According to Bloomberg BNA, Honeywell General Counsel Katherine Adams has determined that e-auctions are the ticket to lower legal fees. For those unfamiliar with the process, an e-auction is where the the corporate counsel throws chum in the water and the pool of sharks start thrashing around trying to feed on the skimpy morsels being offered. Actually, a post about a case is made and firms bid against each other. According to Adams, Honeywell gets a better deal, but “it’s not grotesquely cheaper.” It may be cheaper than it was before, but absolute cheapness is a fool’s metric–the relevant issues are value and sustainability. Frankly, I would like to see the data on how much cheaper final spend (total legal spend and total resolution cost) actually is, because there just isn’t data that proves this process is a successful one.
I have a bias on this issue, so I want to reveal it. I think the “chum in the water” approach is counterproductive bidding is the errand of a fool or a mark of true desperation. While some may disagree, my partners and I are not fools, and we certainly are not desperate, and so we take a pass on such “auctions.” We prefer to build relationships that lead to a collaborative effort to solve the client’s spend problems, and we hope to work with the client’s other law firms toward that same end.
So let’s consider an alternative. What would happen if, instead of creating an “every-man (firm) for himself” mentality, a client brought together the best and most creative minds of her legal team (inside and out) and got the team brainstorming to solve the client’s spend problem? What would happen if, instead of focusing microscopically on a single transaction or piece of litigation, the client focused the team’s effort on the real problem the client was hoping to solve? A macroscopic view is far more likely to yield greater value and a sustainable solution, one that does not reduce the attorney-client relationship to that of the company’s least important vendor.
Many people say that lawyers are very smart. But along with very smart, lawyers are not trained in collaboration and teamwork, and those are two areas of historic weakness in the profession. But when a general counsel can develop a team of collaborative members, the opportunities to solve problems are so much greater and so much more permanent.