What GC Thought Leaders Experiment Is About (Hint: Not Cost)

By Firoz Dattu and Dan Currell, AdvanceLaw

This article originally appeared in The American Lawyer. Reprinted with permission.

The publication of An Open Letter From 25 General Counsel on July 11th has led to an outpouring of responses and reactions from different corners of the legal profession. We’re excited to see it—one of the aims of the Thought Leaders Experiment was always to create debate and dialogue.

A fair bit of the discussion has been about the goals of the experiment—what’s it really for? This has become a bit of a Rorschach test for the whole legal profession: we’re all looking at the same inkblot, but we’re seeing (sometimes entirely) different things. Some of the discussion presumes the experiment is a billing review or cost analysis. It’s not, so we thought it would be helpful for us to clarify what it is.

The roots of the Thought Leaders Experiment lie in what the industry has not yet done with data: use it to test which client and law firm behaviors measurably improve satisfaction and lead to the best relationships. We are doing this by looking at data relating to thousands of matters to see how client and firm practices (such as the existence of a law firm panel) impact client assessments of quality, responsiveness, expertise, trust, and innovation. (You can see more detail on the project here.)

By contrast, most data in the legal industry is used for benchmarking, which can tell us the cost of the average deposition, but won’t tell us what causes a representation to go well overall. That’s why this project is not a benchmarking exercise. We aren’t comparing rates, nor ranking firms and lawyers—we’re looking at which practices work best. In fact, one goal of this effort is to get the legal profession off the topic of cost, and focused more on quality, value, long-term relationships, and successful legal representations. We have no plans to use billing records in this project.

Instead, we are building on an aspect of our work that has always been the most useful. For eight years, we’ve been collecting in-house clients’ informed, professional assessments of law firm performance. Beyond using this to help with counsel selection, we’re regularly asked to present this “voice of the client” data and feedback at law firm retreats and in-house meetings—it can offer a very practical view of what works and what doesn’t.

Last year, several forward-thinking GCs encouraged us to do more with this. Could we collect even more detailed client satisfaction data on a wider range of matters, and reach conclusions about what drives law firm and client success at an industry-wide level? Early this year we began collecting that data, and the collection is now deep and rich enough for us to reach some preliminary conclusions on key questions for the profession.

Here are three of the questions we are excited about—and these are just the beginning:

First, law firm honeymoons. Some clients note that firms perform best in their earliest work for a client. Is this true? How do law firm-client relationships evolve in the long run, and most importantly, why do they follow this path? Related, what can be done to encourage strong performance throughout?

Second, convergence exercises. Large clients have been consolidating their spending onto smaller and smaller preferred provider panels, with significant implications for the legal industry. How do convergence practices impact legal work quality and client satisfaction? And what can clients and law firms do to make these relationships especially rewarding for all involved?

Third, flat fees. A natural question about flat fees or other alternatives to the billable hour is whether they are cheaper. You now know that we think this is a half-question (and not the interesting half). The whole question is: do alternative fees work better, all things considered?

We will develop further questions as the experiment matures with guidance from law firm managing partners, the in-house and law firm lawyers we work with and speak to every day, and of course the sponsoring general counsel. Recently we’ve had conversations within the experiment’s steering committee about convening roundtable discussions with progressive, open-minded managing partners at U.S. and global firms to pressure test findings and incorporate their views and guidance.

That kind of guidance from leaders in the industry will help the project to answer questions that matter to all of us. As Jonathan Pearl, the GC of Sony Electronics, said at the outset of this work, “There are many different management approaches—but how do we know if they’re real or a fad? We want to know what works and why.” That’s what the Thought Leaders Experiment is about, and we’re excited about the steps to come.

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