August 2017

Valorem Law Group is honored to be one of the law firms “who leading legal decision makers say are the tops in collaboration.”  According to BTI Consulting, which reported the findings of its interviews with corporate law departments.

Clients say collaborative law firms show deep understanding of client needs across the team, are up to speed on all the issues whenever an attorney joins the team, and are all focused on the same overriding objective. The attorneys at the most collaborative firms work at it.

That last sentence is so important–we really do work at being collaborative.  We dedicate space to it.  We schedule it and we take pride in it.  We believe that collaboration yields better outcomes for our clients.  We put a lot of thought into collaboration, so it is so gratifying to be recognized as a leading firm in this area.

I just read an article in Law360 discussing Microsoft’s commitment to shift 90% of its work to alternative fee arrangements.  Michael Rynowecer of BTI Consulting is quoted as saying the move is “one of the most aggressive” adoptions of AFAs he knew of. “Ninety percent is on the leading edge. It’s an enormous step; it’s making a bold statement to all the law firms with whom they work, saying this isn’t an effort du jour.” If Microsoft is serious, and if it truly seeks the real value of alternative fee arrangement, the Microsoft law firms are in for a wild ride.

We’ve been a non-hourly fee firm for almost 10 years.  Our practice is complex commercial litigation and related areas of litigation. It was a wild ride for the first several years of our transformation.  When hourly billing is part of your DNA, you need to undergo surgery to alter your DNA. It is hard to overstate how hard it is for billable hour lawyers to make the transformation to being alternative fee lawyers.  There are so many areas where your view of the world needs to change.  Dramatically change.  If the firms want to get the maximum profit out of fixed fee engagements, they will need to change the way they handle matters, account for matters, determine value of lawyers and others, compensate partners and associates, and more. They need to learn how to litigate “skinny.” How to assess outcomes with less than perfect information.  To advise clients when less is more.  These things reduce the path to output. Clients, in turn, need to push firms to make these changes so they get more than billable hour fees using a different name.

It will be interesting to see if firms and clients go to school to learn the changes and create systems to be sure they are making these dramatic changes, or if they adopt a learn as they go approach.  The latter is a path to needless pain and waste. But the payoff can be great. For firms, high profit margins are a great thing.  For clients, the financial benefits and predictability are great, but the real payoff is in results.  As the Law 360 article noted,

“Most large companies are reporting that they’re getting better outcomes,” Rynowecer said. “They’re finding that one of the big benefits of AFAs is that it requires more discipline and planning than [billable hours], and it requires highlighting strategic goals earlier for clients.”

Better outcomes are a wonderful thing.  But the investment in them is a wild ride.  Here’s hoping clients and firms take advantage of the the lessons painfully learned by others who carved the trail.

Kudos to our very own Nicole Auerbach, who was recognized by Crain’s Chicago Business as one of Chicago’s Most Influential Women Lawyers.  Here is how Crain’s summarized Nicole:

After concluding that the billable hour model for pricing legal services needed to change, Nicole Nehama Auerbach helped form Valorem Law Group in 2008 to give clients an alternative. Valorem went from being one of the few firms created to provide alternative fee arrangements (AFAs) for commercial litigation, to being named one of the 22 Firms Best at Delivering AFAs by BTI Consulting in 2017 (along with such powerhouse firms as Kirkland & Ellis, Morgan Lewis and Seyfarth Shaw). Auerbach is a frequent speaker and writer on topics related to AFAs, innovation and the impact of the billable hour on women and minorities. In addition to her role as a thought leader on AFAs, Auerbach has had a notable year representing clients. In April, she obtained a $13.4 million verdict in federal court against the City of Chicago and six Chicago police officers for violating the civil rights of a client (Patrick v. City of Chicago, et al.). She is also the co-founder and current national board chair of the Coalition of Women’s Initiatives in Law.

And here’s what her Valorem colleagues thought of this honor:

 

 

 

 

 

 

 

 

 

 

 

 

We’re glad the rest of Chicago is learning what we’ve known for a while.