The end of the beginning

5 12 2011

This is a post about endings. It has two main parts.

Firstly, the legal profession, and my thoughts on where we are in the evolution of the legal services market.

Secondly this blog, and where it’s going (if you don’t give two hoots about this, stop after the first section – that’s fine by me).

Is this the end?

I started writing this post almost exactly two years since I started blogging, and the amount of change in the legal profession in that time has been phenomenal. It’s as though much of the innovation and drive that has been missing from so many parts of the profession for decades has suddenly been discovered and injected into its flabby buttocks.

Yet it really only is just beginning.

My first couple of posts were about how change was coming and that the increasing pace of the market meant traditional ways of formulating strategy were unlikely to be fast enough for law firms to be successful in the new world.

As the changes that were on the horizon became reality, there was no shortage of material to write about – outsourcing, new business models, technology,  the need for innovation and differentiation, and the even more pressing drive for efficiency and (truly) effective strategy. As fast as I could write, real world examples appeared in the press:

The speculation about the possibility of UK law firms attracting external investment and the potential that brought began to become reality with the emergence of new law firm franchise models and the well publicised investment in Quality Solicitors (mentioned above). Much of the focus in this area was on consumer focussed legal services, but in the world of commercial law, pricing models continued to vex the profession, with pressure on profits resulting from a growing rejection of the billable hour model and a re-examination of what value really means in the world of legal services.

Irrespective of whether lawyers were working in the world of business or consumer legal services, traditional career paths were breaking down and new options were emerging. This in turn has triggered a debate about how fit for purpose current legal training is - and, in particular, against the current economic backdrop, whether training as a lawyer is a sensible career choice.

Massive change, in the space of two years.

This change will undoubtedly continue, and in my view will accelerate. For the agile, entrepreneurial firms and lawyers, and those new entrants with the assets and appetite for success, this is a time of great opportunity. For those law firms struggling to change, sitting on the fence, or burying their head, the end may not be as far off as you think.

So for those law firms, I do think this is the beginning of the end, but for many more this is the end of the beginning.

Let your creativity and courage take centre stage and sieze the opportunities that will emerge.

Just do something.

And so to this blog.

After two years, around 100 posts and over 35,000 views, it feels like it’s time for a change.

Time to sit back and watch the market – watch new business models and legal service providers emerge and challenge old ways of thinking.

Time to listen to new voices and examine the new perspectives that will undoubtedly join the more established commentators.

Time to reflect on the fantastic comments and feedback on the blog thus far.

Is this the end?

Who knows.

I feel I have a book brewing, and it maybe that a break from the blog helps me get it written.

It may be that some of the developments in the profession get me blogging again sooner than expected.

Time will tell.

But for now, it’s goodbye and thanks for reading. If you’re a new visitor, take some time to explore the links in this post. If you’re a regular, thanks so much for your support. You are the reason I’ve been writing, and I sincerely hope you’ve found some of my posts helpful.

 

Postscript – how the year turned out.

For the curious and any of my regular readers who return in a fit of nostalgia, WordPress sent me some interesting facts and figures about the blog which I thought I’d share:

  • The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 28,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 10 sold-out performances for that many people to see it.
  • The busiest day of the year was January 18th with 2,870 views. The most popular post that day was You are wrong. I am right..
  • Top search terms were:  intelligent challenge, value disciplines, chargeable hours, and identify the best value discipline.

  • Most visitors came from The United States. The United Kingdom & Netherlands were not far behind.
  • Top referring sites were wordpress, twitter and linkedin

Thanks again for visiting.





Excuse me, I think your pricing is broken

28 10 2011

I was pleased to read the post on 3 geeks about value billing as this is definitely a topic that needs exploring further, not least because I’m astonished by the number of law firm partners who continually tell me that it’s for clients to find a pricing model that works for the firm’s services.

Caroline the Finance Director had the new pricing model absolutely nailed

The common refrain from private practice lawyers (especially those who know how I feel about hourly rate billing) is that in-house lawyers who talk about value based billing really just want to pay less, and are not really interested in concepts like sharing risk. Opening a dialogue about pricing is simply an exercise in getting the law firm to do the same work for less money.

I my have missed the point, but of course they want to pay less!

The fact that the firm hasn’t developed a model that really meets their needs, or if they have the firm can’t communicate it in a compelling model does not turn this into the client’s problem. It’s the private practice lawyer’s problem. It’s the firm’s problem. It’s the profession’s problem.

The market has changed.

Forever.

Except for those highly differentiated firms that have unique or otherwise genuinely marketing leading skills and expertise, law firms are shifting to being price takers rather than price setters in the market. As barriers to entry in the legal market fall, and new models of legal service delivery emerge, clients have more choices about how they resource work:

  • Big firm, small firm?
  • Global firm or international network?
  • Insource, outsource?
  • Disaggregate, multisource?
  • Onshore, offshore, nearshore?
  • Automate?

Fewer and fewer GCs respond well to a conversation with a law firm that starts at a notional rate card, which of course is all great news if you’re a firm with some creativity and innovation.

To me, understanding value starts with a conversation with the client.

Too many firms assume that clients all want the same thing, but in my experience the range of client needs and expectations are almost infinitely variable.

Organisations of a similar size in the same vertical industry may look similar on the outside. They may have similar sized legal teams which do similar types of work. But actually the underlying businesses may have different operating models, different shareholder expectations, different objectives, different risk tolerances and of course different legal budgets. What they want from their internal and external lawyers may be very different, in fact it might vary significantly across the business.

There are a whole host of client needs that might emerge from a well structured conversation, implemented through some good questions.

The challenge for the law firm is then to define the service that would best meet those needs, identify the variables, work out what the cost implications of those variables are on the overall cost of service delivery and then stitch the whole thing together into a great value proposition at a compelling price.

Some of the variables might include turnaround times, the style of advice (who is the ultimate recipient – business person or in-house lawyer?), the  level of detail, different types of relationship management (dedicated team?) and the hours of operation/availability for the external lawyers.

Thinking about how these factors help the client’s business, as well as the needs of the inhouse legal team, can provide a deeper understanding of value – for example will a quicker response time allow a deal to be completed more quickly? If so, what does that mean for the business?

From this baseline understanding, the firm can get creative, but to do so also needs to ensure they really understand the cost and benefit to the firm of moving these “levers” (i.e. changing the variables).

Cost is often not simply the employee cost, but also may encompass opportunity cost or the cost of holding WIP for specific periods of time. The flip side is that the benefits to the firm can be broader than simply revenue – improved cash flow, client referenceability, employee retention (if the work is prestigious or interesting), replicability (the ability to reproduce the output for other clients at lower cost/higher margin) are all benefits that have value and can be quantified.

With all these factors to play with, plus of course the dynamic of genuinely sharing risk and reward with a client, I would be amazed if a firm couldn’t find a pricing mechanism that works for both the client and the firm. Once some pricing options (hint: that last word is a useful one in these conversations), the overall value proposition for the service offering can be pulled together and communicated. Law firm BD has become increasingly sophisticated, and there are plenty of skilled professionals who can ensure the resulting proposal is truly compelling and is tightly tied to the value it will deliver.

So I’ll grant you this – it’s more effort than simply negotiating percentage discounts on an hourly rate. It requires you to understand the client’s business in more depth, but also your own. But surely both of those are worthwhile steps in any event.

And if you do get a client who is genuinely not interested in this type of conversation (assuming you are not in the commodity market where the price genuinely will be just about lowest price), then maybe they’re not the right fit for your practice?

Or maybe you need to go back and tweak the model some more…..





Hasta la vista baby – the termination of the legal profession

13 10 2011

Later this week I’m running a session for a group of leading technology lawyers which will explore the future of the profession.

Withington & Co's new M&A lawyer was a force to be reckoned with

Why I think this will be particularly interesting topic for this group is that I believe technology will be the  single biggest driver of change  for the legal sector in the long term.

Sure, globalisation, outsourcing, commoditisation, changing procurement patterns are all shaping the market now, but technology has the potential to change it to a much greater degree.

Here’s why.

There are a number of technology trends that have already influenced the profession to a greater or lesser degree:

  • The Internet has enhanced communication speed and accessibility which has fundamentally changed client service expectations and the response times in the market
  • The vast amount of electronic information available has made search and retrieval a vastly different affair to that of twenty years ago, when a trip to the law library and a long afternoon was required to get oven an overview of the latest law in an area
  • Collaboration software is allowing the process of working with internal stakeholders and external parties to become more efficient (not least by reducing the number of times documents are passed backwards and forwards)
  • The sharing of information between law firm clients has become far more widespread (intensified by social media) so that emerging client buying patterns such as the rejection of hourly billing become more adopted more quickly
  • Technology supports the standardisation of work – with more and more firms focussing on efficiency and improving process, tools like workflow software can support and enhance changes to the way lawyers work
  • The automation of low complexity work, most visible in the consumer space (think automated wills online), is also beginning to see wider adoption in the B2B space as more complex work gets disaggregated and the low complexity components get packaged up and automated (standard due diligence report anyone?)

However, to my mind, this is really only playing on the edges of what’s possible.

Where I’m really interested is the area of law where lawyers believe they add most value. The high-end, complex work. The work that NEEDS a specialist. A true expert.

Lets go right to the “business end” of the legal value chain.

Think about the legal sector and what it actually does.

Law is made (the government legislates, courts decide a case etc). This law is recorded and at a high level interpreted (often by academics and other commentators). The combination of these two steps provides a shared view of generally what the law is.

By and large, and the moment the value here is really only accessible to legal practitioners – the public  can get access to certain statutes and cases for free online, but the public’s ability to understand what they mean remains limited – although this is beginning to change.

The next step is to turn this information into a broad set of tools (largely documents – agreements, policies and other commercial instruments) and for the lawyer to use these tools and his or her understanding of the law to interpret the high level meaning and apply it to a particular set of facts, and in doing so create some further value for which the client will pay.

S0mewhat simplistic, but in very basic terms, the majority of the value that the market will pay for is in this interpretation and application of the law to increasingly complex situations. There are other factors that drive value such as the scale and risk involved, but generally speaking, more complex work means higher fees.

Looking a bit more closely at what lawyers actually do in this high value phase, in the vast majority of cases it will take  two forms – advising and creating documents. We already know that technology is starting to shape document creation (have a look at Epoq, Rocket Lawyer, legal Zoom and LexisNexis if you don’t believe me), but surely (SURELY) technology couldn’t actually start to creep into advising clients?

Could it?

This is the skill honed over years of hard-earned experience. The ability to steeple fingers, sit back in chair and let the cogs turn. To casually drop a Latin phrase into an argument. Those uniquely human abilities to find meaning and similarities between cases and facts. To both synthesise, analyse and structure highly complex information.

The skill that requires (in the UK) a three year law degree, a year of practical training, a two year stint of on-the job training, before the brightest and best graduates can call themselves qualified and enter the profession fully to “start” their career and their real learning.

Surely not.

Think about this, from a BBC article on the impact of technology in the City:

Trading floors were once the preserve of adrenalin-fuelled dealers aggressively executing the orders of brokers who relied on research, experience and gut instinct to decide where best to invest.

Long ago computers made dealers redundant, yet brokers and their ilk have remained the masters of the investment universe, free to buy and sell wherever they see fit.

But the last bastion of the old order is now under threat.

Investment decisions are no longer being made by financiers, but increasingly by PhD mathematicians and the immensely complex computer programs they devise.”

While there are many differences between this activity and the legal profession, there are also plenty of similarities.

Once you start really looking at what lawyers do, and begin to grasp what technology is already capable of, a real threat to the profession as we know it doesn’t seem so far fetched.

Entity recognition (understanding, finding and cross-referencing individuals and organisations in documents) is already well established, and software like Autonomy (“the leader in meaning based computing”) can do magical things in terms of identifying relationships between “things” and deriving meaning from raw information (think “facts”).

Look at recent developments in ediscovery and contract management software, and have a read of Jason Wilson’s great post on lawyers “I am now an app” for lawyers, and of course, whether you agree with him or not, do revisit Susskind’s work .

For me, rather than the commentary in the area, what makes me really believe big change is coming, is what I hear and see when I talk to some of the leading technology thinkers in this area.

To hear them describe the law by talking about decision trees and statistical probability (based on historic data and future trends), to hear them explaining rules engines, logic and information structures, really makes me pause for thought.

It’s a different language, but with the same objective of solving problems and creating value for clients.

This type of technology promises paradigm shift in speed, accuracy and cost reduction that goes far beyond what an LPO could offer with a human based process.

Of course it’s not that simple. Apart from the very real time, effort and money required to build the technology, aside from the judgment required to apply the law, there is of course a truly human element in providing legal service (that word is a clue). This service wrapper is likely to keep large chunks of the profession safe for a while, and of course as one work type is automated, the opportunity for the profession is to find a new, higher value area of law to explore.

My (human!) instinct is that it will be lawyers who first use these new generation of tools first, to provide faster, better services to their clients, rather than clients using them directly to replace lawyers.

The lawyers may be at traditional law firms (large or smaller niche players) or LPO or other volume providers. Either way the early adopters will become the Terminators, the firms that resist will be Sarah Connor.

Seems far fetched?

My belief is that the fundamental changes now facing the profession are only the beginning of the beginning, and that technology will shape the end game far more than any of us can probably predict.





The legal market place – carnage or opportunity?

7 10 2011

When you look at the legal marketplace, what do you see?

With the implementation of the far reaching Legal Services Act finally happening in the UK (albeit with some fairly significant delays in related regulation), it seems the right time to step back and assess the state of the market.

Talking to people in the profession about this, from partners to in-house lawyers, business development directors to IT professionals, through to trainees and law students, one thing is clear.

There is no single opinion on the state of the market right now.

In fact, nothing could be further from the truth.

Opinions are strong and polarised.

Is the glass half empty or half full?

The world of pain

One group see the profession as an industry in decline.

Painful struggles with increasing firm overdrafts and personal debt are symptomatic of underlying structural problems with the profession, and the cash flow challenges facing many firms are just another indicator that it’s time to get out before the interest rates rise and bankruptcy looms large.

With lawyers at both small and large law firms working harder than ever, increasing competition from overseas firms and LPOs becoming more visible, and constant talk of a new wave of competition, does not fill them with hope that easier times are ahead.

Small firms worry about hyper efficient, large scale competitors with a resource base, national reach, consumer brand and technology platform  that they simply can’t match. Large firms worry about transactions being disaggregated and large chunks of profitable work being placed with legal service providers with a cheaper cost base. Mid-sized firms talk about being squeezed, with larger firms looking for work in new markets just to keep their associates busy while they weather the current economic storm, and about smaller, more agile firms  punching above their weight.

These people can often see the need for change, but despair of the pace of change in many law firms, pointing out that the culture and consensual nature of partnership often make decisions glacial when they need to be made at the speed of the digital world we now live in.

They look at the management of their firm, and question whether they have the right skills and experience to thrive in such a turbulent environment. Management themselves wonder how they can free themselves from operational fire-fighting to spend time focussing on the strategic questions that will define their firm’s future.

The lawyers lower down the pyramid see equity structures remaining in some firms that encourage low performing partners to sit back and coast, while the best talent works their asses off and often still finds it impossible to break into the club.

Below them are a generation of students who have made a huge financial and personal commitment to enter the profession, and are finding training contracts like gold dust. Those that are lucky enough to find work may be confronted by suggestions that the legal training system is in need of reform and is not equipping graduates with the skills they need to excel in the profession and exceed client and colleague’s expectation.

They may also be confronted with a linear career path, and find that if that’s one they are willing to follow, then the demands made by the firm are at odds with a generation Y philosophy that puts greater emphasis on work/life balance.

Those who see the world in these terms often point to clients showing less loyalty and who have ever increasing expectations in terms of service standards, yet in the same breath are looking to pay less for that service. A widespread rejection of the hourly rate billing model leaves many firms struggling to come up with a viable alternative and without the capability to re-engineer their business model to support these new fee structures.

The downward fee pressure squeezes profit margins further, and even after several rounds of morale-sapping restructurings and redundancies, with economic growth in the core western markets slow at best, there’s no end in sight.

Pretty grim huh?

Now those that know me know that I’m on balance, a pretty upbeat person, so let’s try and bring a bit of balance to the picture.

There are plenty of people out there in the profession who don’t think like that. Who see the current time of change as tremendously exciting. These are the people who see

A world of opportunity

First and foremost they see an incredibly profitable sector that has weathered an unprecedented recession and shown real resilience with relatively few high profile casualties.

They see businesses with the ability to offer a broad portfolio of services that add real value to clients at critical points in their lives or organisational existence. Many of these services are counter cyclical (helping manage difficult economic conditions) and many of which allow the lawyer to genuinely claim that coveted position of trusted advisor.

It’s not hard to point to law firms that have access to senior people at some of the best and biggest companies in the world and advise some of the most influential people who are shaping society.

For those in the UK, having a core competency in the English language and the common law system that underpins many other legal markets means firms are well placed to support global businesses and expand intro higher growth international markets (as indeed many UK firms have done very successfully).

While there would be an acknowledgement that the bar for client acquisition and retention is being constantly raised (particularly by increasingly sophisticated business development professionals and practices) this is raising standards in the profession and represents progress. There is still a huge opportunity to win by being ahead of this curve and setting the pace.

For those with one eye on the future, advocates of the profession will point out that the chance of a career offering not just the potential to earn big bucks, but one that can offer a lifetime of intellectual challenge and stimulation, will always attract its fair share of top talent, and that the training and development opportunities within law firms have improved massively over the last ten years.

Those who see opportunity see the ability to innovate as being a genuine source of competitive advantage, and are looking at technology, process and efficiency as ways of maintaining and indeed improving profitability in a fast changing market. The ability to change quickly is a key enabler, and they recruit the people with the ability to adapt and thrive to make this a reality.

They also see that market consolidation can offers opportunities. Low price acquisitions, the ability to pick and chose individual teams, to make strategic acquisitions of particular clients or relationships, and the clearing out of some of the noise in the market place.

Yes clients are demanding “more for less” but that’s a common refrain across all business these days – the change facing the profession is not unique and in  many other industries there are organisations that came out as big winners.

A somewhat simplistic categorisation, but I urge you to reflect – which messages resonate most, and critically, what are you going to do about it?





What’s the end game?

30 09 2011

I was with a group of law firm partners from different City firms this week, listening to them discuss a case study about super-profitable US law firm Wachtell, Lipton, Rosen & Katz. Aside from their phenomenally successful business model and profitability (with the Amlaw100 reporting profit per partner of over $4m), one of the points that provoked most discussion was the idea that many of the partners would retire from the firm in their early forties.

Doris was overjoyed to hear she'd finally made partner

One response from the group was “that’s just coming into your lawyering prime”, which really got me thinking about careers in the legal profession, how they’re changing and ultimately what the end game is for many lawyers.

It used to be simple.

When I entered the profession in the mid/late nineties you joined a firm, did your training contract, hoped you’d get kept on, and if you did took your place on the conveyer belt. In the larger firms this often meant increasing specialisation and more often than not, increasing your hours.

In particular it was understood (albeit often unspoken) that the years between two and five years post-qualification were the proving ground. Where firms got to weed out those who were not suitable for partnership, and consequently lawyers were competing to prove they were up to the job.

This ethos, coupled with the leverage dynamic (with a smaller number of equity partners generating huge fees from supervising and managing junior lawyers) and chargeable hours model saw associates happily prepared to work all hours as they strived for partnership. The pot of gold at the end of the rainbow.

Every year their increased experience meant law firms could up their hourly chargeout rate, meaning in turn that as long as their chargeable hours stayed high, a nice chunky payrise was available, thus providing a short-term incentive for the associate to stay in the game.

Now this approach certainly had its faults, but it was largely understood and accepted and as a result it worked. Hell, early in my career I was certainly prepared to play by those rules.

But things have changed.

That model is breaking.

Firstly, the concept of work/life balance arose. Slowly, softly at first, it began to gnaw at some of the Generation Xers. Marriages came and went and at both points, people began to pause for reflection. Children brought matters into even sharper focus. None of these events were new, but society’s attitudes were changing and the legal profession was not immune from this.

With the emergence of Generation Y, the trend began to accelerate. I vividly recall a conversation with a managing partner of similar age to myself a couple of years ago, where he shared his frustration that many of his assistant solicitors wanted to leave work at 6pm. He understood this, but having put the hours in himself at that stage in his career, found this attitude difficult to reconcile with the drive and focus he expected from his young lawyers.

At the other end of the spectrum, change was also afoot. Many of those partners who had put in the hard yards and had been through the grinder were looking round and asking “is this it?”. Some had migrated into management as this was seen as the only upward progression, but either didn’t like it or weren’t suited with it. Others began to see the downside of their high levels of specialisation by craving a broader workload.

The model was also being tested by the market. A growing rejection of hourly rates, and more sophisticating procurement of legal services caused clients to question firstly whether hourly rates were suitable, and secondly, if they were, why they should be paying more for a particular resource than they paid a couple of months ago (simply because they had another year PQE and their rate went up) when the value delivered was exactly the same.

As the career model began to crack, the consequences began to emerge. Moves to in-house roles, into venture capital and private equity companies became more common, and law firms began to adapt by creating different career paths and non-partner senior roles such as “Of Counsel”, “Legal Director” and of course “Consultant”.

But with the structure of the profession fundamentally changing due to trends such as outsourcing, technology, commoditsation and globalization, is this enough?

While the supply of law students far outsrips demand, the answer I suspect is that the slow changes to the status quo will probably be sufficient in the short term, but ultimately as the profession reconfigures to meet the changing needs of the market, new and better career structures must emerge or I believe traditional law firms may begin to lose heavily in the global war for talent.

 





The Joy Of Secs (secondments)

22 09 2011

I’ve been hanging out with a lot of in-house counsel recently, and one thing’s clear.

They love their secondees.

Really love them.

The working environment on secondment wasn't quite what senior corporate associate Sarah was expecting

Whether it’s a GC who is relying on a specialist skill set that he or she can’t quite find the budget to recruit, a mid-level corporate counsel who is working with a junior lawyer from private practice who helps with the “heavy lifting” on a big deal, or a small in-house team that find having a secondee gives them much broader access to their external law firm’s resources than their usual interaction – the sentiment is unanimous.

For law firms, secondments offer some incredible benefits too. Time and time again, clients point to knowledge of THEIR business as a critical factor in selecting their external lawyers. The insight secondees getting living and breathing in that environment can’t be gained from market research or reading up on the company. Plus, alongside the knowledge of how a client works, their culture, their pain points comes the opportunity to build broader and deeper relationships – not just with the in-house teams, but with their internal clients too.

Where a secondment programme has a rolling element (whether trainees or more experienced lawyers) and the firm puts in a continuous series of lawyers over time (for example a change every six months), this can build an incredibly strong connection over time between firm and corporate team and build a powerful competitive advantage for an incumbent law firm.

Outside of the particular secondment relationship, lawyers often return to private practice with a broader skill set and a better understanding of clients at a more general level, and are much better placed to empathise with the in-house community as a result. Plus in-house experience, even at a secondment level, really does does count when pitching for work with corporate counsel.

So it’s all sunshine and light?

Hell, let’s try and stick everyone on secondment and then we’ll never lose a client. Right?

Alas, it’s not quite that simple.

The major challenge law firms face is economics.

The basic premise of a secondment being that if a client has enough of the right type of work (generally consistent in terms of volume, skill and experience required), but not enough to make permanent recruitment an option, then taking a single lawyer on secondment will be cheaper than paying for that resource on an hourly rate basis. In return the law firm gets guaranteed utilisation of the lawyer, a degree of certainty of revenue and predictable cash flow.

But the world has changed. Because the competitive intensity in the legal market is increasing rapidly, and because firms have wised up to the broader benefits of secondments (set out above), the price that in-house teams have had to pay for a secondee has fallen rapidly.

As the economy tightened, putting secondees in “at cost” became more prevalent. At a superficial level, this again made sense – with firms restructuring and struggling to find work to keep all their lawyers busy (and therefore employed), farming them out to clients allowed them to retain their good people while keeping clients happy.

But in reality, often the exercise often ended up costing the firms more than they anticipated. Questions arose to what “at cost” actually meant. Was it salary cost (and if so did that include benefits, bonus etc)? What about a proportion of overheads (often asked as the finance director walked past the secondee’s empty desk in an expensive City location)? Who picked up the tab for the upgraded laptop that was required to get on the client’s network? What about the opportunity cost when another project turned up unexpectedly and the firm was struggling for a particular resource profile to do the work efficiently?

As the requests for secondments increased, difficult decisions had to be made – who can we say “no” to? If we say “no” will another panel firm put someone in? Is it an investment rather than a revenue stream, and if so, how do we calculate the return on that investment?

Competition for resource within firms, already fraught with politics in many cases, heightened.

The pressure on resources is made worse still when a secondee doesn’t return (not as sinister as it sounds!). Two common outcomes are that the secondee “goes native” and is simply recruited by the client. If the relationship with the law firm is financially material, the firm will have limited ability to negotiate any form of compensation, irrespective of terms in the engagement letter. The other alternative is that the secondee gets a taste for in-house life, and after returning to the law firm simply finds another job with a corporate legal team as quickly as possible.

Speaking from experience, while I had already decided that an in-house role  was probably the next move for me, three months I spent on secondment a year before I made that move did help to crystallise my thinking when the time was right to make the change.

Another challenge is for longer term secondments, how does the law firm effectively keep the connection with the secondee? I’ve seen this challenge at several levels – from the junior associate living out of a hotel for nine months, disconnected from her peers and far from her family, to the partner slowly becoming marginalised in the partnership and losing the emotional connection to the mothership.

Pros and cons.

Swings and roundabouts.

To my mind however the overall value equation is clear. If the engagement is structured well, the economics thought through and the fit between secondee skill set, personality and appetite with the in-house team’s culture and need is good, a secondment is a winner every time. The key is not to assume every secondment fits this model and to put the time in up front to get to a working relationship rather than to simply react and throw resource in at every opportunity that comes along.

Happy seconding.





Why sorry is the hardest word

14 09 2011

I had a very interesting conversation with a colleague yesterday around a workshop he was facilitating for a fairly sizeable group of lawyers. As part of the discussion he asked the question “how many of you have ever been the subject of a client complaint”.

Our subsequent discussion centred around the fact that the solitary hand that was raised did not seem representative of the either the statistical probability of the number of complaints from the group (there was probably well over 150 years of cumulative PQE in the room) or the amount of unspoken discomfort in the room.

Adam readied himself to discuss his drafting mistake with the head of department

I’ve written before about why lawyers find it difficult to admit they are wrong (a training based on hiding weaknesses in your client’s arguments and exploiting your opponents, and a pathological fear of negligence claims), but the point I want to explore here is how much harder it is to deal with the consequences of a mistake, if you can’t admit it in the first place.

My starting point is that mistakes will happen. I don’t care how good you are as a lawyer or a law firm, while legal advice is predominantly a human activity (as opposed to automated or process based), the human factor remains fallible.

You, me, none of us are perfect.

Now of course you can minimise the risk of mistakes – quality checks, supervision, training, best practice etc, but at the moment I’ve yet to come across any law firm partner that can hand on heart tell me the firm has not made a single mistake in the past 12 months.

And as work becomes more complex and has to be done at ever increasing speed, the possibility of mistakes may well increase.

So mistakes are going to happen. The question is, how are you going to deal with them?

The majority of larger law firms and corporate legal departments have some type of relationship. Some are more transactional than others, but I’ll make an assumption that the mistake happens in the context of some type of broader relationship, not least because that’s when both parties are likely to care more about it.

My experience both in law firms and in-house tells me firms can deal with mistakes really well, or get it spectacularly wrong.

Let’s deal with some classic unhelpful responses ( Twitter would categorise these law firm #custservfails) first:

  • Refusing to the acknowledge the problem – “advising around it” – effectively providing remedial advice to sort out the problem before the consequences become significance (“I see your point, we’ll add some additional wording in here, just to clarify that”)
  • Blaming the client - implicitly or explicitly (“well, if they’d given us clearer instructions this never would have happened”)
  • Glossing over the problem (“lucky we caught that in an early draft”).
  • Sorting the problem out without any sign of good grace or contrition (“leave it with us”)

Perhaps my favourite example was a conversation I had with a law firm where I’d had a repeated breach of my company’s outside counsel policy (which explained among other things, who in the business could instruct external lawyers, and what involvement the legal department had to have with a matter). After the third clear breach since I drew the point to their attention, I asked for a meeting with the relationship partner to get to the bottom of the issue.

I have to admit to being amazed when the partner turned up with two of his peers from different departments, with a clear plan to try and turn the meeting into a cross-sell pitch. I was certainly expecting the “S-word”, but it wasn’t “sales”.

  • No apology.
  • No self-awareness.
  • No more instructions.

But it’s not all doom and gloom. Several firms I worked with were very good at managing the occasional mishap.

One of the most telling signs was where the law firms brought a mistake to my attention, particularly as there was a chance the error might not have got noticed. For example, I’ve had that happen when there was no chance at all of me noticing, because the error arose as a result of a translation from Arabic (where the law firm had arranged the translation).

This builds a huge amount of confidence, and in every case where that has happened, the firm also presented an explanation of why the problem arose, and (critically) a plan to make sure it didn’t happen again. Viewed in this light, problems can be an opportunity to improve the service for the future, and build genuine trust with the relationship.

To me, as a client, that open dialogue is critical.

It works both ways too. Rather than bitch and moan about poor service (which can be more than a simple mistake, as it involves performance measured against expectations, which in some cases may not be explicit), I believe it’s in both parties’ interest for the client to raise the matter with a law firm, and to do so in a clear and specific manner which allows the firm to take action.

I’ve done that in situations where this has helped the law firm have difficult performance management discussions with under-performing staff and also improve processes that have benefitted multiple clients.

Now if this sounds like some sort of rose-tinted utopia, let me be clear – it’s not. Not all of these conversations are easy, (“Difficult conversations – how to discuss what matters most” is a great read by the way) and at times can be uncomfortable, but I do believe that putting in the effort beats the alternative for both parties – a dysfunctional relationship benefits no-one.

There are also times where the scale of the screw up is so monumental, that the relationship simply can’t be saved (for example the reputation damage to the law firm within the client business is so great that the in-house lawyer would lose the confidence of his or her clients by using the firm again), but those cases are few and far between.

In most cases, starting an open, honest and productive dialogue is the best way forward, and saying “sorry” might be a good place to start.








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