The Association of Corporate Counsel this week announced the appointment of six new members to its ACC Value Challenge steering committee with backgrounds in the pharmaceutical, banking, social media, travel, and retail industries.
The new committee members include Jelich as well as Bob Harchut, vice president and associate general counsel of GlaxoSmithKline; Eileen Kett, senior vice president, general counsel at Club Med; Roberta L. Lang, general counsel and global vice president of legal affairs with Whole Foods Market Inc.; Ellen Rosenthal, vice president and assistant general counsel litigation/chief counsel at Pfizer Legal Alliance, Pfizer Inc.; and Erika Rottenberg, vice president, general counsel, and secretary for LinkedIn.
Jelich will help provide practical guidance for in-house counsel and law firms seeking to bridge the gap between value and the cost of legal services.
Currently based in London, England on assignment for RBC, Jelich says it’s an interesting time in the economic cycle in terms of how firms are thinking about what their financial model will be for the future.
“They’re doing some of their own introspective thinking that isn’t just client reactive,” she says, adding that while legal process outsourcing has broken more ground outside of Canada, law firms know it is a threat.
“Part of the Value Challenge and pressure on firms is the growth of LPOs, which we’ve seen a little less of in Canada than in the U.S. or U.K. In the Value Challenge one of the things the ACC has been talking about both in-house and with firms is taking any piece of work and breaking it up to see who is best to provide the service rather than the historic approach which is you hire a firm and let them figure out how to handle each of the parts.”
RBC has been a leader in Canada on the issue of the Value Challenge for several years with executive vice president and general counsel David Allgood leading the charge.
“We have a goal of getting to 50 per cent of our billings being value-based over the next three-to-four years,” says Jelich. “So in terms of talking about it and asking firms to respond to it, we’ve been doing a lot of that in Canada.”
She says part of the education around value-based billing is to understand that it’s not about getting a discount.
“It’s a completely different metric; you have to get people to think about what those metrics are and what works for them and not to fall back on asking, ‘What would it have been on an hourly basis just so I know that I’m saving money?’ That’s not the point of the exercise. It’s an alignment exercise — it’s about aligning expectations and aligning goal-setting between the firm and in-house management of the case.”
That can be a difficult transition and different way of doing business for in-house counsel and law firms when both have historically been focused on hourly billing.
“Traditionally, with an hours-based model — not that the firm isn’t trying to do the best for its client — but from a financial perspective the firm is incented to make things take longer, that’s how they get paid. From a value-based perspective you want them to come to the result that is more sensible and good result for you which may mean a very short duration.”
Since it's launch three years ago, the ACC Value Challenge has had a tremendous impact on the relationship between law firms and their clients.
“This esteemed group of in-house counsel will help us to further the efforts started in 2008 and to achieve new milestones, including greater use of project management tools and innovative training programs,” noted Elisa Garcia, ACC Value Challenge Steering Committee co-chairwoman and executive vice president & general counsel, Office Depot, Inc.
The ACC is also about to launch an initiative celebrating “ACC Value Champions,” a recognition program to feature successful law department initiatives and firm/client collaborations.