Every year, retail giant Target brings the “best and the brightest” from its external law firms together in Minneapolis for a two-day outside counsel conference. This event, held in November, is now in its sixth year and invitations are considered an honour, if you’re performing well. If not, it’s an entirely different experience, but still worth the trip.
“We don’t invite everyone but our 15 best firms are included. Two of the best people from the firms are invited and they must interact together. The first time we did this it was almost awkward for the first day — we made them work together on presentations to present to us,” says Eric Sjoding, director and assistant general counsel, employee and labour relations for Target Canada.
“We leverage a lot of different firms and we expect them to work collaboratively together,” he says.
For example, in nationwide class actions in the U.S., Target is leveraging a large firm in California and another in Minnesota. Getting them to work together is aided by having a matter-management system in the middle where they can upload documents and file share.
“We’re doing the same thing in Canada and working with three different firms on a matter to create one central depository of documents that will be produced in that case as a central resource,” he says.
The idea of such an interaction might make some firms squirm with discomfort, but it is a process Target’s legal department feels has made its outside legal business more responsive to the retailer’s needs.
The firm with the best results is recognized at the annual meeting in Minneapolis. For the two or three firms not at the top of the scorecard, an invitation is extended to stay an extra day in Minneapolis, after the conference, to discuss how things can improve.
“We go through the scorecard and have a tough conversation with them and set up expectations of where they are going to be in providing overall service and on things like diversity and gender metrics,” says Sjoding, noting it’s a preferred method over cutting them off and trying to establish a new relationship with another firm.
“If it means kicking a partner off if the rest of the team can be salvaged that’s absolutely something we have done and will continue to do, even if it’s the billing partner.”
Target also conducts annual reviews with each firm it works with and measures how they are performing in a number of areas. It starts with a self-review by the law firm, much like what happens with any Target employee performance review.
“We ask them to measure themselves on the same measures that we will then evaluate them,” he says. “We use a scale from one to five. Pretty much everyone gave themselves a four on their self reviews and ironically the only firms that gave themselves fives were the firms who did the worst on our internal rating,” says Sjoding.
The internal reviews of the firms are not just completed by Target in-houselawyers. Paralegals, admin staff, and human resource partners also rate the firms.
“We rate them on their ‘bedside’ manner with store managers and staff they may interact with. They may be great with me but are they an ass with my paralegal? If so I’m probably not going to work with them. The last thing I need is for someone I’ve hired to represent my brand to be lousy elsewhere.”
Diversity and inclusion metrics are also included in the overall scorecard of the firms Target deals with.
“We make them give us a ton of information on how they are bringing in diverse talent, retaining it and promoting it within their law firms,” he says. “Companies like ours pushing law firms and holding them to account is the only way the law profession, at least in the States, is going to improve themselves on measures like diversity and gender.”
When Target begins opening stores in Canada next spring, it won’t just be bringing its much-anticipated retail savvy — its law department plans to roll out the same philosophy towards external firm management and alternative billing arrangements it has with its external firms south of the border.
“We’re excited to bring the learnings we’ve had in the States up here, and frankly the firms have been very open and willing to work with us and build a relationship,” says Sjoding.
The Target legal team in the U.S. consists of about 18 attorneys and 100 people total, including HR and operational partners spread across the U.S.
The retailer is working with three external law firms in Canada — Sherrard Kuzz LLP in Toronto, Roper Greyell LLP in British Columbia, and Norton Rose Canada LLP as its national law firm.
“We have already approached them for fixed retainers. As a new company starting in Canada we have put upper limits on those and asked for one rate for advice everywhere in Canada except for Quebec, and also built out, in preparation for litigation, negotiated blended rates per province with the one large law firm, along with fixed fee arrangements for employment and human rights cases and employment standards claims and workers comp,” he said at the Toronto Association of Corporate Counsel Ontario chapter meeting in June.
As Sjoding described the company’s review process someone at the ACC meeting in Toronto remarked that it sounded like a “going to the woodshed” moment. Sjoding dismissed it as being anything particularly negative, but pointed out that unless these issues are addressed, problems that are causing friction between the two teams wouldn’t change.
It’s the flipside of client feedback exercises law firms have been attempting to roll out over the last few years.
It may not be something every in-house department has the resources to do but if your firm isn’t asking you for feedback it may be something to consider.
From May to July 2011, LexisNexis Martindale-Hubbell in association with the Wicker Park Group canvassed 58 Canadian law firms to collect and compile their views on the value and objectives of client feedback initiatives. More than half of the firms in the study (57 per cent) had more than 150 lawyers and the same percentage of respondents were law firm marketing professionals.
Among the top objectives of client feedback programs reported in the study were identifying business development opportunities, uncovering problems, and increasing client loyalty — 92 per cent of respondents identified improving individual client relationships as the best use of the information gathered. Other applications included defining client service standards and as a tool in developing strategic planning.
According to Kelli Wight, director of business development for Cassels Brock & Blackwell LLP, firms can learn from client feedback on a variety of issues.
“Often when people are in the throes of working on a deal there’s never the right time to bring up something that may annoy someone. Whereas when you actually sit down and say, ‘I want to hear about what’s happening,’ that’s the perfect time for the client to bring it up,” says Wight. “Almost all clients have some sense of annoyance.”
The challenge for large firms is deciding which clients to solicit extensive feedback from.
“The very large clients are often such a centre of focus for a firm but it doesn’t mean there aren’t problems. Often people feel if we’ve interviewed our largest clients we’ve covered it off, whereas you might find the most opportunity for improvement and business development will be with those people you aren’t talking to as frequently,” says Wight.
Some firms hire consultants to do reviews with firm clients, but Wight questions the value in those as opposed to someone who represents the firm and is in a position to make changes. In the case of Target, they choose the two people they work with the most so that the feedback they provide is served up to the right source.
“The reality is it’s a time-consuming process. Our managing partner is going to be doing a client feedback interview in Woodstock in September and that’s a whole day. You have to question those who say, ‘We interview thousands of our clients every year.’ I would question who is doing those interviews, how good are they, and how diligent is the follow up process?”