Trends and Innovations

On Monday, my partner Nicole Auerbach and I announced the launch of ElevateNext, which will work alongside Elevate Services, a best-in-class law company.  And with Elevate, we announced our collaboration with Univar, a Fortune 500 chemical and ingredient distribution company, to reduce its legal spend by 50%. Many have followed our time with Valorem.  I am grateful for the sustained interest in our work at Valorem, and so I wanted to share the thinking that went into the creation of ElevateNext.

Continue Reading Announcing ElevateNext. The next big step in serving our clients.

You have? Fantastic. Let us know about it and you may be recognized with an InnovAction Award.

Details for Entry

  • The preferred formats for entries are Word and PDF via email to dcurtis@colpm.org. Prior approval is required for other formats. Please contact the College Administrator at dcurtis@colpm.org or 224.337.9033 to discuss alternatives and to receive special instructions.
  • All entries must be received by June 16, 2017, and accompanied with the $250 USD entry fee. The College waives the entry fee for recognized 501(c)(3) organizations. Please include your tax id number on your application to receive the waiver.
  • Winners receive a beautiful crystal award at the InnovAction Awards ceremony and are invited to make a presentation describing their innovations.
  • Winners will be highlighted and promoted in ads placed in media sponsor publications, on the College website and featured in the COLPM e-newsletter.
  • Winners will be prominently featured on the InnovAction Hall of Fame page that celebrates the innovative accomplishments of lawyers and law firms on a global basis.

Click here to download the 2017 entry form.

 

Geography is not a consideration. Past winners have come from Australia, the UK, Canada and the United States.

You need not be a lawyer to win, though lawyers have won.  You need not be in private practice–pro bono groups and law student organizations have won.

InnovaAction Awards are for big thinkers who execute.  Submit your entry.

Lamb--Art of ValueKirk Bowman has become one of the leading voices on value billing. Kirk produces the “Art of Value” podcast. He has interviewed an range of people who have offered so many great ideas on value, pricing and billing, including Ed Kless, Michele Golden, Peter Carayannis, the great Ron Baker, John Chisholm, and so many others whose names I did not recognize but who taught me so much. So I was honored to be invited to participate in a podcast, which you can find here. Thanks Kirk!  And if you are interested in value and value billing, you owe it yourself to listen to Kirk’s podcasts.

My last post recounted McDonalds’ creation of its own ad agency and posited the question whether bespoke law firms could be far behind.  Enter GE.  Yes, that GE.

According to CFO.com, GE is transferring about 600 of its tax professionals to PwC:

Reacting to what it sees as increasing uncertainty about tax rules in the United States and the rest of the world, PwC will hire more than 600 lawyers and public accountants from General Electric’s tax team and incorporate GE’s tax technologies and processes. In exchange, GE will get to shed salaries while still benefiting from the expertise of its legacy team.

The deal was further described:

Although GE declines to say what costs it will shed in the deal, Gosk said in the release that the company is “pleased to advance our longtime relationship with PwC in a way that provides an opportunity for other leading companies to tap into the world’s best tax team while providing outstanding career opportunities for those legacy GE professionals.”

Under the five-year agreement, which is slated to take effect April 1, PwC will be adding accountants, lawyers, and other tax professional from GE’s corporate division and the company’s other businesses, including GE Capital. About 20 corporate tax employees will stay on at GE to work on consolidated financial reporting, mergers and acquisitions, and other strategic efforts, along with managing the PwC relationship. An additional 250 tax employees will remain with company to service GE’s individual businesses.

The arrangement was struck after GE “looked to reevaluate the optimum delivery of these critical global tax services now and into the future,” the PwC press release said. “The new Global Enterprise Tax Solutions team will sit within PwC Tax and will provide managed services not only to GE but also to other PwC clients as well.”

So we have lawyers and others going to PWC.  The interesting part is that PWC plans to leverage the GE professionals to provide services to other clients, and GE will share in the revenue stream.

In the space of a week, we see two examples of major companies designing solutions to address ordinary corporate needs that involve custom designing a solution outside the company.  Shedding headcount is a positive for most companies and the idea of better leveraging what were corporate assets has to be enticing.  The question remains, when do law departments dip their toe in this trend.

Several years ago, I was part of a proposal to a large tech company to create a custom, build-to-suit, build-to-serve law firm to handle the company’s IP work.  The company showed interest, but ultimately it was too big a leap to make.

That was then.  Crain’s Chicago Business is reporting today on an ad created by “Omnicom’s We Are Unlimited, which was created and tailored for McDonald’s in late 2016 after a competitive review.”  So we have a piece of Omnicom now devoted exclusively to McDonald’s.  The question, obviously, is whether this foreshadows things to come.

When clients complain about their [fill-in the blank–ad agencies, law firms, accounting firms, engineering firms, etc.], one possible answer is “build-to-suit.”  The concept works incredibly well in the real estate area.  Why would it not work with a custom built law firm (or whatever)?  The answer is, it will.  It will just take one committed client to make it so.

We created ValoremNext, in part, because we believe that prevention has to become the next focus for law departments.  More with less is now the New Normal, but there are finite limits on the ability to do more without more. But if legal problems can be avoided in the first place, the amount of more that must be done becomes less.

Even though prevention is an essential tool, there is scant data on whether law departments actually focus on prevention, and if they are, how so.  So, we’ve created a short survey we are asking people inside companies (not limited to just lawyers) to take to enlighten us. We know your time is valuable – it should not take more than 3-5 minutes to complete.  We will blog about the responses every few weeks.

Since more data will provide greater insights, please forward the link to the survey —www.surveymonkey.com/r/ValoremNextPreventiveLaw-HTB95DX to your social media followers/LinkedIn groups or directly to those you know who are in-house at other companies.

Something interesting happened recently.  Jeff Carr, Nicole Auerbach and I consulted with a client about how to improve the law department’s performance and save money.  Shortly afterwards, Nicole and I consulted with a law firm about moving to alternative fee arrangements.  The interesting thing was that we found ourselves enjoying being consultants.  We found, in these two experiences, that we have a lot to offer.

This should not have been a surprise:  Valorem has been a classroom of sorts since we formed the firm in 2008. We learned from trial and error how to do alternative fees when there was no roadmap to guide us. We also figured out how to frame the national discussion about AFAs when no one was talking about anything but the billable hour. We learned how to divorce hours from pricing when most people to this day still use hours as the basis for calculating an alternative fee.  We learned that AFAs are just one of several tools necessary for a successful representation and delivery of exceptional client service.  You learn a lot in 9 years, and believe me, we’ve been drinking through a fire hose.

We are grateful that clients have responded so favorably. In 2016, Valorem was recognized as one of 22 law firms “Best At Delivering Alternative Fee Arrangements,” and has been recognized for the past four years as a member of the BTI Client Service A-Team. For the past two years, we have been recognized as one of the “Most Recommended (by clients) Law Firms.”  And I have been humbled to have been named a BTI Client Service All-Star MVP for the past four years.  We’ve learned a lot, but we also have put what we’ve learned into action.

We haven’t exactly kept most of the lessons we have learned a secret. I have shared my thinking on alternative fees in two books, and shared my thoughts on customer service and the delivery of value in this blog, which I started back in 2004.  And I have written extensively (with my friend Paul Lippe) about what we affectionately refer to as “the New Normal” in a column for the ABA Journal. These columns are soon to be released in book form. Jeff just started a blog, Life at the Speed of Prevention, that focuses on the enormous untapped value of preventing legal problems from occurring. Nicole, Jeff and I also speak regularly at various industry events across the country to share the lessons we’ve learned and our (often outspoken) views of the legal market.

In the past, though we’ve willingly helped others with their AFA programs or customer service initiatives, we drew the line at formal “consulting.”  But as we found ourselves enjoying the consulting experience, and as more people are asking us to devote more time to this aspect, we realized that maybe the line we had drawn in our minds was a bit artificial.  And one of the many good things about being in a small firm is the absence of rigid rules, or objection to changing them. So we’ve erased the line, and have officially launched a consulting practice for both companies and law firms on these broad topics (and anything in between):

 

For Law Departments:

  • Analyzing processes to identify and eliminate waste
  • Analyzing workflow to identify prevention opportunities—reducing work coming into the department at the front end
  • Alternative Fee Arrangements (training and structuring fees, making AFAs profitable)
  • Deploying tools to reduce total fees even if they are billed by the hour
  • After Action Assessments and programs to embed continuous improvement into the Department’s culture
  • Developing RFPs for AFA engagements
  • Deploying an low-cost arbitration program to address small cases that, in the aggregate, can add up
  • Designing prevention programs and helping departments see around the corner to know what’s coming

For Law Firms

  • Alternative Fee Arrangements (training and structuring fees, making AFAs profitable)
  • Firm culture audits to determine if the firm is customer-focused
  • After Action Assessments and programs to embed continuous improvement into the Firm’s culture
  • Responding to RFPs that address AFAs

Our goal is to help others go through the learning curve we experienced, but at an accelerated rate and without having to learn the hard lessons through actual experience.

So as they say in the consulting biz, if you have interest in any of these topics, please give us a call. We will customize the right program for you.

patrick.lamb@valoremlaw.com   nicole.auerbach@valoremlaw.com    jeffrey.carr@valoremnext.com

 

Litigation costs too much. Why? Because it is overburdened with process and tolerated but unnecessary excess.  And who benefits from the focus on process and needless discovery and motion practice? Lawyers.  Who designs the processes and rules for discovery?  Lawyers. And who benefits economically from this focus on rules and process? Lawyers.

Lawyers are the problem, not the solution.  While no solution is perfect and lawyers cannot be entirely eliminated from dispute resolution, it is possible to design a solution that gets to fair results quickly with drastically lower costs.

For small cases, much of the cost results from activity with little substantive impact and cases resolve based on the cost of prosecuting or defending the matter rather than on the merits of the dispute.  Parties negotiate from extremes, which makes resolution that much more difficult.

To take the lawyers out of the equation, as well as their costly focus on process and rules, ValoremNext has designed a simple arbitration solution for small cases. Founder Nicole Auerbach, a certified arbitrator, acts as a neutral, using this simplified approach which ensures resolution in under 60 days:

  1. The parties sign a simple agreement consenting to the Valorem Arbitration Program. 2. There is an initial conference, lasting only one hour, within a week after the agreement is signed.  Each party is represented by a business person, who is the party’s spokesman.  A lawyer may join to advise the client.
  2. In the initial conference, each side will explain its view of the dispute, and identify whether the other party has any information essential to a fair evaluation. Each party will also identify what documents it has to support its claims or defenses, including damages.
  3. The initial conference will end with an agreement or order on when each side is to produce its supporting documents and whether any other documents must be produced. There will be presumption against producing large volumes of documents and no fishing expeditions will be permitted.
  4. In the initial conference, the parties will agree or the arbitrator will decide whether a single, one-hour maximum deposition will be permitted by each side and who the deponent will be.
  5. Three weeks after the initial conference, the parties will submit a brief not exceeding 5 double spaced pages, laying out their claims or defenses and arguments for their position.
  6. Within 10 days, the parties will meet telephonically for the hearing. Each side will have 30 minutes to make its case to the arbitrator and the parties will answer any questions the arbitrator has.
  7. Within one hour of the conclusion of the hearing, each side must submit a confidential email to the arbitrator setting forth its proposed resolution.
  8. Within one day, the arbitrator will choose one of the two offers. There is no baby-splitting or compromise of the two submitted offers.  The decision will be announced by forwarding the accepted proposal to the parties with a brief explanation of what factors determined the acceptance of that position.  This explanation will not exceed two paragraphs.
  9. During the period the arbitrator is considering the matter, the parties may share their proposals with each other and attempt to work out a resolution.

The total time from signing the agreement to conclusion is less than 60 days.  The cost of the arbitration is $7500 or 7% of the amount at issue, whichever is greater.  Each party will pay 50% of the fee, unless the parties agree otherwise or a clause in an operative contract says otherwise.

With minimal lawyer involvement, the total expense per party on a $100,000 claim, including legal fees, should be under $5000.

This is a far cheaper and faster way to resolve a dispute than any existing option, and I tip my hat to my partner, Nicole Auerbach, for this client-focused approach. The details and needed documents for the program on available on Valorem’s website.

Pam Woldow and Doug Richardson penned a terrific post, Top 5 Bad Excuses for Resisting Legal Project ManagementI wanted to compliment them and share some thoughts on the 5 excuses.

1. My clients don’t want or need LPM. 

I had to laugh when I read this.  Most lawyers who talk about what their clients don’t want have never asked the client directly.  They simply infer this viewpoint from the fact the client hasn’t insisted on use of LPM.  I mean, really.  Try to imagine this conversation.

Lawyer:   Would you like us to do your work efficiently, in an order that made sense, and was within agreed-upon budgets?

Client:   Absolutely not. I won’t stand for it. If you operate efficiently and bill me less, I will fire you.

To quote one of the great philosophers of our time, Forrest Gump, “stupid is as stupid does.”

2.  If we are efficient, we won’t make as much money. (And the corollary: if we are efficient, we won’t be able to meet our annual hours requirement.)

This, of course, fits in perfectly with the “my clients don’t want this” excuse.  At least people who mouth this excuse are being honest about why they are stealing from their clients.  But this is a stark illustration of the failed business model that most law firms cling to.  Try to imagine this excuse being used in any other profession or business.

3.  I’ve practiced the way I do for decades, and I’m not going to change now.

The blather illustrates why the eight worst words in the English language are “because that’s the way I’ve done it before.”  Being so closed-minded is not an attribute, it is an indictment.  I only hope these lawyers have the courage to say this in front of their clients, who would be fired if they uttered this excuse.

4.  All my matters are unique, and LPM imposes a bunch of lockstep protocols that will standardize all legal work and devalue my legal judgment.

I’ve referred to this excuse as the “we’re special” excuse.  Want a list of highly customized work reliant on project management for successful execution.  Instead of proclaiming how special you are, perhaps you should just wear this.

Stupid

 

 

 

 

 

 

 

5.  LPM is all about monitoring and metrics, and my mamma didn’t raise me to be a math major.  Also, LPM will impose a whole new learning curve and add a ton of additional work to my already overburdened schedule.

This person is the first cousin of the person in no. 4.  It is, apparently, a shared trait that they don’t give damn about their clients need.

________________

The tragedy is not that there are people who use these excuses, providing so much fodder for Pam and Doug to write their posts. The tragedy is this thinking, expressed or not, reflects the views of a substantial majority of lawyers.

With thanks to Robert Ambrogi  for the heads up, I wanted to suggest you take a look at the web site of Exemplar Law Partners.  The first page of the web site states an unequivocal position on hourly billing.  “No hourly bill.  No hourly bull. Exemplar is the first corporate law firm in the nation to exclusively adopt a fixed price model designed to align our interest with our customers while enabling businesses to better manage their legal budgets.”

I don’t know these folks (and I can’t find out who they are on their web site), but I hope they make millions.  I applaud them for a forward-thinking approach to client relations and wish them well.  If they succeed, others will follow.