VP of GLC Consulting Mike Blanchard quoted in Law360 Article
GLC Law Firm Consulting's Mike Blanchard was quoted in a recent Law360 article: "Why More Global Giants Are Renouncing Their HQs."
Law360, Grand Rapids (November 28, 2017, 11:38 AM EST) -- Certain behaviors get under the skin of in-house counsel and can make them never want to work with a law firm again.
In a legal industry where demand is largely flat, where corporations are bringing more work in-house, and where competition from alternative legal service providers and accounting firms is eating away at law firm revenue, keeping clients happy is vital to success.
And yet, many law firm partners slip up and fall into the same old patterns — like failing to properly communicate, resisting innovation and working inefficiently — that irritate in-house counsel and make them think twice about hiring the law firm again.
“Most clients will vote with their feet,” said practice management consultant Jack Bostelman, a partner of Blaqwell Inc. “Because they’re realistic that law firms are resistant to behavior changes and because it’s not the client’s job to train the lawyer on how to serve clients. There are plenty of good lawyers, why work really hard to help a lawyer fix the problem? Why not go with someone who doesn’t have the problem?”
Here, Law360 looks at three fairly effective ways to drive away clients.
Be Stubbornly Inefficient
Many outside lawyers, who are typically paid based on how many hours they bill, will perform every task they can think of and then some, “grinding away” to produce a given outcome for their client, explained Michael Roster, steering committee co-chair for the Association of Corporate Counsel's Value Challenge and former general counsel of Stanford University.
The method of operating is similar to doctors who perform extensive tests and procedures in order to make sure they’ve covered every possible outcome, he said.
While it may sound admirable, it is a problem for clients, Roster explained, because it doesn't take into consideration the cost-benefit of each task and each hour billed.
“In-house counsel want lawyers to be our partners, always assessing cost benefit,” he said.
And then, when an in-house lawyers points out an inefficiency, or explains that a task was unneeded or could have been performed differently, Roster said some law firms respond with, “But that’s the way we’ve always done it.”
That answer stood out to Roster and to several other in-house counsel and management consultants as one of the best ways to drive away clients.
“They seem to forget: I’m overseeing several hundred matters and seeing what all kinds of law firms do,” he said. “When I bring it to their attention that this is a bad way of doing it, I’m not just making it up. I have the experience of seeing their competitors do it much better.”
The smartest firms will align their compensation systems with the aspiration of providing value to clients, rather than billing a lot of hours, according to Michael Blanchard of GLC Law Firm Consulting.
“These sorts of systems are slow to evolve in law firms,” Blanchard said. “The firms that are smart about recognizing that you have to pay for specific behaviors clients want will be the winners. And most general counsel are leaning toward the types of firms that are proactive and away from the firms that just don’t get it.”
Ignore Useful Innovation
One area in which law firms regularly “fall down on the job” is in being innovative and bringing data and metrics to the table for clients, said Stephanie Corey, co-founder of legal operations consulting firm UpLevel Ops and former legal operations leader at Flex and HP.
Corey pointed out that a Google image search for “law firm innovation” brings up as its first result a cartoon with four people sitting around a boardroom table with the caption, “Instead of risking anything new, let’s play it safe by continuing our slow decline into obsolescence.”
In-house teams, she explained, have been forced to become more efficient and progressive due to budgetary constraints, and they now expect the same from their outside counsel.
“Law firms are accustomed to practicing the bespoke model, fueled by the billable hour,” she said. “But all that is going away. We’re asking for data that requires technology, we want project managers on matters, we want you to stratify the work and be as efficient as possible.”
Law firms must move away from the traditional model of staffing matters and get creative, even scaling back in some instances.
“In-house teams feel like sometimes good enough is good enough — we don’t want perfection and we don’t want things overlawyered,” she said, pointing to JPMorgan’s decision to use artificial intelligence to review its contracts.
The bank is able to review documents in a matter of seconds that once required 360,000 hours of work by attorneys and loan officers, using new software called “COIN” — short for Contract Intelligence.
“We don’t want junior associates on the matter anymore if technology can do it better, faster and cheaper,” Corey said.
In addition to the broader issues of efficiency and innovation, clients’ pet peeves also include a few on-the-ground service delivery problems that some say are pervasive in the industry.
The biggest one, according to Dan Safran, CEO of legal industry consulting firm LegalShift, is a failure on the part of outside counsel to communicate properly upfront on the full scope of a matter and the client’s goals for it, and then to continue that effective communication throughout the matter so that the client’s desires are met each step of the way.
“In my mind, the biggest thing that pisses off inside counsel is the fact that there is a missed expectation on what the outside counsel will deliver,” Safran said.
When hiring a contractor to build a house, the first step is for that contractor to put together a document showing what they’ll do, how long it will take, and how much it will cost. Safran said he is “shocked” by the number of law firms who put together engagement letters for a client when they are first hired, but not for subsequent individual matters.
Failing to put together a detailed engagement letter for each matter with granular information about expectations creates more time on the back end of the work arguing about what should or should not have been done, and the feeling on the part of the client that they’ve paid a pretty penny and haven’t gotten what they needed, Safran said.
Additionally, poor communication when it comes to change management is another area where clients are often unhappy with their outside counsel, he said. When something changes in the middle of a project, the law firm should immediately contact the client to discuss the changes and get their sign-off for any additional work that needs to be done.
“Lawyers are notoriously bad about identifying when something has changed and notifying clients when something has changed,” Safran said.
--Editing by Rebecca Flanagan and Emily Kokoll.