Susan gave a highly acclaimed talk at this year's ReInvent Law conference in New York City on February 8. This article is a companion to that talk, digging into the topic of clients and the in-house behavioral changes necessary to re-engineer the legal function, inside and out. In the article, Susan asks: Why don't in-house clients demand value-driven, efficient, and results-oriented legal services? Why don't they engage only those providers who will help them demonstrate the business value of the legal team to the companies they serve?
James Carville, the outspoken "Ragin' Cajun" political strategist for Bill Clinton, famously pasted a sign on the wall of the war-room of the Clinton 1992 Presidential campaign headquarters. The sign was there to remind Clinton that while he could quite capably concentrate his comments on a wide-ranging number of issues that were interesting to him, all of those issues weren't necessarily what was important to voters. Carville's sign said: "It's the economy, stupid." Clinton listened and changed his behavior. Clinton won.
Law firm lawyers love to talk and talk and talk about what's important to them as lawyers. But they often forget to think as much about what's important to the client (or worse yet, outside counsel assume that their clients must value the same things they do).
I would like to suggest that when it comes to all this change we are experiencing, outside counsel need to keep a few things firmly in mind
If James Carville were reading this article, about now he might be muttering: "It's the CLIENT, stupid."
Corporate counsel are lawyers who became clients (on behalf of the corporate entities who employ them). Corporate counsel are responsible for placing and supervising the vast majority of the world's legal spend, and they drive the legal service markets through their decisions of what to buy or not buy. But they don't seem interested in driving the change that even they would admit is long-overdue. While times are slowly changing, the market and service delivery is still predominately determined by what outside counsel (and former outside counsel in the form of in-house lawyers) believe is the best legal service delivery model. Put differently, it's dominated by what outside counsel want to provide, not what in-house counsel and clients say they want to purchase.
Why don't in-house clients demand value-driven, efficient, and results-oriented legal services? Why don't they engage only those providers who will help them demonstrate the business value of the legal team to the companies they serve?
If you want to understand what drives in-house counsel (or impedes their ability to adopt new work habits easily), perhaps it's useful to step back and examine in-house counsel's DNA.
Most in-house counsel are lawyers first, and clients second. In-house counsel went to the same schools as their outside counsel; they studied the same books. They revered the same first jobs; participated in the same interview processes, summer associate programs, bar exams, entry-level boot-licking apprenticeships; and endured all the same practical training experiences as outside counsel. Heck, they didn't just share the same formative experiences with their outside counsel, they were outside counsel: the vast majority of in-house lawyers come from firms where they worked for an average of 10 years before going in-house. That means that just as many were partners when they went in-house.
In their formative lives as outside counsel, in-house counsel were not paid or trained to work more efficiently or develop project management skills or price legal work based on its worth (rather than the hours it takes a lawyer at X rate to finish the task). It's crazy to assume that once a lawyer crosses the threshold of a company for an in-house job that he or she suddenly transforms into "Super Value Lawyer."
There are some incredibly brilliant in-house lawyers (and outside providers, too) who drive better business practices in their work – they are business people first and lawyers second. We all know at least one or two of them.
While corporate counsel understand and appreciate the logic of value-based practices, the vast majority of in-house lawyers want and buy exactly what it is they complain about all the time: hours based, extremely expensive, highly-pedigreed legal services from big reputation firms. Why? Because it is what they are most familiar with themselves. Change is hard, often not rewarded, risky and unknown.
But the reality of life for corporate counsel is changing. Because increasingly, their internal clients and stakeholders are unwilling to accept excuses for less than efficient and effective services (as defined by quantifiable contributions to the protection of the business and acceleration of the company's goals). Management knows that law is unpredictable, but so are their businesses generally. Simply put, they're just not going to take it anymore.
If corporate counsel don't step forward to aggressively push better practices (instead of one-off savings such as discounting rates), they risk becoming just as obsolete as some of the indistinguishable large law firms out there will become. They will be recognized as good lawyers and great people, but not the choice of increasingly savvy executive management in companies who are demanding more than great legal skills from their in-house lawyers. As the tide changes, executives will be able to select from emerging service providers, technology and more, importantly, a new generation in-house counsel who are committed to driving the inevitable value.
So back to the issue at hand: creating the change that corporate clients need but that most in-house and outside counsel feel uncomfortable or incapable of providing. What we need is not just another product or a better service model, but a defined and manageable path toward behavioral change. Change will require lawyers to look at all the good practices out there and then be realistic about how those practices should be sifted and implemented in order to provide manageable change (rather than present radical risk, in the eyes of those who will have to try new things).
It's all about serving up change in a palatable, manageable, and quantifiable way. You want to thrive in this new world order? Stop selling what you want to sell and start modeling and providing what clients need to drive behavioral change, improved results, and demonstrable value.
What change do you desire? How is your law department working to implement these changes? What are some of the best practices you have seen in implementing change? Contact Susan via e-mail or tweet her at @HackettInHouse to keep the conversation going.
For more on Susan's take on the New Normal of the legal industry, view the August issue of Corporate Counsel Connect.
Susan Hackett is the CEO of Legal Executive Leadership, LLC, a law practice management consulting firm she founded in 2011 after serving as the Senior Vice President and General Counsel of the Association of Corporate Counsel (ACC) for more than two decades. As an insider working with thousands of top corporate practice leaders, Susan has an amazing breadth of experience with the inner workings of in-house practice and the implementation of value-based legal models, as well as an international reputation for innovation, excellence and success. Comments welcome to firstname.lastname@example.org.