Three of the five metrics selected across both sides derive from the core value ‘Knowing your Business,’ demonstrating the increasing importance of being closely aligned with the strategy and wider objectives of a client’s organization

Just under 80% of law firm leaders believed that skills in providing legal advice with a business focus was the most important to clients. However, this was reciprocated by only 44% of GCs

Q: What practical strategies can general counsel implement to ensure they are providing the best value to their employer?

Ryan Loro: The overall theme I want to emphasize is that communication is key. Firms should know exactly what’s expected of them. So in terms of practical steps, one of the most beneficial things GCs can do is to adopt a formal set of outside counsel guidelines (OCG’s). It’s striking to me how many companies don’t have them in place. And if they do already have them, they may want to revisit those guidelines and see what’s working and what’s not. It never hurts to revise, refine, and reassess. For the companies who don’t yet have their own OCG’s, my sense is that it’s one of those “some day…” projects that’s been hanging out there for a while but they just never find the time to tackle it. It’s an intimidating project to take on when you’re starting from scratch; many OCG’s are 50+ pages long, requiring endless drafts and sign-off from multiple stakeholders before they can be finalized. It’s a big lift for a legal department.

The other factor is that companies worry about how their firms will react - will this offend anyone or open a can of worms? But the truth is that many firms like OCG’s because of the clarity they provide. It’s important to remember that all but the smallest and most specialized boutique law firms are already accommodating multiple clients’ OCG’s and billing rules, so they have the capacity and willingness to accommodate yours too. As for the document itself, it doesn’t have to be a behemoth – even a 5-page list with bullet points on billing rules alone is more than half the battle. OCG’s serve a variety of purposes, but deterring questionable billing practices is, in my view, the primary benefit. Something is always better than nothing.

Q: When you push back on law firms’ billing practices, how is that received? Does it get contentious?

Ryan Loro: It’s actually surprisingly cordial. It’s important that the standards we are upholding are communicated upfront, so there are no surprises. But as long as that’s the case, often it’s simply a case of pointing to the rules when there’s any discrepancy. Firms will readily agree to reduce or remove charges if they’re genuinely excessive or non-compliant.

It’s also important to keep that line of communication open and give your firm a fair hearing. Often we’ll spot a big charge on an invoice that doesn’t seem to be justified, so we’ll question it, but if the attorney can provide a convincing explanation of what they did and why it was of good value to the client, it’s important to hear them out and consider everything fairly. It’s a helpful exercise because lawyers can get careless in their billing but it actually benefits them to show in detail exactly what they accomplished for their client with each new month’s invoice. The bottom line is that clients can be very deferential to the firms, but they should remember that they’re the customer and it’s the firm’s job to serve them and keep them happy. Firms care about these relationships as much if not more than their clients do, so they’re always willing to make things right if the client has a good faith objection to the way they’ve handled something.

 Q: Aside from billing, where else do you see a disconnect between clients and their firms that better communication could solve?

Ryan Loro: This is an area where I’ve learned a lot from the research conducted with GLL. I think one of the most striking insights was the gap between law firms’ own perceptions of their performance and their abilities, versus the perceptions of general counsel about their outside firms.

When asked if they have a good understanding of their clients’ business and the industry they’re in, literally every firm surveyed thought their clients were satisfied, but in fact one out of four GC’s disagreed – they feel like their business is not sufficiently understood by their own counsel. That’s going to lead to problems.

Firms can develop tunnel vision, when they focus too narrowly on the week-to-week legal work they’re doing rather than the big-picture concerns their client may have. What’s their risk tolerance? What are the business issues implicated in a given matter? What’s on the horizon that needs to be considered?

Law firms can assume they already have all the information they need, when in fact they would benefit a lot from some periodic check-ins with their clients to keep perspective on the full picture. GCs are the bridge between their clients’ business priorities and their legal needs, so they should make sure these conversations are happening.

Expectation:

• GCs discussed the importance of setting clear expectations for their outside counsel. This included the use of fireside chats as a means to quickly bring outside counsel up to speed and build long term relationships

• Law firm leaders acknowledged that firms often don’t stop and ask the question of what it is exactly that their clients want. However, difficulties were raised at synthesizing different touch points within an organization which possess their own requirements and agendas

Transparency:

• Both sides discussed the importance of transparency in the firm-client relationship. Fundamental to law firm leaders was the need for clients to be open on what they really care about. Difficulty was raised in distinguishing between a client’s desire or intention versus what a client is saying and not acting on

• GCs expressed the need for open dialogue between the client and the firm while pointing to the dangers of assuming firms understand their expectations but then being disappointed when they don’t meet them

Feedback:

• GCs expressed dissatisfaction with the lack of outside counsel that proactively ask to be reviewed post engagement. One GC identified the best firms as being those "that take conversation dialogue away and come back to me with the things that should be on my radar”

• Law firm leaders raised the concern that not all GCs want to take the time to engage in feedback while also pointing to large client and matter portfolios which can lead to difficulties in implementing client feedback programs in a systematic way

Partnerships:

• GCs acknowledged the need to understand the pressures of what it is like to work in private practice, but as part of a partnership, firms also need to understand the pressures of working in-house

• Law firm leaders discussed the importance of recognizing that both sides are ultimately in the same situation as well as the need to be open with clients about where a firm is behind and what steps the firm is taking to remedy this

"When clients ask us what they can do to make us better a good response would be to say to make sure that everybody on their team is going in the same direction and recognizing the value that legal departments can provide in being the liaison with the business.”

"The law firm is an extension of the in-house team, we are all in this together and this initiative should be about how we build a conversation.”