I was born in Detroit and grew up in the heyday of the auto industry. So, when I first heard Ron Baker speak about Lee Iacocca, I listened with great interest. Iacocca was a Detroit icon, first for his trailblazing work for Ford and later for saving Chrysler. Ron set the stage: Chevrolet had created the Corvette. It was very expensive, relatively, but it was the first real sports car.  Ford needed to challenge it. Iacocca came up with the idea of the Ford Mustang. Baker picks up the story in The Firm of The Future: 

When Lee Iacocca developed the Ford Mustang, he reversed the order of the usual car-making pricing up to that point. Rather than giving his engineers carte blanche to develop a sports car and then marking up the resulting costs—as GM did [with the Corvette]—he solicited the opinions of potential customers as to what features they would want in a sports car and what price they thought they would be willing to pay. He then went to his engineers and asked if they could manufacture a sports car with the desired features and sell it at this price and still turn a profit for Ford. The engineers developed the Ford Mustang (based on the platform of the existing Falcon), and it was launched in April 1964 at a price of $2,368. In its first two years, net profits were $1.1 billion, in 1964 dollars, far in excess of what GM had made on the Corvette.

This form of pricing is known as price-led costing. It has been widely used by many businesses. But not law. That needs to change.  Read the quoted paragraph and substitute the “lawyer” for “engineer” and “handle a matter” for “develop a sports car.” There is the germ of really important idea in this concept, and I’d like to play it out in the setting of a law department getting a new matter, say a lawsuit, though this approach works for any issue.

A new lawsuit is served on the company. The first reading makes it clear that the pleading is defective, but the defect is curable. The complaint is also filed in the wrong state. It is a garden variety claim that poses no material risk to the company.  In other words, it has “routine” written all over it. The law department, like all other parts of the business is under orders to cut costs.  So, what does the inhouse lawyer do?

One possible response is the typical one. The inhouse lawyer sends the case to an outside lawyer, who analyzes the claim and recommends filing a motion to transfer the case to the right state (meaning the case is in Federal Court) and to simultaneously file a motion to dismiss because of the defect in the complaint.  Based on counsel’s recommendation, that plan is approved. Two motions are briefed and argued, the matter is transferred, the complaint is dismissed and an amended complaint filed that cures the defect.  Back to square one, with a 5-figure fee already incurred.

Or there is this alternative. The inhouse lawyer, realizing the features of the case, calls an outside lawyer and says “I want this case permanently dismissed or more likely settled and I won’t spend more than $25,000.”  Stop here: would the lawyers recommend the same plan as in the typical scenario?  Of course not. The 5-figures spent on the two motions is almost certain to have had no impact on the outcome. Here’s how it would play out: The lawyer’s first step would be to determine the Expected Value of the case, based on information available at that time. That analysis would be submitted for approval to the inhouse lawyer. Once approved, the lawyer would develop an approach to get to resolution because dismissal on the merits was unlikely.  The lawyer may decide to file some limited, targeted discovery requests. Or not. The lawyer may call the plaintiff’s lawyer and initiate dialogue to lead to resolution.

The point of this is not to decide which strategy the lawyer should follow. The point, instead, is to identify a different approach to pricing that can be highly effective for many matters. It forces the lawyer to ask “what difference does it make to the outcome?” for every step, every action.  And if the answer is “none,” then not performing the step should be proposed to the inhouse lawyer who should approve it if she concurs in the analysis.

I’ll end with a personal story to reinforce the point.  My wife and I had purchased a piece of property on the Lake Michigan lakefront. We wanted a weekend getaway.  We had a budget. The architect designed first and presented us the design, which we loved. When we asked about the price, he then got estimates from 3 builders. The best price was twice our budget. Needless to say, that design was scrapped and we went to the builders and said, “what can you build within our budget?”  The house we ended up with was simple, functional and like the style of other homes in the area.  We didn’t get everything the architect tried to sell us, but what we got was perfect given our budget.

The Next Normal is going to force law departments to look at pricing and matter handling much differently than we have until now.

The Next Normal is also going to require law departments to ask whether a matter even requires a lawyer at all. That will be discussed in my next segment.

 

Posts in this series:

The Next Normal

The Next Normal: Law Departments Learn to Prioritize Spend Based on Fundamental Investment Analysis

Every day, businesses prioritize. They invest in one thing, not another. They fix one problem, but defer fixing another. The build one facility, but not another. They pursue one strategy to the exclusion of others. These decisions are almost always made based on some form of return-on-investment or cost-benefit analysis.  ROI is coin-of-the-realm for operating a business.

Except in law.  At least until now.

Most law departments now operate in a world where they must budget. But the sophistication of the budgeting process varies considerably.  But even the most sophisticated tend to look at cases as similar cost items, rarely making anything other than the most generalized prioritization decisions (“yes, this bet-the-company piece of litigation requires a larger budget than does this routine employment case”).  This rudimentary approach to budgeting is almost certainly going to be a casualty of the recession caused by the coronavirus.

This conclusion begets the question what will the future of law department budgeting be?

We must begin with the proposition that no law department has a budget that allows it to spend unlimited amounts on all of the matters for which it is responsible. That proposition is destined to become even more profound as businesses grapple with the global economic fallout of the coronavirus crisis, which is predicted to be profound. According to Fortune (2020-03-23):

            Morgan Stanley and Goldman Sachs Group Inc. economists said the coronavirus will inflict greater economic pain than they previously expected as they warned of a record plunge in the U.S. output in the second quarter and a deeper global recession.

Morgan Stanley’s U.S. economists led by Ellen Zentner told clients in a report on Sunday that they now see American gross domestic product falling 30.1% in April-June. That will drive up unemployment to average 12.8% over the period, they said.

At Goldman Sachs, Jan Hatzius’s team said in a report that they now expect the world economy to contract about 1% this year, which would be a bigger decline than even that witnessed in 2009 amid the financial crisis. They were already projecting a 24% drop in U.S. output in the next quarter.

These numbers are staggering. There will be demands on every department in every organization to cut costs, and the amount to be cut will be material. So, having to do the same with much less (even though everyone knows demand on legal is likely to increase as a result of corona-related issues) will necessitate a need to engage in a disciplined prioritization process to allocate scarce resources.

There are several concepts that most of us are familiar with—return on investment (ROI), expected value (EV); sunk costs; opportunity cost; cost of doing nothing; strategic value; and risk. Each of these concepts plays a role in determining how spend should be prioritized.

Let’s define the concepts, which apply to every matter handled by the law department, whether by internal or external team members, and regardless of subject matter:

Risk to the company: how and how much is the company hurt by a negative outcome. Is the outcome necessary for the company to achieve a strategic outcome?  In other words, is this matter something to really care about. Determining the worst outcome and scoring it in relation to its probability of occurring.

Expected Value:  Based on knowledge available at the time of the estimate, what is the estimated cost or benefit to the company of the outcome.

Sunk Costs: sunk costs are amounts already spent on a matter. In determining priorities, these are to be ignored.

Opportunity Cost: what benefits and opportunities will we not be able to take advantage of if we allocate resources to a particular area.  An example would be allocating resources to handle matters A and B will prevent us from investing in matter management and e-billing software that is estimated to reduce the amount of our external legal spend by 10%.

Cost of doing nothing: literally what it means. An example is what is the increase in the expected value of Matter A if we do not take any depositions?  This concept capsulizes the answers to the question “what difference does X make to the outcome?”, which should be asked on every task on every matter.

Strategic Value: Is this matter core to our business, does it raise reputational issues, or for some other reason justify special treatment unrelated to the basic economic analysis.

Return on investment: What is the predicted change in EV if scarce resources are allocated to this matter? A simple example would be I could allocate $100,000 to a matter with a negative (loss) EV of $1,000,000 with a prediction that the $100,000 investment would lower the EV to $800,000. This represents a 100% return. If the alternative was to invest $10,000 into 10 matters which each had an EV of $100,000, and the prediction was that the investment would lower the negative EV (loss) to $70,000 in each case, the savings to EV would be $300,000, representing a 200% return.

Few law departments currently require Expected Values to be created, and certainly not at the outset of cases. Outside lawyers recoil at the notion of predicting an outcome based on such incomplete knowledge. The truth, however, is that there is always ample basis for developing an EV. The lawyer’s experience, informing her that cases like this are very hard to win in a given jurisdiction allows a basis for a more informed estimate of EV than the alternative, a coin flip. One can determine the reported outcome of similar types of cases. While this information ignores private settlements, it is a useful input. And so on.  The process will yield an outcome that is most likely inaccurate, but is directionally correct.  And that expected degree of inaccuracy, while accepted as normal in business, drives lawyers crazy.

Businesses operate with a high level of uncertainty. Decisions are made based on limited information, because the decision has to be made and there is either no time or no capability to obtain more robust information. Law departments will be forced to learn to operate in the same uncertain environment the rest of the company routinely operates. Just like there are unknowns in investing your IRA, there are unknowns here.  That does not, however, reduce the value of the investment exercise. The act of creating Expected Values forces a discipline in resource allocation that otherwise is impossible to achieve.

There is, to be sure, no ready formula to plug into a spreadsheet.  Each of these items needs to be weighted in accordance with the Company’s manner of operating.  But this approach produces principled basis for determining which matters merit investment and which ones should be handled without any or all the needed investment.

In the next of this series of posts, I will address the concept of determining how to handle a matter on which investment is limited.

Prior posts in this series:

The Next Normal

 

From 2010 until 2016, I was a columnist for the online ABA Journal’s The New Normal column.  I was invited to start the column as a result of the creation of Valorem Law Group in 2008.  We started a law firm just before the Great Recession and because of the novel model and approach, we thrived because of the Recession.  We pioneered and shaped the significant changes that were to become an eventuality as the New Normal. The term stuck.

The New Normal is now over. I write this post from my home office, joining workers from across the country, from many industries, who are sheltering in place. In our homes, we wonder how long before we return to our offices, how long before things return to normal. Some things will return to normal. We will again dine in restaurants or have a beer with friends in a pub. The commuter trains will carry commuters instead of looking like ghost cars.  People will return to their offices.

But not everything will return to normal. The economic shock and after-shocks of the coronavirus crisis will be profound, global and long-lasting.  Already businesses are feeling the pain and we are just weeks into a crisis that will last much longer.  Even when the health crisis abates, businesses will find it difficult to return to normal. Supply chains will have been disrupted and may not be easily rebuilt. Customer demand will have been eviscerated. Some businesses will be in bankruptcy. Others simply will have closed. Each of these is a pebble that creates a ripple, and these many ripples cross each other in ways we cannot possible know.

But even though much of the future is unknown, there are things that are certain.  There is a future.  This crisis will end. The road to the future will be strewn with debris and those businesses that emerge will be different. What will be normal after the crisis will not be what was normal before.  Among the things we know will be true are some things about law departments, the businesses they serve, and the law companies and law firms that serve them. Law departments will be different than they are today. They have to be; the businesses they serve will be different. Change is certain.

When change is certain, there are only two fundamental responses.  One is to wait and see what the change is, to wait to see what becomes certain. And then, once you know where things have gone, to attempt to adjust quickly to the new.  That is how most respond to change. It is a fine strategy if you believe hope is a good strategy. The strategy of hoping you can adapt to the new terrain quickly enough to survive the fall-out that comes from not already being in the new place may work for some but it tends to fail for most.  That is why the truism “hope is not a strategy” is so widely known. The other strategy is to try to shape the change, to lead it, to prepare for it. Sure, you might have to make a course correction along the way, but such course corrections tend to be minor, like changing from the center lane to the left lane while operating at speed.  That maneuver is much easier to execute than trying to start from a dead stop and merge into a highway full of vehicles moving at warp speed. Those that try to shape change usually do, and they thrive.

There is a great deal to think about as one begins planning for the future and executing the changes needed to shape it.  Now is the time for those discussions–everyone needs to walk and chew gum at the same time in this crisis. In the next several posts, I will identify a number of things law departments and those that serve law departments should be thinking about now to prepare for The Next Normal.

The goal of this series of posts is to generate discussion. Working together–dare I say, collaborating–we can accomplish great things in The Next Normal.

 

You know what happens when a rubberband is stretched too far. It snaps. The surge in just the past week is stretching many law departments. And there is more to come.

To recap. In the past few days, SXSW canceled the iconic tech and music festival. Facebook canceled its annual F8 Developers Conference. Google canceled its Cloud Next Conference. TED canceled its TED2020 conference. The Ultra Music Festival has been canceled. Some sporting events are being played without spectators.  Schools have converted classes to online only.  Many businesses have canceled large or company-wide meetings. Many tourist attractions in Italy, Japan, China and other countries have been closed. The list of events, meetings, and attractions canceled or closed is expected to continue to grow.

The cancellation of events does not even begin to address the economic impact of the virus. Apple announced it would not meet its current quarter revenue projections. Fortune magazine reports that “[a]ccording to Amenity Analytics, a natural language processing company, references to “coronavirus” have been made over 8,000 times across over 1,000 companies on earnings call transcripts, as of Feb. 26.” Major stock indexes have declined as much as 12% since their high on February 19.

The virus is hitting something even closer to home for many business–their supply chains. And disruption of supply chains often results in failure to meet sales obligations.

I could go on, but I don’t think anyone believes that, health risks aside, the coronavirus is not a significant threat to businesses.  There is going to be a lot of new, virus-driven and virus-related work that will end up with law departments.  Force majeure will go from drafting afterthought to a clause discussed in boardrooms. HR departments will need to be advised on policies regarding health and safety.  There will be negotiations with suppliers and also with purchasers. Calls may pour in. Some companies will need to have their in-house teams pay close attention to virus-related issues, meaning other work does not get done. Some issues are not manpower issues, but data-extraction issues–how many contracts of a certain type has the company entered?

Each business will have its own set of problems.  While some of the problems are not legal ones per se, most have at least a legal element or feel like they are legal.  When no one else is equipped to handle problems that require multi-disciplinary talents, most businesses send those problems to the law department; the law department that already, in all likelihood, is at capacity or stretched thin with inadequate budgetary resources.  The challenge will be daunting.

This need for multi-disciplinary resources to provide solutions to customers’ business problems is precisely why Nicole Aurebach and I took the lessons we had learned as founders of Valorem Law Group and joined Elevate Services and created ElevateNext Law just about two years ago. The heavy lifting of data extraction from contracts (just how many of these contracts do we have?) isn’t effectively handled by lawyers. Such tasks can be handled more effectively and faster by a computer. Are temporary resources needed to analyze contracts to identify recourse if suppliers can’t ship their product to us? Are we being flooded by inquiries who have bought something from us that we may not deliver? Traditional law firms might provide an answer to some of these questions, but we joined Elevate because it has the depth of resources to help customers solve their business problems.

If we can help, contact us.

Heck of a title for a post about litigation, isn’t it?  Bear with me for a few paragraphs and my point will be clear.  I promise.

Before I go further, ask yourself why you don’t outsource problem solving for your own problems.  Have you ever thought about going up to a random stranger and asking her to solve a dispute you are having with another person?  Would you feel better about crowd-sourcing the solution, asking, say, 12 people to come to a consensus about how to solve your personal dispute?

Think about these questions from the standpoint of a General Counsel.  Would it be a good career move to suggest to your CEO that you get a resolution to a business dispute by going to a random street corner and asking a passerby to solve your corporate business problem?  Would it be a better career move to crowd-source the solution to 12 random strangers?  I once asked a room full of General Counsel how many would want to make either proposal to their CEO. Not surprisingly, not a single hand appeared.

At this point, most are likely to agree that the random stranger and crowd-sourcing solutions are not wise approaches to dispute resolution.  Yet that is exactly how many business disputes are solved. Except the random stranger wears a black robe is referred to as “Your Honor,” and the crowd is called a jury.  Every B2B lawsuit represents a decision to outsource the solution to a business problem.

I have been a litigator for 37 years.  I tried my first case two days after being admitted to the bar, and, to this day, not much rivals the feeling of cross-examining a witness or making a closing argument to a jury.  With that, I feel comfortable suggesting that the outsourcing of solutioning for business disputes is a business failure, the abandonment of the hard work of finding a suitable solution because it is easier to “give it to the lawyers.”  Lawyers need to learn how to say “no, it’s your problem, not mine.”

In The One Minute Manager Meets the Monkey, Kenneth Blanchard and William Oncken describe the standard business practice of taking the monkey off of my back and putting it on yours.  “Hey, Mary, can you help me with this problem?” is the request to let me take the monkey off my back. “Sure, Bob, happy to help” is the agreement to take the monkey.  The transfer of the monkey is accomplished.

And so, it happens in most corporations.  Bob is trying to resolve a dispute with a difficult customer and asks Mary, the General Counsel, to take the monkey off his back.  The dispute is now Mary’s to deal with.  Bob moves on to other things.  And he is in the catbird seat to be critical if the resolution is not as good as he believes should occur.

The same is true when a lawsuit is filed — “well, it’s a lawsuit so I have to send it to Legal.”  Knowing that “sending it to Legal” is always an option makes reaching an agreement with the other party less urgent.  You can always just say “they were unreasonable, so it ended up in litigation.”  That excuse, it seems, has become acceptable.  It is the veneer used to disguise the use of outsourcing and crowd-sourcing as the means to resolve a dispute.  The unacceptable, when disguised, is suddenly acceptable.

In the abstract, people know the waste and futility of litigation.  Lots (and lots) of legal fees.  E-discovery has become a license to print money, and disputes about process frequently overwhelm the true dispute between the parties. Litigation consumes an important and limited resource—executive time.  Lawyers don’t know what happened.  We have to learn by talking to the people who were involved—business people.  When business people are helping the lawyers, they are not doing their actual jobs.

The real world always intervenes.  Litigation takes time, sometimes years.  People get promoted or leave the company.  Priorities change.  Suddenly the business dispute is now getting in the way, but the sunk costs limit resolution opportunities.  And the lawyer who accepted the monkey feels pressure to achieve an outcome judged to be acceptable by someone who frequently has no real insight into the original dispute.

The formulae for this view of litigation are simple. Disputes ≠ litigation. Diputes ≠ litigator. Fast > slow. Resolved > not.

So, back to the title, the famous quote by Prussian General Carl von Clausewitz.  That which was obvious to von Clausewitz is just as obvious with respect to B2B litigation.  But, let’s face it, “B2B Litigation is the Continuation of Business by Other Means” doesn’t have the same power as the title of a blog post.  But this take-off is just as true as von Clausewitz’ original utterance.

If litigation is just a continuation of business by other means, it is other means that are slower, more expensive and less certain that the alternative of early resolution. Particularly in the face is growing demand for already limited resources, modern General Counsel are going to have to create an institutional expectation that business monkeys will not be accepted.  Business people need to resolve disputes in which they are involved.  A dispute is not any different than any other business issue where negotiations and compromise are the order of the day.

Forcing business people to deal with their own monkeys is not the same as throwing them into the deep end without a lifeguard.  Richard and Daniel Susskind, in their book, The Future of Professions, write about the transition of lawyers from “sage on the stage” to “guide on the side.”  Acting as an advisor, a counselor, is a role where lawyers can add great value. It is a role many General Counsel play on a wide array of issues, some legal and some not.  But being a counselor is far removed from being a litigator.

Here’s my prediction for a company that determines that “the business” is responsible for cleaning up its own messes and lawyers adapt to the counselor role. There will be fewer messes.  Quality will improve.  People will do things right the first time. Contracts (and thus performance expectations) will become clearer and simpler—people will insist on clarity and simplicity so they know what is expected of their operation.  All positive things.

This is the biggest lesson from 37 years in the trenches.  Please, put me out of business.

Earlier this year, I changed the name of this blog from In Search of Perfect Client Service to In Search of Great Customer Experiences. I explained the reasons, but I glossed over the change from client service to customer experience.  Recently, I was challenged to explain why clients were no longer clients, but instead “mere customers.”  This is my response to that challenge.

Client is defined as a person (or entity) who uses the professional advice or services of another.  So, for lawyers, ABC company is a client, but for an IT vendor, ABC is a customer?  The example illustrates that the term client or customer does not result from the customer’s nature, but from the seller’s.  In other words, lawyers are special.

But they’re not.  Lawyers live in a parallel universe that my friend (and customer) Jeff Carr refers to as “Lawland.” Candyland, but without the fun.  Lawland is the place where lawyers are special, non-lawyers merit no consideration, and the traditional rules of math, business and physics do not apply. It is not the real world, to be sure.

So strike one for client. It perpetuates a stereotype that deserves a rapid and permanent death.

Strike two is that the line between law and the rest of the world is becoming hazy at best.  Effective solutions today tend to be multi-disciplinary. The best teams involve far more that simply lawyers, and there is no reason why the language of lawyers trumps the language those dreaded non-lawyers, I mean people who live in the real world employ in their business dealings.

The last issue , aka strike 3, is that lawyers have abandoned the entire experience arena. Whether we call it client experience or customer experience, lawyers tend to suck at providing great experiences.  The rest of the business world has recognized that customer experience is the key to having customers (or clients) in the 21st century.  I choose to use the language of those leading the path in providing great experiences for buyers of services and goods.

Where I come from, strike 3 means you’re out.  And that is why this blog is about Great Customer Experiences.

On Friday, I participated in an exchange of tweets with @adamdavidlong, @DBRodriguez, @RoninMikeSimon and @ronfriedmann about the importance (or lack of) of outside investment in law firms.  I weighed in with a note that having linked up with @ElevateServices and founded its aligned law firm, @ElevateNextLaw, we (@ElevateNic and I) were evidence that lawyers could work closely with business professionals, data scientists, tech developers and other lawyers to accomplish great things.  Ron Friedmann suggested I blog about this, and so here goes.

The backdrop to this discussion is ABA Model Rule 5.4(b), which famously prevents any “nonlawyer” from maintaining an ownership interest “if any of the activities of the partnership consist of the practice of law.”  This ownership restriction has been largely eliminated in Canada, the United Kingdom and Australia, among other places.  The substantial cost of technology development combined with the acceleration of the role of technology in law has magnified the focus on Rule 5.4 and whether it is a good or bad thing.

Much has been written about the need for access to capital for technology investment to compete in the legal sector, and I will not recount that body of literature here.  Instead, I will share the decision-making that my Valorem and ElevateNext Law partner, Nicole Auerbach, and I went through.

Nicole and I were comfortable being “different.”  We had started Valorem Law Group in 2008, just before the “great reset.”  Our commitment to value billing instead of hourly billing resonated with in-house counsel and our practice grew. But only to a point. Our size allowed us to take a case or two from major customers, but not to make a dent in their universe.  We often were asked to take a case to show a customer’s other firms that “it could be done.”

We were still playing at the periphery for many of our customers, however, and we both wanted to make more of a dent. We analyzed what held us back.  At the same time, we analyzed what was happening in the market and saw that lines were blurring and focus was shifting to systems and processes that reduced the demands a given business placed on its law department. This focus on demand reduction was an inevitable outcome: it was the logical next step in the “do more with less” challenge most law departments continued to face even after years of efforts to “cut the fat.”

The blurring of the lines issues was a bit more nuanced.  As law departments sought to reduce demand created by business units, the working relationship between the law department and those business units was growing closer. The lines between “us” and “them” were blurring as more businesses were learning to operate as a single team. The challenge Valorem, and every other law firm, faced was how to assist in the seamless integration of law departments into the business.  After all, if the integration was effective, there would be fewer lawsuits and less work for Valorem.

We addressed this issue in a “if money was not an issue” exercise.  We knew we needed to be bigger so we could operate at a scale that could make a dent.  We recognized that law in general was headed toward being more data driven, so we not only would need access to data but we would need expertise in discerning the value of various types of data.  We could try to buy access to data with capital, but better yet would be to have systems that collected data to use to create value.  Thus, not only data, but tech also would be key.

As we surveyed the tech landscape, it appeared to us to be highly fragmented, with lots of companies taking narrow slices of the tech “pie” and developing solutions to problems that most people did not have or would not want to have to sign on to a new system to address.  In other words, most tech companies in our analysis were not customer friendly—they were tech people trying to make a new toy without thought on how people would use it.

At this point in our analysis, we circled back to the reality created by the need for money to access tech and related expertise. We recognized the need to join forces with an entity that had the attributes we noted above. But when you start thinking about “joining forces” with someone, the issues of values, principles and “why” all become central, not to mention the inevitable change from total freedom to having to operate under someone else’s rules.

This isn’t the place to describe the vetting process we went through that lead us to Elevate Services, but we aligned almost perfectly in terms of our “why” (make a dent in the legal universe), our values and our belief in where the legal world was going. Plus, while I don’t have a lot of experience in large businesses, I believe it would be hard to find a better group of people.

The choice of Elevate checked off all of our boxes.  Tech. A focus on results, not hours. A belief that the focus needs to be on the customer’s business, not some other metric. A belief that we need to prevent problems from occurring, and a belief we need to use reduce the friction between “legal” and “business” and collaborate to control risk but accelerate business outcomes.

Frankly, the “how” we accomplished this in light of Model Rule 5.4 was fairly simple.  Companies with aligned law firms, like Clearspire, provided a path.  ElevateNext Law is a standalone law firm.  Nicole and I are the two owners of the firm.  The other partners are akin to income partners in traditional law firms. Nicole and I are also employees of Elevate and part of its Executive Management Team.  The long-term value play for us is not our ElevateNext compensation but growing the value of our Elevate stock.  We accomplish that by working seamlessly for our customers. The value for us is the size, additional skill sets, technology and global reach Elevate offers. The value for Elevate is that work is traditionally had to turn down because it did and might involve the restricted practice of law is now work it can handle in partnership with ElevateNext.

The key to this relationship is that the business, not the law firm, is at the center of the relationship. It won’t work the other way, and that is why traditional law firms, especially large law firms, will not follow this path.  Entrepreneurial firms, like Atrium, will follow the same or similar path.  The question tech companies and tech investors will be forced to answer is whether they can stand alone rather than create an Elevate Services-ElevateNext Law type of relationship. Both parts are essential to solving the most perplexing business problems customers confront.

In one of my favorite West Wing episodes, President Bartlett is playing chess with Sam Seaborn. He implores Sam to “look at the whole board” and at the end of the scene, Sam realizes the sleight-of-hand President Bartlett had played to diffuse a brewing military crisis.  I was reminded of that scene yesterday when I was reading the commentary about Epstein Becker’s  announcement of a “strategic alliance” with Deloitte.  The internet was near meltdown with “the Big Four are coming” refrain.

Look at the whole board.  Are they here?

Look at the whole board.  What do the prinicpals mean by “strategic alliance.”  Two words that, pinned together, suggest the combination of Amazon and Apple.  Or maybe just an agreement to sell Apple products on Amazon. Oh, by the way, the Apple products being sold on Amazon are just watch bands (actually, there are more, but allow me the literary license to make my point).  Both Deloitte and Epstein Becker are sophisticated and PR-savvy.  Both have good writers capable of saying things clearly or less so.  The writers are good enough to say nothing in a way that sounds like what they are saying is revolutionary.

Look at the whole board.  What have the parties actually agreed to?  What conduct will be different? What do customers get besides fancy marketing talk? We may never know, but they announced is an intention to refer each other business in geographies in which they do not practice. Because Deloitte US cannot practice law, why not get some referrals in return for referring the US work?

Look at the whole board.  The arrangement is “non-exclusive.”  If the parties were actually starting to date with plans to get serious with one another, you would expect some exclusivity. Instead, Epstein Becker will be able to provide “joint service offerings,” which is marketing-ese that translates into “we’ll have a couple of meetings and then talk about what a beautiful date I have, even though we aren’t really dating.”  Fancy talk to make you see something other than “the whole board.”

We’ll know more in a year–if this agreement is what people were suggesting it was, Epstein Becker’s revenue and profits should soar in 2019 and those numbers will be reported in early 2020.  In the meantime, count me a doubter.  And customers being sold the “combination of the century” or whatever it will be called, would do well to ask to understand the economic connections, the workflow connections, the responsibility for outcomes and the efficiencies that the combination creates. What are the metrics that show the combination yields added value to the customer?

Look at the whole board.

I recently learned that I was named a BTI Client Service All Star for 2019, the sixth time I have been named. As with each previous time, I am honored to have been selected for this recognition.  This year carries some special significance, however, because it is the first time I have been recognized for my work for ElevateNext. It bears noting that customer service is not a one-person thing.  I am a part of a terrific team that includes not only my ElevateNext colleagues, but also my colleagues at Elevate Services. Thank you to my colleagues for making this honor possible.

Today is International Women’s Day.  I am lucky–and extremely proud–to work in a company with so many great women throughout the company, especially in leadership positions.  Elevate shared is diversity and inclusion report to the public, but the data doesn’t convey the dynamic role these women play in the company and how they are shaping our future, making us even better. So let me start this post with a hat tip and thank you to the women on Elevate’s Executive Management Team: Joyce Thorne, Kunoor Chopra, Megan Heltemes, Myriam Schmell, Nancy Fraser Michalski, Denise Nurse, Janvi Patel and Raj Boer.  Today, I celebrate these women, among many others.

I deliberately left one woman off the list of Elevate’s Executive Management Team because I wanted to offer a special note of appreciation on this important day.  When I finally end my journey in the legal world, I will be fortunate to look back over a long (and hopefully still longer) career that includes any number of wise or lucky decisions that helped me succeed on this journey.  But no matter what happens in the coming years, the wisest and luckiest decision I have made was be to become partners with Nicole Nehama Auerbach.  She has always been an exceptional person and a phenomenal lawyer.  I have watched her grow and evolve as a leader and develop a level of wisdom few can match.  She displays an incredibly deft touch with people–I’d like to think that I’ve helped her learn (by repeated practice on me) how to control the inflated egos so common in our industry. But she cares deeply about everyone she works with and treats every person she encounters from receptionist to Executive Chairman with the respect and appreciation to which every person is equally due. And while Nicole is truly a great partner, she is an even better friend.  I shall value her friendship into eternity.

Nicole is the kind of person who, when she reads this, will conjure a list of ways I have helped her.  Perhaps a couple of the things she comes up with will be true. But I know for certain that whatever is on her list, it is far shorter than the list I have of how being Nicole’s friend and partner has been the blessing of a lifetime.