Recap: Working With My Law Firm(s): The New Dynamics

This was probably the most animated session during the two-day event - maybe it was the cocktail reception and songwriter's night that was to follow.

More likely, it was the issue at hand. The in-house attorneys in the room were all under at least a minimal amount of pressure to contain costs, and everyone had clearly examined their outside counsel relationships recently. The panelists had each taken different steps to modify their relationships with outside counsel, and each seemed to be pleased with the direction these relationships were heading.

Working With My Law Firm: The New Dynamics
Panelists: Senior attorneys from International Paper, SunTrust Banks, CVS Caremark
Moderator: Candice Reed (Executive Director, Counsel On Call)

Summary of Dialogue
Themes: Make your voice heard with outside counsel; We hold the power; We often know more about e-discovery than law firms do; Law firms need to budget/plan and work with the vendors we choose

Panelists began the session detailing how they, and many in the legal profession, believe that the law firm model is broken. The dialogue with the audience began immediately once this subject was broached, and many shared anecdotes about their relationships with outside counsel.

With that framework, one panelist said it’s important for a law firm – even firms you’ve been working with for years – to know you will walk away if their pricing or services are not inline with your needs. His department has moved to bidding out all of its work, and every law firm knows that there are at least two or three other firms bidding – and this has changed the way law firms look at the company (in a positive way). It has not changed the quality level of the work they receive (also positive).

Another panelist took this further and stated that involving her law firm in the decision-making process on the company’s e-discovery was not the best decision. The firm’s e-discovery committee was not up to the task, they did not have a disciplined approach and said that no matter who reviewed the company’s documents (namely: discovery attorneys), they were going to re-review them in order to sign off on the agreement.

Panelists them reiterated that in-house counsel must be willing to say, “Give me what I want” and stand up to law firms when necessary.

One specific anecdote that was shared with the group involved a recent conversation with a law firm partner, who was leading a company’s litigation strategy. The attendee loved the value he was getting from that partner, even at $500 per hour. But what he did not like – and what he wanted the partner to understand – was that along with every hour in that partner’s time came another $600 per hour in two junior associates a paralegal.

Another panelist said that we are in an evolutionary period right now, and that law firms must get their value proposition in order. He calculated that his company pays its in-house attorneys $150 per hour; if a law firm associate is doing work for his company, it needs to be at that price or less or it’s not worth it – they will do it in-house or use another vendor. Another panelist said a good practice is to staff a department at 80% of volume at $150 per hour.

From the audience, an attendee stated that she feels like she is educating law firms on every new case; they don’t know what a review protocol is, they don’t know how to track efficiency, and they are “very unsophisticated” when it comes to discovery. The group agreed, with one attendee stating that the way law firms manage a case and approach the discovery process is “with Concordance and brute force.”

The conversation then turned to law firm discovery centers. Several examples were provided, with one attendee citing one in which she “never saw the documents, but hasn’t heard anything bad” and a second matter in which she reviewed the documents and “it was horrible.” Another attendee said she had a good experience with one such center, but it was at three to four times the price she can do it for with Counsel On Call. One panelist remarked that the mark-up on these centers is ridiculous and sometimes uses the exact same attorneys as a company like Counsel On Call, which charges a very minimal mark-up.

One panelist said his department has the following requirements of law firms:

  1. No more than one lawyer at a deposition, hearing or event … he gets lots of pushback on this from the firms. (“Who will handle my papers?” I will, he says.)
  2. No first-year associates

Another panelist likes to budget matters over 90-day periods, and by asking law firms to do the same, the in-house department is able to determine what work can be done in-house that the law firm is budgeting. Another panelist stated that this approach – asking the law firm to plan – is a very positive step. The panelist also stated that staffing on any matter has to be approved and that the firm has to work with any third-party vendor the in-house department chooses (discovery attorneys or otherwise).

How E-Discovery Has Helped Legitimize Contract Work

Nine years ago when we started Counsel On Call – we celebrated our anniversary on April 3 -- we had to work our tails off just to get a courtesy meeting with a client. We spent a lot of time in those meetings addressing uninformed stereotypes about contract lawyers who ‘couldn’t get a job in a real firm’ or were ‘too lazy to do the work.’ After talking in detail about the quality of our attorneys and how they simply didn’t want the big firm life, or had another interest they wanted to pursue in addition to practicing law, or wanted to spend more time with family, we started to get beyond those initial hurdles. Realistically, most everyone we met with knew an attorney that fit our model.

I’m glad to say that many of these prejudices have dissipated over the last decade, and I’m especially pleased to see that so many talented attorneys now choose to practice law in a non-traditional way. It’s more rewarding that clients recognize this as well. Most of our clients refer to our attorneys as Counsel On Call attorneys, or employment attorney, bankruptcy attorney, corporate attorney or discovery attorney … there is certainly more awareness that not every great lawyer works in a “permanent position” within a firm or in-house. It’s helped us get to the pressing matters at hand – ways we can provide our clients with effective business solutions that incorporate low-priced, experienced and highly qualified attorneys.

So what was the tipping point? This is difficult to say. First, the attorneys who have worked with Counsel On Call the last nine years have helped change the perception of our clients. Second, once clients started working with our attorneys, they realized how easy it really was, and how much value each attorney offered. Third, our clients were willing to share their experiences with others – most of our business has grown through referrals.

Client needs have come in many forms and each has contributed to the build-up to this tipping point. Like the client who had to dispose of real estate assets within six months and needed an attorney who could motivate business people as well as draft all the documents; or the client that needed an economical way to draft and review vendor agreements; or, more recently, the client that wanted to get its arms around discovery costs so that it was in a position to budget future cases and have a repeatable process. Whatever the matter, we have worked to create a tailored solution, each of which included talented attorneys. Without our attorneys walking in the door and delivering quality work product at a significant cost savings, we simply would not be in a position to say that so many attorneys choose to practice law in a non-traditional way.

Specifically in regard to e-discovery … we saw a real need, a way to bring all the parties together so that there was clear communication and everyone was truly working in the client’s best interest. We had the resources to offer great project management and excellent litigation attorneys dedicated to discovery; and we quickly found that the efficiencies and productivity we generated versus traditional methods were substantial. Building on that success, we’re committed to creating the best processes, hiring the right attorneys, putting them together in collaborative teams, staying abreast of the latest technologies, and listening to our clients’ wishes -- and ultimately saving them a lot of money. It’s quickly become a win-win situation.

It clearly took clients working with our attorneys on employment, contracts or IP matters to begin the conversation about their discovery challenges. But as our discovery approach has been tried and tested in recent years, the result is that in-house departments now work only with companies like ours on e-discovery – or ask outside counsel to work with us -- and in the process have uncovered additional ways our attorneys and our approach can help their respective companies. So it’s been a circular route to get us to where we are today, a place where more opportunities are available for our attorneys.

Interestingly enough, recently several law firms have publicly stated that they plan to use more contract attorneys (as, unfortunately, they simultaneously announce associate layoffs). Quite candidly, Counsel On Call was originally focused on helping law firms; having practiced in a law firm I understand the economics of hiring associates. This shift is good news for in-house departments who will have more flexibility in cost containment with outside counsel – our law firm clients have been ahead of the curve in this regard in recent years, and have reaped benefits from it. And although there have been many factors at play to get to this point, there is unquestionably a direct link to e-discovery and how value became a central theme as the segment matured. Law firms have realized that their business model needs attention and, to their credit, many former naysayers are now looking for ways to fix it with their clients’ best interests in mind.

I still believe a blended model will ultimately prevail in our profession. I still believe that in-house counsel – lawyers who are forced to make budgetary decisions that revolve around quality legal representation -- will drive change (and currently are). And I still strongly believe that when outside counsel, in-house counsel and Counsel On Call work collaboratively, everyone wins: the lawyers looking for a different way to practice, the law firm partner who can get back to a true ‘partner’ role, and the client who gets the benefit of reduced costs and maximized resources.