Ask and Ye Should Receive
Author: Richard Stock - Lexpert (June 2013 at p. 70)
Want to know whether your law firm is committed to defining performance? Ask the right questions
GENERAL COUNSEL are fond of saying, “I hire the lawyer, not the firm.” What this means is that they trust the relationship partner to assemble the right team and manage service delivery. Law firms, however, have become more responsive to specific requests and now carry an arsenal of resources to manage service delivery and profitability. These include client interviews and surveys, legal project-management tools and value-based fee arrangements. The relationship partner may not be current on each of these unless the client makes a point of asking.
Law firms are working in much more competitive environments than ever. Aside from legal skills and experience, the general counsel should know the full range of what their firm and its immediate competitors have to offer. They can then make informed choices and longer-term commitments to performance standards and for given volumes of work.
When a company wants to introduce more structure in its relationship with law firms, it should start by discussing and then documenting new arrangements for service delivery and fees directly with the firm. This is done more often for individual matters and projects than it is for a portfolio of work lasting several years.
But in some instances, the company wants to establish a panel of firms — something more formal than a preferred list. Specifications are written, a request for proposals is issued, and interviews are conducted to identify the frontrunners. Nine times out of 10, the successful firms are those that have been providing the bulk of the service over the years. This has been the pattern for institutional consumers of legal services — banks, insurers, utilities and various levels of government.
Seldom do we see an organization “go to market” for a significant, multi-year portfolio of legal services and agree to a partnering arrangement with law firms that have not been the primary providers of legal services. Only one out of 15 requests for proposal that I manage each year results in the selection of a new primary firm.
The most recent example of a client making the switch to another primary firm was one of the most interesting I have been involved with in many years because of the client's focus on performance for service delivery and on pricing. This particular client organization had several criteria: the need for coverage in a large number of jurisdictions on two continents; assurance that the calibre of legal work was being controlled for quality; simplified administration for the entire arrangement; better ongoing statistical reporting, and a pricing arrangement with the firm that rewarded performance. The firm and the client both had to have "skin in the game."
But not every law firm culture is committed to defining performance in legal services, aligning it with client objectives, measuring it, and then putting some of its fees at risk. My review of seven competing proposals for the work revealed significant cultural, philosophical and economic differences among the firms. Only by asking a number of additional probing questions was the company able to determine the real differences in the firms’ responses, and then make choices aligned with its own priorities. (You’ll find some of these questions in the sidebar above.)
Even if there is no formal request for proposal planned, however, general counsel should have the answers to each of these questions to better demonstrate quality assurance, efficiency and service delivery from preferred firms.
PROBING RFP QUESTIONS: A direct line of inquire will help you identify firms that think outside the box
What are your most successful partnering arrangements/experiences?
Would you agree to let us speak to these clients should we so choose?
What are your most recent innovations in service delivery?
What would be your preferred partnering and pricing arrangements with us for the period covered by this RFP? Provide suggestions to improve work intake and allocation practices for our organization.
Do you support the rigorous use of project- or case-budgeting and -management tools for all files over 50 hours?
Has your firm introduced "legal project management" software and training for partners in the past two years? If yes, please describe.
What is your pricing philosophy for 2013 to 2015?
What is your experience and interest in value-based fees?
Is your firm prepared to stand behind the service, results and price of your correspondent firms? Outline the type of training and support that you give your relationship partners for this role.