"Get naked and be a pig.” You’re not going to get much more vivid advice from an in-house client on what their expectations for service are.
This gem came at the Thomson Reuters Law Firm Leaders Forum in New York last month. Wrapping up a panel on client relationships, David Cambria, global director of operations for Archer Daniels Midland Co., hit the room with this one. The getting naked part was about being willing to take on risks and be proactive with your clients. The being a “pig” part he related back to his ham-and-egg breakfast. “The pig,” he noted, “was committed; the chicken was just involved.” Maybe not the most “tasteful” analogy, but you get a strong sense of what he’s trying to say.
While this was probably the most graphic description, the in-house counsel at the two-day event brought up the importance of getting to know their businesses endlessly, and, of course, the question that always followed to the law firm leaders in the audience was “why aren’t we doing it already?”
Maybe it was the group of senior counsel speaking at the event, or perhaps it was because they’re all American with a different point of view, but the results in this year’s Canadian Lawyer annual Corporate Counsel Survey are not quite as emphatic. Knowing the client’s business better only came in fourth spot in the question we asked about what legal departments felt was the most important thing their service providers should do for them. Being concerned with results topped that list, followed by acting on feedback, and being more proactive. Although it could be argued that being more proactive goes hand in hand with knowing more about the client’s business and thus combined those would shoot to the top of the list.
This year’s survey also takes a pretty deep look at alternative fee arrangements. Despite all the talk about AFAs, almost 47 per cent of respondents said the billable hour is still the main billing arrangement they have with their primary firm. Billable hours combined with flat fees came in second and quite a distant third was AFAs. And again, as is mentioned by Jennifer Brown in her article on the survey, the question of whether discounts are AFAs came up at the forum. A lot of firms give discounts, but there was pretty much consensus across the board that giving clients discounts was not healthy for either side in the long run. “If you’re discounting what you do, you still have to figure out how to do it,” noted Brad Hildebrandt, chairman of Hildebrandt Consulting LLC.
As Ralph Baxter, the chairman of Thomson Reuters Legal Executive Institute, pointed out, what law firms need to figure out in terms of their financial models is pricing. It should be based on value, cost, and adequate profits. Working with that equation, combined with understanding your firm’s processes and resourcing and more collaboration with outside or third-party resources (LPO, OMG!), should mean fixed fees will become more prevalent. That’s what he predicts, or at least hopes.
Our annual corporate counsel survey gives much food for thought. The legal landscape is evolving, ever slowly. Law firms need to learn to work differently; law departments are also growing and morphing within their corporate environments; work may be moving from big to smaller regional or boutique firms and then maybe back again; the numbers of alternate service providers is growing; technology is continuously changing the way we work. The result: Legal practitioners of every stripe must evolve. And I heard a lot of people say it — so it’s practically indisputable — that relationships that show you and your firm know and care about the client beyond every billable unit is what in the end will set you apart.