By David Ruiz
This article originally appeared in Corporate Counsel. Reprinted with permission.
General counsel and their law firms have, for years, been working under a set of assumptions: flat fees are better, consolidating outside counsel is efficient and regular performance reviews improve outcomes.
But what if those assumptions were backed by data and quantified?
That’s exactly what AdvanceLaw—a consultancy that helps GCs connect with vetted outside law firms—is trying to do through the GC Thought Leaders Experiment, a project with a global scope. AdvanceLaw, which is staffed by a group of lawyers, economists and legal consultants, has embarked on a massive data experiment with almost 30 participating general counsel to find what management methods and what behaviors on both sides of the table produce the best results for clients and outside counsel.
“The most important thing, the whole of the project is this: What are the things that in-house lawyers and law firms are doing that are most likely to create positive outcomes and strong client-law firm relationships? Period,” said Firoz Dattu, founder and chief executive of AdvanceLaw.
To answer that question, AdvanceLaw is looking at data. For the past several months, participating GCs have sent batches of data from open and closed legal matters to AdvanceLaw. That information includes firm names, billing rates, billing arrangements, matter types, practice areas, relationship length with outside firms, if a firm is a preferred provider and frequent performance reviews from in-house counsel. With those reviews, AdvanceLaw can pair certain law firm “behaviors” with outcomes, Dattu said.
And with enough data, AdvanceLaw’s database could connect disparate data points and deliver some preliminary findings. The data could show how some billing arrangements might be better suited for one type of legal matter over another. It could show whether newly engaged outside counsel have a so-called “honeymoon” phase, after which performance starts to slow. It could even show if, when firms are signed up for a flat fee arrangement for a matter, that impacts a lawyer’s responsiveness.
But the findings aren’t the end goal, Dattu said. Instead, AdvanceLaw is focusing on creating a dialogue between general counsel and law firms. Hence, the open letter published today, signed by 25 general counsel and deputy general counsel participating in the project (though 25 signed, more are involved, Dattu said).
Starting next month, Dattu explained, one participating GC will publish a write-up of preliminary findings from the growing data. The GCs will offer insight into their own experience with what the data shows. Dattu hopes this creates an opportunity for others in the legal industry to discuss their thoughts.
“If you’re going to change the legal industry, I don’t think it comes out of a report,” Dattu said. “The critical ingredient is that people are debating and discussing what works.”
The whole project began rather “organically,” according to Dattu. Through continued conversations with the GCs in the AdvanceLaw network, some in-house counsel started asking about ways to measure the performance of all their outside firms, not just the firms that AdvanceLaw professionally vets.
Dattu said he started taking that idea to “thought leader” GCs, the kind of in-house legal leaders who he said want to improve the overall legal industry and profession.
Those lawyers work at companies including Mastercard, Panasonic North America, Flex, PayPal, Petco, Keurig Green Mountain Inc., Sony Electronics, Rockwell Automation Inc., Avaya Inc. and more—and are all participating in the project. In fact, Dattu credits much of the project to those thought-leader GCs.
“The spark in the general counsel is the thing that ignited the project,” Dattu said. “It’s because of their passion that we’re doing it.”