Managing Legal
My last post was discouraging:
“Business Leaders Need to Drive Better Legal Pricing and Services Delivery Because Lawyers Won’t or Can’t”.
Discouraging, but proven.
Among law firms:
- 69% of leaders surveyed said that, “partners resist most change efforts”, and
- 59% gave this reason: “We are not feeling enough economic pain to motivate significant change.”
And among in-house law departments:
“Altman Weil found that 55% of Chief Legal Officers believe that they do not have enough buying power to negotiate more effectively. Some 51% also say that law firms are resisting discounting. Interestingly, 30% of the CLOs do not want to damage good relationships with external counsel by asking for greater discounts.”
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But it’s not all gloom.
Some outlier firms and individuals in the legal industry understand that client companies need to do more with less in managing their legal affairs. And they’ve been taking decisive action to that end.
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Consider business litigators Nicole Auerbach and Patrick Lamb.
Ten years ago they were among the founding partners of Valorem Law Group — a Chicago-based litigation boutique of 10 or so lawyers nationally known for having pioneered the move to “alternative fee arrangements” (i.e., in place of the billable hour) for commercial legal work, a reputation for great client service, and a focus on client outcomes.
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“A focus on client outcomes”?
What law firm is not “focused on client outcomes”?
Patrick Lamb in a June 20, 2018 presentation:
“I remember sitting at my first large trial where we were [represented] a plaintiff in a case against probably an AmLaw20 firm [the nation’s 20 largest law firms by gross revenues and other key metrics] at the time, and we got a great verdict.
“And I remember sitting there thinking: ‘We’re going to get paid less than these guys are for getting a much better result’.”
The losing law firm had billed hours for (presumably) more attorneys and perhaps at higher rates. But — because hours billed defined each law firm’s value to their respective client — the losing firm got paid more than the winning law firm.
Patrick Lamb: “It bothered me from that moment forward”.
So he and Nicole Auerbach “focused on client outcomes” — rather than on sheer bodies and hours thrown at a case.
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Valorem Law Group, under Nicole Auerbach’s and Patrick Lamb’s leadership, has long been documented by BTI Consulting Group as enjoying a leading reputation among clients for its effectiveness (among top 10% of law firms for commercial litigation, most recommended by legal decision-makers for two years in a row, etc.).
Earlier this spring Valorem Law Group announced that it would form a parallel law firm called ElevateNext and collaborate with a law company called Elevate Services to target a “moonshot” designed to reduce by 50% the $10.5 millions lead spend of Univar (2017 net sales of $8 billion).
Reduce by 50%.
An audacious goal — but one supported by Auerbach’s and Lamb’s decade-long track record.
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Nicole Auerbach, in the June 20, 2018 presentation mentioned above, described Valorem’s methodology for providing fixed fees relating to defined phases of litigation. It provides something that the billable hour makes impossible — “budget certainty”:
“If firms are doing a fixed fee the right way that should be budget certainty, which really thrills the CFOs, and other people who need to know exactly what their legal spend is going to be.”
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The pioneering example of Nicole Auerbach and Patrick Lamb shows that it’s feasible for the legal industry to provide the pricing discipline and effective service delivery that client companies need.
That’s a good thing.
It’s just not happening yet (much).