September 2015

“It’s my client.”  “I get the billings.” Even the magnanimous say, “I”ll share the billings.”  In court, you often hear lawyers refer to “my client.”

Each own of these assertions of ownership weakens everyone involved.

Most lawyers believe it strengthens them, especially in any intramural fighting over control and billing.  It doesn’t.  Everyone knows. Saying it is does not make it so.

It weakens the firm. Firms should be enterprises, not hotels.  Hotels are places where people put their luggage for a while. Then they leave and go to another hotel.  The assertion of ownership of a client is strong evidence the lawyer views his or her role as a hotel room occupant and not part of an enterprise team.

It weakens the client-firm relationship because it suggests the client is chattel.  It isn’t.

Trial lawyers see a case as a story.  They are constantly thinking about the story and why the jury should care about it.

Litigators see a case as a series of motions and briefs, depositions and documents.

The stuff litigators see as the point of a case is just a road to the end.

In Part 1 of this post, I noted how law firms had become so adept at creating “noise” about various topics, focusing on client service and alternative fee arrangements.  In Part 2, I identified 5 questions a General Counsel could ask to help separate signal from noise so she or he would know who is for real and who has ramped-up their marketing efforts to sound like a firm that is for real.  In this final part, I share 5 additional questions that should help separate signal from noise (which is why I start with number 6).

6.     What is the average cost of a deposition taken by your firm?  Not the preparation, just the deposition itself.

There is a lot of ways to go to actually answer this one–the average billing to a client for a deposition, the average length of the deposition (so you could multiply by an hourly rate in your head), or the firm’s actual cost.  I think the fairest one of these, one that everyone should know, is the average of the amounts billed to a client, but knowing any of these is enough to earn a gold star. The betting line is that most outside lawyers do not know any of these.

7.     Can I see three samples of Early Case Assessments?

Don’t ask if the firm does ECAs–of course they do (wink, wink).  You will get noise in response.  If you want signal, ask for three examples.  And if you get three, how close in form do the three look?  If the forms vary more than might be explained by the difference in cases, you have an indication that different people do things differently within the firm.  That may not be disqualifying, but it is worth knowing when someone from the firm talks about “the firm” doing things a certain way.

8.     At the same time, can I see three After Action Assessments and how those were communicated to the client?

Most firms say they do A3s (noise).  Few do (signal).  Those that do A3s will happily share the results, what lessons were learned, how their client reacted and so forth–because they will have experienced the power of structured After Action Assessments.  Everyone else will flounder on this: very few firms have embraced the notion that mistakes happen and provide an opportunity for improvement. I discuss A3s in more detail here.  If A3s are not communicated to clients, or are not done with full client involvement, how is the firm helping the client learn?  Not including a client in the process is the surest sign that a firm’s statement that it “partners” with clients is just more noise.

9.     What is an area where your firm led innovation? Where it was at the front end of change?








10.     Tell me about your approach to project management, process mapping and use of checklists?  Can I see examples?

The noise is “of course we use project management. Of course there is a process. Of course there are checklists.”  Seeing is believing, so ask to see them. When you have them in hand, you have signal.

I hope these questions are helpful.  Law firms are so very good at the quality of their noise that they actually believe it. Sadly, you can either be a victim of the noise or you are forced to take steps to separate the signal from the noise.

In Part 1 of this post, I noted how law firms had become so adept at creating “noise” about various topics–client service and AFAs for example, they they effectively drowned out any signal on these topics.  Much of what firms have to say about these topics is nothing but gibberish, but it accomplishes the objective of allowing a client to effectively distinguish between firms on the topic of importance.  With so many firms trying to be “all things to all people,” all firms become nothing to everyone.

So a client who wants to partner with a firm who is actually focused on client service and good at it, or a client who wants a firm that offers real alternative fees, not just hours dressed up as an AFA, has to do some work to do.  While a complete investigation could be time consuming, here are ten questions clients should ask that will provide revealing insights:

1.  Are your associates eligible for bonuses based on the number of hours they bill? 

If the answer is yes, you know for sure that the firm has not moved away from the hours based environment that makes it successful only if you spend more on them. You know you can count on annual rate increase letters that always come after your budgets are established.  You know that the associate doing your work today will soon bill much more simply because another class has entered the firm below them.  How do these things help you?

2.  Is your satisfaction with performance and service a factor in compensation?

If the answer is anything other than an unqualified “yes, and here is how we determine it and how much it impacts the associate/partner,” you know that everyone in the firm knows your satisfaction does not influence how much people are paid.  If you believe you get what you pay for, no one is being paid for your satisfaction.

3.  Does the firm provide alternative fee quotes on every matter or only on request?

There is a huge difference between doing something you want to do and doing it because you have to.

4.   What percentage of a firm’s revenue comes from alternative fees? What is the firm’s definition of an alternative fee?

A firm committed to AFAs knows exactly what percentage of revenue comes from AFAs and what the firm’s definition of an AFA .  If the firm does not categorically and unequivocally excluded blended hourly rates, discounted hourly rates and capped hourly rates from its definition of an AFA, you know they are playing games to make their AFA revenue number and percentage look higher.  Anything with “hourly” in the description of the rate structure is, well, hourly.

5.   What changes has the firm made in how it handles cases in the last 5 years?

A firm that has not consciously changed the way it staffs cases, handles discovery, investigates cases, disaggregates work and utilizes project management tools has made no effort to streamline the bloated approach to litigation that dominated the landscape for so many  years.  Firms should be able to be very precise about this and should indeed show you specific tools, like checklists and process maps.

In the third installment, I’ll go through questions 6-10.


I was reading this interesting Fast Company article about what the 2016 Presidential candidates talk about when speaking of income inequality.  This statement was interesting:

Does all of this talk about inequality render the term meaningless? Especially at a time when wealthy donors have unprecedented sway on elections, the idea that government must work to reduce inequality risks becoming just another general economic platitude that no one is against. Kind of like being in favor of “jobs” and “growth.” When this happens, candidates of both parties link generic terms to whatever economic and social policies that they would have proposed anyway, based on where their parties traditionally stand, says Rigby.

Is there any candidate not in favor of “growth”? Of course not.  Any candidate not in favor of jobs?  Again, no.  The discussion of such general concepts is an elixir, designed to dull the senses that otherwise might focus on policy details to see whether the policies espoused by a candidate are consistent with her or his platitudes.

How different is the business of law?  Not one damn bit different.

Ask any law firm about client service, and they are all for it.  After all, it says so right on their web page and, hey, if it is on the web, it must be true.  What about Alternative Fee Arrangements?  Firms that had not heard of them in 2008 have now been doing them for decades.  Again, it says so right there on the firm’s website.

There is a concept at play both in politics and law firm marketing called the signal to noise ratio. Wikipedia describes it as:

Signal-to-noise ratio (abbreviated SNR) is a measure used in science and engineering that compares the level of a desired signal to the level of background noise. It is defined as the ratio of signal power to the noise power, often expressed in decibels. A ratio higher than 1:1 (greater than 0 dB) indicates more signal than noise. While SNR is commonly quoted for electrical signals, it can be applied to any form of signal (such as isotope levels in an ice core or biochemical signaling between cells).

Signal-to-noise ratio is sometimes used informally to refer to the ratio of useful information to false or irrelevant data in a conversation or exchange. For example, in online discussion forums and other online communities, off-topic posts and spam are regarded as “noise” that interferes with the “signal” of appropriate discussion.

In other words, if someone is sending out an attractive message (a signal), the best response is to make a lot of noise to drown out the signal.  We see this a lot in politics. One candidate says “immigration” and soon everyone is talking about how long they have opposed illegal immigration. One candidate says “jobs” and soon all are talking jobs.  It doesn’t matter what side of the aisle you are on, your party’s candidates are doing whatever they can to look like everybody else or show they are going farther on the issue than the other candidates (in the primary).  Thoughtful discussion in politics has become a quaint historical relic because the goal is to create enough noise to drown out the other candidate’s signal.

This same strategy is prevalent in the business of law.  Almost every law firm website says somewhere that the firm is “committed to client service” or “provides exceptional client service” or something akin. In listing the things that makes it special, one firm says (and this is really going out on a limb) that “you and your employees will be treated courteously and with respect.”  Wow.  Bold.

Another firm touts that it “keeps its clients informed” about the client’s matters.  Still another says that for 137 years it has “put clients first.”  Law firm websites are full of adjectives describing client service:  unmatched, superior, dedicated, improved and exemplary are just a few examples.

What does all this mean?  Sadly, not a damn thing. Its gibberish.  It is noise, intended only to drown out the signal.

This marketing approach is nothing if not successful.  Can you identify with specifics the differences between two candidates’ positions on any issue when the candidates are from the same party?  Can you identify any feature about law firms that distinguishes one from another?

Next, in Part 2 of Law Firm Signal and Noise I will share some specifics on how to separate noise from signal.

valoremnext - with swoosh in xA lot of people have asked why we chose this name for our prevention platform. I wanted to answer those many inquiries.

My new partner Jeff Carr, the iconic former General Counsel of FMC Technologies, sometime ago defined the four stages in the evolution of law. The first stage is what Jeff refers to has Old Law. I think PaleoLaw better describes those in this stage. But the OldLaw/PaleoLaw stage describes firms and lawyers who bill by the hour, raise rates annually and see their clients as a giant wallet. My kids and firms in this stage have a lot in common. One of the major drivers of daily life is to get more money from the relevant wallet.

Everything about firms and lawyers in the PaleoLaw stage revolves around billing for time. Firms buy software to help lawyers capture more time. Associates and income partners receive bonuses entirely dependent on how many hours they bill. Partners are compensated on revenue (more hours equals more revenue). And so on. The entire system is so built on the premise of hourly billing and “more, more, more” that many lawyers can’t even see that hours are the basis of everything they do, let alone acknowledge the truth of the premise.

The second stage is “NewLaw.” Lawyers and firms in this stage are trying to lower costs by trying to reduce the cost of hours. Hourly rates are lower. Firms might be based in Indianapolis or some other low cost metropolis, but have an office in New York that serves as a portal to send work back to HQ in the lower cost locale. Overall costs to the client might be lowered, but the focus of the firms remains on hours and “more, more, more.”

The third stage, according to Jeff, is EngagedLaw. Firms and lawyers in this stage are focused on value, cost of production, operating and profit margins, and lowering the clients’ costs of legal service permanently and structurally. EngagedLaw is a major step forward, where EngagedLaw entities act like real businesses. But the focus remains on solving problems.

The problem with these the second and third models is that savings, while potentially meaningful, have limits. More problems cost the client more money, no matter how efficiently they are solved. As corporations grow, become more global, or both, the range of problems increases, often without a corresponding increase in resources to address those problems. In-house lawyers, a great talent pool, spend their time as clerks rather than true partners with the company’s business units, adding value by preventing fires.

Because in-house lawyers can add such great value if they prevent problems, Jeff counted the term NextLaw to describe the next stage of evolution for law departments. They must identify how to prevent problems so can focusing on helping the business grow. The problem is lack of knowledge about how to move from current state to future state, lack of knowledge about the right tools and processes to employ or lack of resources to effectuate the transition: the current fires still need to be fought.

That is the space in which we seek to establish a presence. So it only made sense to combine the NextLaw moniker with Valorem. Valorem. NextLaw. ValoremNext.

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.

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, 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





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.