The International Man Of Mystery?

7 06 2011

Are you the law’s international man of mystery? The answer to the prayers of corporate counsel in global companies? Can you leap jurisdictions with a single bound? Effortlessly unravel the tangle of law, culture and procedure? Wrap your arms around a wriggling mass of seemingly conflicting regulations, and fearlessly work with them to make compliance a reality?

Toby, the firm's anti-trust specialist, was convinced he'd got the right look for the international project kick off meeting

No?

Well don’t worry, you’re not alone.

Conversations with in-house counsel about the difficulties supporting business overseas often have familiar themes (more on this later), but what’s becoming clear is that these challenges are becoming more acute.

Whether it’s the sheer volume of international business increases, the interest in emerging markets continuing to heighten as western markets stagnate or become saturated, or technology adoption increasing the ability to communicate effectively across the world, more and more in-house lawyers are being asked to operate in jurisdictions which are often way outside their comfort zones.

Bear in mind also, that many of the challenges described below might be experienced by those in a law firm that is supporting an inhouse client with an overseas project (and this applies even with a global firm working cross-office) almost to the same degree as an in-house lawyer.

The problems start with the ability to quickly identify what the relevant issues are. It may be that you have an idea of what they are – the big headline-grabbers like anti-trust, employee issues and anti-corruption legislation are obvious examples. However, it may be that there are a bunch of the infamous “unknown unknowns” which  might be substantive law, but they might also be difficulties around the legal process or simply understanding the legal system.

Some of them you might be able to get an overview from research or asking the right people, but others will require hands-on experience of the situation you are facing.

Which leads on to the next step in the journey – selecting and managing local counsel.

Given that the problems above (not knowing what the key issues might be) immediately cause difficulty in having productive, early-stage conversations with business colleagues, it’s not surprising that they can also make the relationship with local external counsel much more difficult to manage.

The first challenge is finding the right lawyers for the matter in hand. Existing contacts, referrals from trusted sources and directories (online, paper) are often the first port of call, but even then the answer might not be the right one.

When I was inhouse I had difficulties both with specific offices of global firms (delivering anything but a consistent global service) and local firms that were recommended at a firm level, but who had individuals that weren’t up to scratch.

The next step is of course instructing the local counsel, which is understandably more difficult than using external lawyers in your own jurisdiction. Lacking an understanding of the key issues means giving a tightly defined project scope is difficult, which has a knock-on impact on costs and timescales.

There may also be softer factors at play, ranging from the more obvious such as language and cultural barriers (“what do you mean he’s out for lunch and won’t be back for three hours, we close the deal this afternoon!”) to those that are more difficult to put your finger on such as differing views of risk and mismatched service expectations.

For multi-jurisdictional projects, this is the point at which project management skills come into play. Assuming those skills exist (which is not always the case), invariably the international element to a transaction adds a bigger administrative overhead to the project, and critically for the business, lengthens timescales.

Which leads nicely on to billing.

It’s horrible.

Managing billing on an international project, particularly one in multiple jurisdictions, is invariably a nightmare which would warrant its own post. I’ve found the best strategy is to close my eyes and wish really (really) hard that all the bills arrive in the right currency, on time and for the agreed (or a reasonable) amount. Admittedly it didn’t work that often.

So, there we are. A post full of problems this week. There are mitigating strategies at almost ever stage of course – getting contacts on the ground (folks in the business can be a mine of useful information) is a great start, as is developing your own network of trusted advisors in major jurisdictions. Getting a baseline understanding of different international cultures helps (have a look at Riding the Waves of Culture: Understanding Cultural Diversity in Business) as does up-front conversations about expectations on both sides of the table.

However, my point was really that as a profession, we need to crack this. To efficiently serve clients, whether internal or external, in a global business environment, we need to provide a seamless service. It’s difficult, but not insurmountable – don’t you think?





The Good, The Bad and the Ugly (RFP Responses)

30 11 2010

Having just completed another RFP (request for proposal) process for legal services for a BPO company, and closed out the subsequent feedback process, it seems an appropriate time to consider the many type of responses I’ve seen when running these exercises.

Trevor from procurement was not impressed by Goldman & Partners' RFP response

Firstly a word about my approach. I’ve run RFPs covering legal support for outsourcing, commercial, employment, financial services, property and one-off projects in my time. My approach is generally to try and make the process as painless as possible both for my internal clients and for the law firms.

Let’s be honest, if the law firm is sweating over a 50 page response, and the potential client has six of these to read, evaluate and discuss, how many of the client senior management team will REALLY read and digest all that material? You may have your own view, but for those who think that execs have the time and inclination to plough through this stuff in a meaningful way, I’d respectfully suggest you read Davenport’s book “The Attention Economy“!

So, starting with the bit lawyers usually enjoy to hear about (when it’s not their firm) – the ugly;  the horror stories; the car crashes.

Names and other identifying details have of course been omitted to protect the guilty.

Perhaps my favourite was the international law firm, that tendering for a large scale, one-off project, set out in some detail how the project management function would be performed by a well qualified, senior associate. No problem with this so far. Methodology seemed sound, experience of the individual looked relevant and the cost of this person was transparent.

So where’s the beef?

Well, the fees section included a £75,000 project management fee. When I phoned up to enquire what this was for (when the cost of the associate performing the project management role was already baked in to the fees) I was met with an uncomfortable silence then a promise to “get back to you”. The resulting explanation was no less unimpressive.

Fail.

Another project management blunder was the law firm that on a project with the potential for high-six-figure legal fees put forward as a project manager a junior lawyer who despite being both (a) a very competent lawyer; and (b) a genuinely nice guy, was utterly unqualified for large scale project management.

This was evidenced at firm interview stage, when he described the firm’s project management methodology as “Lists. Lots of lists”. Sorry……

Inflexibility around fees is another bugbear. One project saw the company I was working with give sufficient information to price the work with a variety of fee structures, and specifically stated that hourly rate charging would not be considered. Five of the six firms bidding managed to put together compelling charging models, the other explained “We charge the following hourly rates”.

Not to us you won’t be!

Another project, which went out to tender late one summer, explained that for budget reasons it would be helpful for the company to delay payment until the next calendar year. The company explicitly acknowledged that it understood that this may incur an additional fee to cover the cost of the capital, and simply asked firms to make that fee transparent if there would be a charge.

All but one firms came back with an appropriate solution (some of which were quite creative). One came back, helpfully explaining “we bill monthly in arrears”. Thanks.

Ironically, the budget picture internally changed, and a large part of the fee was paid early in the project, providing the successful firm with an unexpected cash flow boost.

Finally, it’s a thin line between an ugly RFP response and simply a bad one (which I’ll look at next week), but this is a tale of a firm walking down that tightrope.

A recent tender that spanned multiple work types asked responding firms for each work type to set out their competitive advantage. One firm responding was an incumbent, and their assessment of their competitive advantage (for each work type) was simply “we work with you, we know your business”.

Now while that is undoubtedly true, I suspect that’s an implicit barrier to entry that all existing advisors enjoy, and to be honest it’s not an insurmountable barrier. To me, the fact that the work is going out to tender suggests that the prospect is considering a number of possible solutions to their need and complacency is not a good idea. If the incumbent firm were bidding for work with a new client, presumably they believe they have some competitive advantage? Assuming that’s the case, I would have thought it best to mention this to build a compelling picture of why they should be selected, rather than rely on the fact that inertia might make keeping the status quo easier than changing.

Let me finish on a less depressing note by saying I’ve seen some stunning responses to RFPs in my time, and while the good and bad are often fairly evenly matched, the ugly ones are relatively few and far between.

But… if you’ve got a response to an RFP going out this week, just have a final look through…..