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In Search of Perfect Client Service

Why lawyers don't seem to get it

The 4 stages of change.

Posted in Commentary, Hourly Rates and Alternatives

Richard Susskind wonderfully described the 4 stages of change:

Stage 1:  “What you’re saying is worthless nonsense.”

Stage 2:  “What you’re saying is an interesting but perverted point of view.”

Stage 3:  “What you’re saying is true but quite unimportant.”

Stage 4:  “I have always said so.”

There is truth in what Richard says, and if you think about it from the laggard’s perspective, he’s right.  But I received the latest issue of American Lawyer in the mail yesterday and it caused me to think about how Valorem has experienced these 4 stages.

Stage 1: It’s 2008. Valorem announces it will use alternative fee arrangements to bill its clients.

The reaction went just a bit beyond Susskind’s stage 1.











Stage 2: We get your point but no one cares.

No one cares










Stage 3: But that’s not how WE do it, so it is irrelevant.











Stage 4: Playing Catch Up

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With AmLaw now saying clients want non-hourly fee arrangements, you can bet on two things:

1)   Every firm will be saying they have been doing AFAs in a big way for decades.

2)   These same firms are scrambling to figure out how the heck they can do anything without reference to 6 minute increments.

Yes, we were crazy way back then. We still are.

Valorem Law Group’s Press Release regarding Jeff Carr

Posted in General, People, Places and Blawgs, Prevention

September 8, 2015                                                                                      FOR IMMEDIATE RELEASE

Iconic General Counsel Jeffrey Carr to Join Valorem Law Group

Chicago, IL – Jeffrey W. Carr, former General Counsel of Fortune Top 500 FMC Technologies, Inc. has joined the Valorem Law Group to lead ValoremNext, a platform designed to diminish the need for legal services by preventing problems before they occur. This concept builds on the approach Carr utilized with legendary success at FMC Technologies.

Carr is widely hailed as a preeminent thought leader and forward thinking General Counsel, having been a vocal advocate of the ACC Value Challenge and catalyst to reform the practice of law.

ValoremNext will be a key component of Valorem, a New Model law firm honored by BTI Consulting as a Client Service A-Team member for Valorem’s relentless focus on client service.

“I am very excited about joining Valorem,” said Carr. “The firm is one of the most forward-thinking firms I have encountered. They understand that the need to prevent a problem is critical to providing real value to clients,” he added. Drawing on his experience as a Fortune 500 General Counsel, Carr noted that “as businesses expand their geographic base, the demands on law departments to do more with less becomes acute, and the savings available from doing the same things better are not sustainable. The only sustainable savings can come from a program that prevents the demand for legal services in the first place.”

“This is a huge opportunity for Valorem,” said Patrick Lamb, one of the firm’s founders. “Jeff was a great client. He taught us that in-house counsel are most effective when they prevent fires rather than when they are trying to put them out. We’ve been committed to providing value to our clients since the firm was founded, and the opportunity to move toward the prevention platform was a natural step for us in providing greater value to our clients,” Lamb added.

In addition to developing the prevention platform and serving as the voice of the client, Carr will be instrumental in helping Valorem continue to innovate to bring value to the client. “We have developed a national reputation for client service and the use of alternative fee arrangements,” said Nicole Auerbach, another Valorem founding member. “The opportunity to work with Jeff to make even greater strides towards innovation and client service is an exciting one,” she added.

To introduce Jeff and the prevention practice to the in-house community, Valorem plans to offer one hour programs to in-house lawyers in Houston (October 28), Chicago (November 12), and Silicon Valley (November 17). Details will be posted on the firm’s website, www.valoremlaw.com before the end of September.

Valorem Law Group, which is comprised of big firm refugees, was created in 2008 to provide exceptional trial and litigation service to corporate clients, with a focus on fee arrangements that are not based on the hours billed, but the results achieved. Valorem has a special focus on client service and has repeatedly been named to the Client Service A-Team by BTI Consulting. With offices in Chicago and Silicon Valley, the firm maintains a national trial and litigation practice.

ValoremNext is a consulting practice that focuses on the “what next?” phase of corporate legal strategy — how to diminish legal spend by preventing the issues that traditionally have caused an impact on all phases of corporate life, including the bottom line. Spearheaded by former FMC Technologies General Counsel, Jeff Carr, ValoremNext focuses on prevention and best practices for legal departments globally.

For further information, please contact:

Patrick Lamb




Jeffrey Carr






Prevention: The next step in the (r)evolution of law

Posted in Client Service, Prevention

In the beginning, we solved problems but did so inefficiently and unpredictably. That was Old Law. Most clients don’t like Old Law because they are under budget and performance pressure.

Then we learned to be efficient and predict the cost of solving a problem. This was New Law. Most clients embraced New Law because it helped them with their budget and performance pressure.

The problem with solving problems efficiently and predictably is that there are diminishing returns. While there is always room for improvement, you get to a point where sustainable improvements are marginal at best. Herbert Stein famously said, “If something cannot go on forever, it will stop.” This truth is often stated as “Trends that can’t continue, won’t.” The trend of increasingly efficient handling of problems can’t continue.

Even as efficiency improvement wanes, law departments face growing demand on their resources. Businesses continue to grow, but law department budgets don’t. Businesses expand to new geographies and markets, but law departments don’t.

To do more with less, law departments must eliminate demands on their time, attention and resources. Ignoring problems is not an option.

It seems an intractable problem, but there is solution, and it is found in a lesson of aging.

When I was a child, there were childhood fights and I wanted to win those fights. As a person of age, I don’t want to win fights, I want to avoid them. Don’t get me wrong, some fights have to be fought. But fights should be fought because doing so furthers a strategic objective. Problems are just like fights: some can’t be avoided, but those that can be avoided, should be.

The answer to the growing problems law departments face is prevention. If we learn to prevent problems, we will be able to say”

Then we learned to prevent problems from starting in the first place. This is Next Law. It allows law departments to be strategic assets in the growth of the business, adding value instead of simply being a cost center.

What does Next Law entail? More on that soon.

Pushing work down to lower priced lawyers: why is that a good thing?

Posted in Commentary

This just caught my eye.

The data – some $18 billion in legal invoices – suggests the largest law firms have modified staffing models and reassigned IP litigation work to more junior partners in an effort at cost control.

Are we to believe that more junior partners are better lawyers than more senior lawyers?  This appears to be cost trumps outcome and experience.

The real question is why clients are willing to tolerate this deflection of work to less-experienced lawyers. Is this planned or an “after the fact” recognition of the increased role of more junior partners?  Better options exist, and my bet is clients will not accept the Hobson’s choice presented to lower legal spend.

The other critical question is whether work done by those with lower hourly rates actually lowers the client’s total spend.  Data historically shows this does not occur. Is same cost but work done by less experienced lawyers a good thing?

Take 2: A lesson from the healthcare industry

Posted in Client Service, Commentary

There are certain mistakes made by doctors or other healthcare professionals that result in the need for further treatment. An example is sponge that is left behind during surgery, which generally necessitates further surgery.  Insurance companies and government payors have determined that mistakes like these are easily avoided and refuse to pay for the second surgery.  This places tremendous pressure on hospitals to get it right the first time, every time.  Technology now can prevent these “left behinds.”

Fast forward.  I was just reading the case history of a matter where the plaintiff’s attorney improperly pleaded the jurisdictional basis for diversity jurisdiction because it failed to plead the citizenship and residence of the members of an LLC.  Pretty fundamental stuff.

Why should a client have to pay for this kind of avoidable error? It shouldn’t, and firms should have quality control processes in place to deal with these types of avoidable problems.

Valorem Law Group’s Why

Posted in Commentary

One of the most-watched TED talks is by Simon Sinek. Called “Start with Why,” Sinek compellingly argues that why an organization exists is more important to its success that what it does or how. Sinek offers Apple as an example, demonstrating its ability to enter and remake markets including music, MP3 players, cell phones and tablets, as well as desktops and laptops, is a function of the “us against the status quo” culture and brand that Apple thrived on since its inception. To follow Sinek’s “Golden Circle,” after you figure out why, you can focus on how and what.

Start with Why


(©Simon Sinek)  While this concept may not be familiar to many lawyers, many businesses embrace this concept. So do we.

My colleagues and I have spent a lot of time over the years talking through some of the layers of our why, but we recently delved to the core of the issue. It was the criminal trial of the leaders of the former Dewey LeBoeuf law firm and the commentary around it that finally helped us crystallize our collective thinking.

The criminal trial of the leaders of the failed Dewey firm has pulled back the curtain to reveal a profound level of corruption in one large law firm. The corruption may not be criminal, but the evidence is crystal clear that the firm was run to benefit a chosen few. While the trial is about a single firm, it is naïve to believe this level of self-centered-ness occurred in but one law firm. The commentary from informed observers and other former BigLaw leaders makes a compelling case that some degree of similar behavior pervades most large law firms in varying degrees. Some cases may not be as starkly selfish as Dewey, but  large law firms have become big businesses in their own right, and like other big businesses, the  success of the business is the paramount objective of those who run it. On limited occasions, the powerful may share benefits with others, though their motives for doing so are frequently selfish, not due to altruism or institutional devotion. But, by and large, firms are run by an elite club of insiders for their own benefit. Other partners are carried along for the ride, unable to alter the firm’s course or behavior.

To be fair, there are exceptions to this characterization, but, sadly, they appear to be rare exceptions. One lesson learned from this state of affairs is that, lip service aside, client well-being is irrelevant in most law firms. Clients are relevant insofar as they pay their bills on time and the firm may be able to extract more fees, but as between the firm’s business and the client’s business, the powerful managers in large firms have proven again and again their own business is the priority. The priorities are not in doubt.

Law firms’ institutional rejection of any semblance of client service is so embedded in the DNA of the legal establishment that no one even questions it. Clients don’t question it. They often are like passive victims, caught in a teller line during a bank hold-up. They may know exactly what is happening and they certainly don’t like it, but they feel like there isn’t anything they can do about it. They certainly don’t exercise the power of their wallet, except, perhaps, in the most egregious of cases.

Firms do not question their institutional abandonment of client service. It would be bad business to publicly admit this truth. So they don’t. They talk about “client focus” and “client service,” tossing around buzz words like loose change. The rhetoric was been so colored that firms do not see the problem even when trying to be candid. But when one focuses on behavior instead of rhetoric, the firms’ claims are revealed as mere hyperbole.

Countless examples prove that firms placing their own interests above clients’ interests has become part of the firms’ DNA: they just can’t change it without killing themselves. In no particular order, here are just a few:

1. Hourly billing
2. Bonuses based on hours
3. Compensation guarantees.
4. Compensation based on revenue rather than profit.
5. Compensation that ignores client satisfaction.
6. Large partner offices and high downtown rents.
7. Expensive artwork.
8. Mergers. And then justifying them by saying it helps clients.
9. Annual fee increases that have become self-righteous expectations.
10. High turnover of associates and income partners.
11. Putting all risk of failure on the client side.
12. A business model as unfriendly to clients as one can imagine.
13. Pressure to collect at year end for the firm’s benefit with no regard to how that practice helps or hurts the client.
14. Massive infrastructure and expansive numbers of offices that provide no value to most clients, but are paid for by all clients.

It is impossible to escape the conclusion that those who run large law firms have become “the Man,” doing things for themselves and the other powerful elite in their firms. In most firms, any semblance of equal treatment of partners has faded along with bygone eras. Even in the “good old days,” clients were merely a means to comfort and success.

My partners and I all practiced at firms run by one version or another of “the Man.” The challenge for each of us was what to do about it. Separately and without knowing it, we all had the same epiphany. We could not work for the Man any longer. Indeed, we had to challenge The Man and everything he stood for.

Although we did not rely on it for guidance, the Declaration of Independence provides this time-honored explanation that fits:

But when a long train of abuses and usurptations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

“It is their duty.” Powerful words. Those who are victims of the King had a duty to “throw off such Government.” While it would be silly to in any way equate the founding of the country with what goes on in law firms, the same general sentiment applies to those who wish to challenge “the Man.”

A Declaration of Law Firm Independence can lead to a civil war within firms, or it can yield the creation of new firms. Some new creations are smaller, kinder, gentler versions of the partners’ former firm. Others seek to make a new mark, to blaze a new trail. My partners and I believed the civil war could not be won, that the entrenched power in large law firm was so self-perpetuating that real change was not possible. So we opted to declare our independence, throw off such “Government,” and blaze a different trail and create something totally new, something totally focused on our clients.

The sole guiding principle for our creation was whether the design feature would work to our clients’ benefit. Only those features that passed this test became part of the Valorem foundation. We began with the 800 lb gorilla in every law firm: compensation. The “what’s in it for me?” question does more injury to clients than most can fathom. Highly skilled partners won’t work together to benefit the client because of the fight for credit. To avoid this, we agreed everyone would earn the same amount. There is nothing magical about this formula, but it entirely eliminates the “what’s in it for me” concern and replaces it with a how do we do more for our client so we can earn more for all of us. We call it the “rising tide (raises all boats)” compensation system. We’ve used this formula for seven years and it has cemented the culture of collaboration, of realizing that what’s best for us is what’s best for our clients. If we ever adopt a new system, it will have to sustain these underlying values.

Inexperienced lawyers do not add value for clients. We eliminated the concept of a large base of new associates. We hire a new associate every several years. We also did away with the notion of “up or out” so we can retain incredibly valuable colleagues who do great work for clients.

We focus on experience. Experienced lawyers are far more likely to get better results and do so efficiently, both of which are important to clients.

We stopped measuring hours.

We stopped using hours as a surrogate means of calculating an alternative fee.

We give our clients the right to change the amount due on a bill, in their total discretion, if they don’t think we delivered value. Not hours, value.

There is no “billing” or “origination” credit. We don’t debate about who gets credit for what. In an elite corps of lawyers, every job is critical

We have a portion of our fee held back on most matters to share risk in the outcome with our clients.

We provide exceptional service.

Clients must come first. Every aspect of a firm must be designed with this a guiding principle. If you compromise in any area, you will, sooner or later, become the Man. Clients deserve better.

So if you want to know our “why,” it is this:

We reject “the Man” and everything about the model he represents. We stand together to serve our clients and help them avoid any problem that can be prevented, successfully handle any problem that cannot, and learn from every encounter so we inspire continuous improvement.

It is that simple.

There is nothing about what we have done that any other group of lawyers could not do. But, so far, we’re not aware of others who have organized their business to institutionalize value for the firm’s clients. There is a reason that is so: it is not easy to believe that focusing on value for clients first and only will pay off as a business model.

Results of Valorem Survey of In-House Counsel on Hiring Priorities

Posted in Client Service, Selection of counsel

Valorem Law Group recently surveyed in-house counsel.  A huge thank-you to the 42 in-house lawyers who responded.

The question we asked was:

When making a decision to hire a law firm to handle a litigation matter that is NOT bet-the-company, which of the following values are the most important to you? (Please rank in order of importance, with and 13 being the least important).

Here are the results:

Survey Results













(double click on the image for a larger view)



We also received a number of helpful comments:

Since I’m in the patent space, the technical competence of the attorneys assigned. Additionally, firm diversity in the leadership is a consideration. Both are of high importance.

The ability to control costs or enter into alternative fee arrangements and the importance placed on those are case dependent. More important in smaller matters and less important in bet the company matters.

High – ensuring that in-house counsel is aware of any concerns that employees may bring to the attention of outside

The firm’s historical relationship with the company. (middle)

Just a comment. It strikes me that the order of importance changes depending on the case. Geography, for example, may be important in one case and not another.

I struggled to rank all of these items, because I have several “1’s” — and all of them are essential to a firm selection decision and I’d not want to compromise on any.

Language abilities would be high depending on client and geography

Diversity of the firm and the team proposed to handle the matter

Whether the lawyer/team is “known” to us–either through a first-hand recommendation/review by someone we trust, or through our prior dealings with the lawyer/team. (High) 2. The lawyer’s/team’s experience on a particular claim or legal issue–moving through the bulk of the learning curve, knowing the “market” for settlement values, understanding the underlying issues that become a fulcrum for settlement, etc. I suppose it’s a combination of “reputation” and “ability to achieve desired results” and “experience/quality”. (High)

I like to hire lawyers not firms

Quality of work product (high)

Once again, thank you to all who participated.


Posted in Commentary

Words matter. I have chosen mine poorly. I am here to correct my ways.

For the longest time, I have written critically of “BigLaw,” as if size itself was the problem. To be sure, most large law firms suffer from the problem, but so do many smaller law firms. The problem goes beyond size. The problem is about refusal to change. Some resist actively. Some resist passively. For others, resistance is passive-aggressive.   Jeff Carr has referred to the problem as “MPR—massive passive resistance.”

The resistance to change, however characterized, manifests itself in so many ways that even attempting to summarize them takes massive amounts of time, energy and space on the page. Doing so is not the point of this post. This post is just about words.

While BigLaw has developed the defacto meaning of being resistant to change, I think there is a better word. Paleolithic is defined as “denoting the early phase of the Stone Age, lasting about 2.5 million years, when primitive stone implements were used.” Paleo “is a combining form meaning ‘old’ or ‘ancient,’ …used in the formation of compound words.”

Introducing PaleoLaw. Regardless of size, firms and lawyers that refuse to acknowledge the amount and pace of change clients are experiencing and the robust impact change is having and, more importantly, should have on law are just stuck in the Stone Age.

PaleoLaw. Spread the word.