.

From Huffington Post:

Editor’s note: Donald Trump regularly incites political violence and is a serial liarrampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.

From a recent nomination for an innovation award (I was a judge):

Clients continually expect a more powerful value proposition from law firms. They want more for less. It’s not just about AFAs and creative pricing. It’s about a true partnership, one which transcends the provision of legal services to include a widespread offering of innovative tools founded on communication and collaboration to address specific pain points.

There are lots of articles about jargon.  Apparently, people don’t read them.

There are lots of articles advising people to use short, simple words. People ignore them at their peril.  Calling someone a xenophobe or a misogynist doesn’t hurt the target if the audience does not know what those words mean. Talking about populism or nativism doesn’t help a candidate or voters if people don’t know what those terms mean.

As for me, when I am reviewing award nominations, a nomination that sounds like it was written by a first year marketing student on steroids is going to start out behind the eight ball, er, with two strikes on it.  Or maybe it will start out behind the other submissions.


These hourly rates are breathtaking

Posted in Hourly Rates and Alternatives

Just read this:

MoFo, which submitted its first monthly fee statement earlier this week, is serving as special renewable energy counsel to the official committee of unsecured creditors. The firm is seeking $641,212 in compensation for work between April 29 and May 31.

MoFo’s attorneys billed more than 683 hours during that time period and charged a blended rate of $889 an hour.

Blended hourly rates of $889?  I couldn’t say that to a client with a straight face.

“It’s just $10 an hour.” Not quite.

Posted in Client Service, Commentary

I was having lunch with a friend a few days ago and we started talking about the legal industry’s move to pay starting lawyers $180,000 a year. Plus benefits.  To me, salaries of this kind are the product of the criminally insane, but my friend said, “it’s only $10 an hour.”  I knew what he meant. If an associate works 2000 hours a year, a generally accepted target, the $20,000 increase is paid for by charging $10 more for each of those hours.  That is, charging a client $10 an hour more.

That doesn’t sound too bad at all.

But I asked my friend to think about that from the client’s perspective.  Let’s say the client pays a firm $2 million per year in associate time. At large firms, this is a modest to small client. If the average hourly rate for all associates is $400 (which is a low estimate), the client pays for 5,000 associate hours per year. This means that without more, the client is paying $50,000 more each year for no increase in value.

And then I asked my friend if he had ever heard of firms raising their hourly rates only $10 per hour, and he acknowledged that he had not.  Even during dark times, firms would raise rates 2-3%.  But normally, firms aim for at least 5%. To put that in perspective, a 5% increase on $400 per hour is $20 per hour. So the client is paying $100,000 per year for no increase in value.

When I asked my friend how he thought his clients would feel about that, he hung his head and said “that’s not how we think about it.”

The problem is thus defined.

The myth of bigger as a strategy

Posted in Client Service, Commentary, General

Seth Godin had an insightful post in his blog today, Bigger for?. He writes about the pains of checking into a huge hotel, where no one knows your name, there is always a line at check-in and the gym is full at 5 in the morning. Bigger helps the owner make more profit (at least the owner thinks it will make more profit), but it does little for the customer.

Law firms that merge always say the merger is in the best interest of their clients.  “Bigger platform” is a phrase you frequently hear.  But I have never heard, or even heard of, a client saying that they thought the merger or acquisition was in their best interest.

For clients, bigger law firms mean more conflicts, less flexibility in fee structures or other steps that provide real value to the client. It means even greater cross-selling (“let me introduce to my new partner–pssst, what’s your name–er, George, who is the greatest lawyer in the world in—pssst, what’s your practice area–, er, Tanzanian wildlife restoration”).  Clients thrive when law firms design around the client, not from size. Size is an obstacle to being able to design around the client.


Valorem recognized as one of the best at delivering Alternative Fee Arrangements

Posted in Client Service, Hourly Rates and Alternatives

Last week, BTI Consulting reported that alternative fee arrangements have “soared to an all time high,” noting that AFAs generated savings of nearly 14%, or an average of $2.7 million for law departments.   These savings are significant, but as I have often said, much greater savings are possible if AFAs are deployed with other important tools.

As part of BTI’s research to develop the data on AFAs, BTI identified 22 law firms that are “best at delivering Alternative Fee Arrangements.”  The 22 firms were identified by corporate counsel “in an unprompted manner.” Here is how BTI described the 22:

Clients identify 22 of the 650 law firms serving Fortune 1000 and large clients as absolutely best at developing and implementing alternative fee arrangements. Clients share 6 reasons these firms stand out:

  1. Partners have authority to enter an AFA quickly. These partners do not have to wait for committee meetings or partner reviews of agreements. The negotiating partner also knows the parameters the firm will accept and approval is all but assured, and swift.

  2. Confidence, comfort and enthusiasm in pursuit of the AFA. The firm’s enthusiasm and commitment to AFAs is contagious.

  3. Flexibility. The firms who stand out listen to the objectives and offer to change the approach as the objectives evolve and are agreed upon by all concerned.

  4. Willing to take some risk. The outstanding AFA firms have convinced clients they have skin in the game. Clients love the idea of risk sharing they can see and understand.

  5. Focused and efficient. The firms have learned to make a beeline for the client’s goal. Much of the strategizing and planning has been done as the fee is negotiated—and clients see their law firms operating like an Olympic swimmer—no wasted strokes.

  6. Stick to the agreement and never complain. The law firms don’t go back and ask for changes and live with whatever outcomes occur. Apparently many law firms ask for changes when things don’t go well—the best don’t. And the best have tight project controls to ensure they don’t need to ask.


Here are the 22:

Law Firms Best at Delivering Alternative Fee Arrangements:

Armstrong Teasdale
Baker Botts
Bartlit Beck Herman Palenchar & Scott
Blake, Cassels & Graydon
Covington & Burling
Fish & Richardson
Foley & Lardner
Husch Blackwell
Kirkland & Ellis
Lee Tran & Liang
Littler Mendelson
Morgan Lewis
Orrick, Herrington & Sutcliffe
Quarles & Brady
Schwartz & Ballen
Seyfarth Shaw
Simmons & Simmons
Thompson Hine
Valorem Law Group
Wilson Sonsini Goodrich & Rosati



We feel pretty good today, thrilled to be in such elite company, one of the 3% of the 650 firms to be recognized by the clients we are so fortunate to partner with. This recognition is particularly satisfying given the incredible leap of faith we took 8 years ago to build a new firm model to deliver AFAs that work for clients while providing unwavering client service in the process. We look forward to continuing the leap.