I was recently reminded that in 2007, when ACC was still creating a vision of what we’d try to do with the ACC Value Challenge, the emerging Steering Committee leaders all agreed that if we could simply make the word “value” a dominant concept, regardless of whether folks associated their value conversation with the ACC Value Challenge, we’d have succeeded in some part. I’m happy to report that by that standard, we’re doing well.
Perhaps too well.
Value has become a word that is so popular in the legal service conversation today that it is ubiquitous with quality, efficiency, productivity, innovation, and results. And lots of talk. By any standard, we’ve succeeded in moving folks to talk the value talk. But for many, that’s still all they’re prepared to do. Talk.
So I’ve made it my mission in 2010 to roll out the next steps: how to help folks walk the value walk. Everybody embraces value theory and enjoys reading or hearing about value success practices implemented by others; and for many, it’s easy to discount the applicability of some of the most touted success stories by saying: “that’s fine for DuPont and Pfizer and Cisco and others: but not for my lower leverage, bread-and-butter, work-a-day legal stuff.”
Don’t cop-out on value. What that says to me is that folks are afraid to admit that they don’t have experience or comfort or skill in actually implementing “value-based” changes in our own practices. We need to re-build our toolkit and develop the confidence that we can get value done, regardless of department size or legal matter or subject expertise. We need to figure out what value means to us (not to Pfizer and DuPont), and how we get there from here, since it’s Summertime and the talkin’ is easy but the livin’ ain’t free.
So ACC is pleased to raise the curtain tonight onLegal Services Management 3.0 – the Core Curriculum. This pilot initiative has been in the works for months, and is being delivered for the first time in Washington, DC on July 13-14 to about 50 top-level in-house legal managers; if you’re not one of the lucky few who got a seat for the pilot program, no worries – you’re going to see it repeated and re-tooled or customized in the coming months into a series of executive/business education offerings for managing lawyers in departments and firms across the spectrum.
In ACC’s LSM 3.0 we’re not telling participants what others did so they can nod their heads and murmur appreciation; we’re teaching registrants how to apply these concepts in their law departments, large and small, in every industry and in every kind of legal work done. Our registrants want to learn HOW to save money, drive efficiencies, create better and stronger relationships with firms and vendors supporting their work, and improve results for their clients.
What are we offering/what are registrants becoming expert in?
-Fee and staffing structures that drive value;
-Metrics and evaluation strategies to assure that improvement is quantifiable and sustainable;
-Knowledge management concepts that avoid “re-inventing the wheel”;
-Process management, including concepts such as lean six sigma in legal services;
-Mining technology and data to drive better results;
-Project management to assure that complex matters deploying diverse teams succeed; and
-Change strategies and incentives, since the hardest part of all is getting lawyers to try something new.
This two day session, taught by an all-star faculty including in-house counsel, outside firm leaders, and consultants/vendors offers a rare opportunity to sample the broad set of skills that lawyers are going to need to develop to succeed in the next decade and beyond. We hope you’ll watch our homepage for snippets of the video from the sessions (we’re taping them) and information on the resources and upcoming classes that might benefit you and your client that will be available to you online.
Time to stop talking about value and just get it done. Time to become value-able.
Picking the metrics that matter
Week 4. Each week via the In-House ACCess blog, follow the promise and pitfalls of forming a new value-based client-firm relationship. ACC Value Challenge steering committee member Ken Grady, General Counsel and Secretary of Wolverine World Wide, offered to profile his selection and start-up process of launching a trademark portfolio management engagement with law firm Seyfarth Shaw. Ken's co-blogger is Lisa Damon, a member of Seyfarth's Executive Committee and leader of the firm's efforts to incorporate Lean Six Sigma into its business. To catch up on the story so far, click here.
The client side
Now to metrics. To get Lean, you need measurements. When I did Lean in the manufacturing world (I ran a large plant), we measured productivity (revenue per hour worked), quality, safety, and orders complete and on time. Easy on the shop floor, but how do you measure legal work?
Many lawyers argue that legal work is bespoke – each matter is custom designed to fit the facts and circumstances of the occasion. That, my friends, just ain’t so. (Richard Susskind does a nice job of explaining this in great detail in his book, "The End of Lawyers"). These posts are about our trademark story, so I’ll stick with trademarks but the same analysis could be used for any legal project (and by the way, Lean works on the one, multi-year litigation matter, just as well as it works on the 1,000 slip-and-fall cases).
I divide legal work into two categories – industrial services and artisanal services. Industrial services are commodity services, such as trademark applications. We do lots of them and they typically involve the same steps each time. We want to do these as efficiently as possible to keep the costs and the time to issuance low and brief. Artisanal services are custom (to a degree), such as an opposition matter before the Trademark Trial and Appeal Board. While artisanal services have more custom steps, there still is a lot of room to make them efficient (just because a tailor makes a suit that fits only you, it doesn’t mean he has to do so inefficiently).
We need metrics to measure both the industrial and artisanal trademark services. We need to measure today, and then to measure in the future, to determine how much we improve. Ideally, we want quantitative metrics. We need to measure them periodically (in the plant, we measured daily but for this project, monthly, quarterly and annually should work). We also want at least some metrics that tie back to our business objectives. Efficiency is great, but having a very efficient trademark portfolio that doesn’t do much for the business makes no sense.
The Seyfarth team pulled together some draft metrics. I’ll let them tell you about the ones they proposed. I put together some alternatives. Remember, there are no perfect metrics. They all have flaws and we can manipulate them. The goal is to pull together metrics that will help take inefficiencies out of your processes and measure whether you are increasing the value of your processes.
Here are just a few of metrics that I proposed (in no particular order):
- Trademark Risk Rate (total dollars spent defending trademarks, divided by total number of trademarks defended)
- Counterfeit Recovery Rate (total dollars spent on anti-counterfeiting actions, divided by total number of units seized)
- Specimen Response Productivity (days from first request for specimen to receipt of acceptable specimen, divided by number of trademarks for which specimens requested).
Tell us what you think.
Next: The mother metric and starting the leap: metrics to fees.
The firm view
As we have been on our Lean journey, we have come to understand and even embrace metrics. Measuring performance and rewarding internal teams can allow you, as the in-house client -- to bring laser-like focus on what you value in your business. There is much truth to the Tom Peters maxim, "What gets measured gets done." Historically, in firms, internal metrics focus on hours and realization, and when we work with clients, it is often (and sadly) just cost.
When you start to expand your definition of metrics, however, amazing things happen.
To see the power of this, pick something you value. In a litigation, it may be something as simple as comprehensive early case assessment being performed in all matters within 45 days of filing. It might be resolving a matter under a certain number by a certain date, or it may be winning a trial while staying on budget and keeping your business folks engaged and satisfied. (See what fun this is? You can have it all).
Once you start with what you value (and it can be several things), then step back and design the metrics. Our friend, Jeff Carr, has worked his terrific FMC ACES model so that he can do this in a systematic way across the spectrum of legal services, but you can employ simple value-to-metrics steps on any matter.
As I mentioned in last week's post, we often start with cost and satisfaction/quality (we love the components of the ACC’s Value Index), but then we try to work with more specific measures, tailored to the individual client. Ken led us into this discussion beautifully -- but then pushed us even further. As you can see from Ken's post, we are right in the middle of this discussion now.
We initially proposed three buckets of metrics: transition-related (we were taking over a very large trademark portfolio), ongoing metrics and qualitative measures. Here are a few of the overall categories of metrics we proposed:
- "Success" rate, measured by things like first action allowance, watch hit outcome
- Overall satisfaction
- Timeliness of communication
- Effectiveness of "lessons learned" sessions
- Strategic participation/understanding of Wolverine business
- Proactive issue identification
- Budget variance
- Cost management effectiveness
When we got Ken's metrics back, they pushed into far more creative thinking. Internally, we are now thinking through how we approach fees that are tied to a client's business performance - we know it makes sense from a "value" perspective but how to get there is key. it is certainly not the norm for the law firm world.
Please let us know how you have used metrics. What works for you? What has not worked? Thoughts on different metrics that the Wolverine/Seyfarth team should use?
Next post: Responding to Ken’s ‘mother metric’
Determining the metrics of ‘value’
Week 3. Each week via the In-House ACCess blog, follow the promise and pitfalls of forming a new value-based client-firm relationship. ACC Value Challenge steering committee member Ken Grady, General Counsel and Secretary of Wolverine World Wide, offered to profile his selection and start-up process of launching a trademark portfolio management engagement with law firm Seyfarth Shaw. Ken's co-blogger is Lisa Damon, a member of Seyfarth's Executive Committee and leader of the firm's efforts to incorporate Lean Six Sigma into its business. To catch up on the story so far, click here.
The client side
We built a relationship and chose the law firm, and we haven't talked about fees. To discuss fees, we also should discuss metrics. This will probably take a few posts, so bear with us. I'm going to start by stepping back and getting philosophical. When I talk about value fee relationships, part of what I'm talking about is a way for the company to lower its costs, and the other part is for the firm (and the company) to become more efficient. I want the firms to be profitable, and I think they can be just as profitable working efficiently as working inefficiently. The following example might help:
Suppose a firm will bill for 12 hours at $300 per hour, for a total of $3,600. Let's assume the firm could do the same quality work, but do it in 6 hours rather than 12 hours. If the firm charged $2,400 for 6 hours, I would have saved $1,200. The firm would have been paid $2,400 for 6 hours, versus $1,800 for 6 hours under the old arrangement. The firm also “saved” 6 hours and can use those hours as it wants: work for another client and be paid another $2,400 for 6 hours (a total of $4,800 for 12 hours versus the previous $3,600 for 12 hours), or maybe work the associates less and only use 3 hours (putting it at $3,600 for 9 hours versus the prior $3,600 for 12 hours).
This all makes sense except for one thing: How does the firm do the same quality job in 6 hours instead of 12 hours? The answer is to tackle the efficiency issue. In my opinion, law firms are extremely inefficient (okay, airlines are much more inefficient, but that is a separate story). Throwing that statement out usually creates some heated discussion. Many partners tell me about how they work very efficiently. But, I don't see that lawyers (private practice or in-house) have anything to brag about.
So how do lawyers become efficient? There are many ways to improve, but the one I find the most sensible and I think works well with the legal world is "Lean" or its hybrid cousin, "Lean Six Sigma." In simple form, Lean is about removing everything that doesn't add value, leaving only value added steps. It sounds simple, but Toyota (which has been doing this for almost 70 years) would tell you they are still in the early stages of learning about Lean. So, how does Lean work in a law firm? I'm going to let Lisa tell you the story. Lean is important to metrics in our story, because that is how we have chosen to find ways to make ourselves more efficient internally and externally, yet make sure this isn’t something where we benefit at Seyfarth’s expense – we want Seyfarth to benefit from helping us become efficient. Put another way, efficiency has value to us, and we are willing to pay for that value.
Next: The metrics story continued.
The firm view
So how DOES Lean work in a law firm? In many ways, the cards are stacked against it. Lean requires the discipline to step back, look at data, talk to clients, examine root cause and then design a way to work more efficiently -- cutting out steps that don't add value, adding steps that do and re-aligning what remains to deliver superb service that meets the client's definition of value. Read: Do a better job in less time.
Law firm economics, however, taken to their logical end, incentivize inefficiency. Historically, law firm reward systems relate to more time -- more minutes, more hours, more billings, more money. So, the first paradigm shift you need to make is: Believe that doing a better job in less time makes the clients more delighted (Kano Model for those of you doing Lean-speak), and that more delighted clients means more great work. Lucky for us -- the formula actually works. And any firm can do it -- it just takes investment, discipline and some knowledge.
Second paradigm shift is Lean itself. Cue the eye rolling. We have heard it all -- that’s for cars, not lawyers; process discipline has no place in the art of law; only good for commodity work; too hard; too complex; too simple; too much jargon; just marketing; and, the current favorite, "Look where it got Toyota." There have been times along our journey-in-progress when we have thought each of those things. But, what we are doing is working, and we believe there is a lot that can be relatively easily implemented by all -- large and small firms and legal departments.
Take any project. Let's take a complex litigation. We have invested our lawyer and staff time to study the way we approach different types of litigation -- so we have process maps, technology tools, resource banks, and data we have collected and analyzed from our own work. Doable for any Firm whose partners have a core concept of investment time. So now, a client comes and asks for us to work with them on a piece of complex litigation.
If we were approaching this with a Lean frame, we would spend much more time up front with the client, understanding what they wanted, customizing our process maps (for both the client and the matter), putting a plan into place to execute according to the client's definition of value. We then set metrics to ensure we were satisfying their needs and driving the result.
For instance, we might measure a variety of things . . . Some clients value "cycle time" -- how quickly we can move the case through mediation or to trial; some value results -- a trial win under a certain price or within a certain time frame; others may value a thorough early case assessment or budget predictability. The "voice of the client" provides us with the information we need to decide what Lean tools we will use and how we will measure our performance.
In educating lawyers about Lean, we find it is sometimes better to talk about what it is not -- it is not rigid and inflexible; not about commodity work; not about statistics; and, not confined to an area of practice. For us, the simplest way to approach Lean is to remember that Lean is a way to think, a way to break out of the way we have done things and to look at a problem -- very complex to very routine - differently - and then work to deliver the highest quality, directly in synch with the client's value, at a lower cost.
Being a lean bunch, metrics are a big deal for us -- we love to measure things and look at data (amazing what it often tells you). So we often start by sticking to a few basic measures --lowering cost and increasing satisfaction. When we started talking metrics with Wolverine, we knew they were also a metrics-loving group, but we had no idea what was next. We started by proposing a set of metrics that related to client satisfaction, cost and cycle time.
Next: Ken comes back with a set of metrics far more finely tuned to what he valued. Just wait…math is required.
Week 2. Each week via the In-House ACCess blog, follow the promise and pitfalls of forming a new value-based client-firm relationship. ACC Value Challenge steering committee member Ken Grady, General Counsel and Secretary of Wolverine World Wide, offered to profile his selection and start-up process of launching a trademark portfolio management engagement with law firm Seyfarth Shaw. Ken's co-blogger is Lisa Damon, a member of Seyfarth's Executive Committee and leader of the firm's efforts to incorporate Lean Six Sigma into its business. To catch up on the story so far, click here.
The client side:
How do you chose a law firm without talking about fees (and, was I out of my mind)? It really isn't that different from what in-house lawyers did from the 1970s until recently. We talked to our friends, asked for some client references, talked to attorneys at the firm, listened to their speeches, read their articles, and so on. But, when we talked about fees, it was often an awkward conversation about billing rates:
"So, how much do you charge an hour?"
"Well, I'm at one gazillion now."
"Ow, that seems higher than where some other firms are at."
"Of course, for a matter like this, I think I can convince my managing partner to let me go to our discount schedule where I'm at a bazillion."
"Oh great, that seems more like the market - and the same discount for others on the team?"
We knew the rate, but not how many hours. I didn't look at that as knowing the fee, at least not like I know the fee of the guy who paints my house: "That will be $2,561, Mr. Grady, and that includes whatever wall prep and patching we need to do to give you a great job." (Remember, I'm in-house counsel so we have small houses.) Now, I know many of you have a more sophisticated approach, but there are still plenty of in-house lawyers for whom the script above will seem all-too-familiar.
Instead, I employed a "new-old" strategy. I went back to the days where you spent time getting to know your lawyer, made the choice, and then worked out the fees, based on the value you were getting. You chose the lawyer (referral from friends at the club), he did the work, he sent you a bill, and then (for those of you with chutzpah) you discussed adjustments, based on how you perceived the value of the services (for those without, you just paid the bill). Our difference was to meet and talk to the lawyer, chose the lawyer, discuss the mutual value structure, and then re-evaluate as we go along.
So, we met with the lawyers, and met again. We talked by phone, and talked again. We emailed, and emailed again. Overall, we spent about six months in discussions. "We" included all members of my team talking to members of Seyfarth's team, including paralegals talking with paralegals without an attorney. Trademarks are a major part of our practice, so really getting to know the Seyfarth team was important.
To us, it was important Seyfarth understood our company, its culture and what value legal services had in that culture, and for us to understand how the SeyfarthLean culture would mesh with us. We shared how much we spent on our trademark work and we gave themportfolio information, so Seyfarth could gauge the value of this engagement to the firm.
To me, I would be out of my mind if I didn't build a relationship first, and then look at ways both parties could profit from the relationship.
Next post: Let's talk metrics.
The firm view:
Ken relayed a typical conversation in house to outside and it resonates in many ways…although 10% off a bazillion is often discussed. Just kidding. Sort of.
On a serious note, we as outside counsel experience a good deal of frustration right now in dealing with the fee discussion. While many clients may express they want to move toward new "value" or an alternative fee structure, in actuality, there has not been much change. Now, the conversation often goes like this:
"Can you do an alternative fee?”
"Of course." [Then we lay out the options - flat, fixed, risk-reward, pure value, portfolio, phased, periodic...]
"Thanks. Interesting. But, you know, those fee arrangements are all well and good, but they [fill in the blank: 'don't fit in our chart'; 'don't let us compare the firms'; 'aren't what we are ready to do yet'; 'are not acceptable to procurement'; 'are scary']. Can you just give us your lowest possible billable rate?"
Ken's approach was so different because there was no fee discussion – really, none at all. The initial focus was on the relationship, the core values and the business fit. Often, in the press to find new business, many of us in outside firms can easily forget that relationship fit is key for us, too. Our best stories have to do with clients that we know, like, trust, understand and vice versa. The cornerstone of trust makes all the rest work out. In these times of a much more business-oriented relationship, that concept may seem old-fashioned, hearkening back to the days of Lincoln and candlelight. In reality, it remains just as true now as it did then. That's why, in retrospect, Ken's approach worked so well.
In his post, Ken talked about the relationship building we went through and the pace we moved. Let me give you context from our side: It was excruciating.
Our team wanted this work so much. We loved the brands, we loved the people, we even looked like the people in their ad campaigns (okay, not the Harley brand). We already wore the shoes (okay, not the Harley brand…yet). Why didn’t they just pick us? Ken told us right up front that he was going to go slowly -- very slowly. He told us that the trust and relationship had to be right, that we needed to be patient. It was hard.
After our first web meeting, we met in person in Michigan. We brought our team, they brought theirs. It was a phenomenal two days. We really liked the people, but what we came away with was an appreciation for the collective passion of the Wolverine groups and what they were doing. We will always remember Ken and his team taking several hours and walking us through the shoes -- every brand, its distinguishing features, its history, and then showing us the signature shoes. We were on our feet, handling the shoes, looking at showrooms and feeling their passion for their company. When it was our turn, we were on our feet, showing our SeyfarthLean and walking through all of the exciting things we were doing. Hopefully, they too felt our passion.
What followed were several months of more meetings and extensive reference checks where Ken spoke to our clients, questioned us on SeyfarthLean, pushed back on the program and challenged our ability to do what he needed. In the end, it worked, and here we are.
Now, Lean Six Sigma. I promised you three painless sentences to set the stage. For the blogs to come, it is important to the story, so here goes:
· For us at Seyfarth, Lean Six Sigma is a structured data-centered discipline, driven by client requirements, and designed to eliminate non-value-added steps, reduce inefficiencies and improve key components of processes.
· In a nutshell, it is delivering the highest value services, to ever-more delighted clients at an efficient price, so what’s not to like?
· At Seyfarth, we follow DMAIC (for the Lean-friendly crowd), but have adapted the discipline for the legal environment – one that is wildly variable by nature and, at a distance, seems to resist any process methodology.
More as we go.
Next post: Ken proposes metrics, and we wonder what we have gotten ourselves into.
The Challenge: Building a new (or even improving upon an existing) client-firm relationship is never easy, especially in the fast-paced, high pressure world of sophisticated corporate legal practice. Add to that the weight felt by so many firms and departments to evolve to a higher form of practice and cost management, and companies’ increasing attention on measuring results associated with the legal spend, and you’ve got a lot of people involved who are grappling with all kinds of problems -- from establishing metrics, to choosing appropriate staffing and outsourcers, to change management problems with your staff, to managing up and doing more with less.
Setting the Stage: So what should you do? And more importantly, how do you do it? Do the risks of changing outweigh the potential rewards? ACC and our Value Challenge steering committee believe that maybe the ability to literally “see” how it’s done will help you reassess whether or not value-based change really is too risky. So we’re offering a real-time case study for everyone out there struggling to find a path that works; kind of like “legal reality TV.”
A Forum to Learn, Benchmark & Comment: Below is the inaugural post of an in-motion case study that allows you to judge the promise and pitfalls of forming a new value-based client-firm relationship . . . one that isn’t built along traditional lines. And the best part is this project will be done in the bright light of day via our In-House ACCess blog, rather than behind the curtain. While it’s the parties in this relationship who have skin in the game to get it right, we’ll be looking for you to comment as well as observe, by sharing your questions, reactions, sidebars, relevant experiences and more. But no, you won’t be able to vote them off the Island and there is no elimination round: this is TRUE reality relationship building. The gripping tension here is that the stakes are real and the parties don’t just get to walk away with a consolation prize if it doesn’t work; they have to make it work. What we’ll watch unfold is what we all have to do: figure out how to drive the right results for the right price with the right staffing and succeed based on whatever expectations are established at the outset.
The Show Will Go On: This project will be openly chronicled on this blog over the coming weeks and months, so stay tuned and join the community by engaging in this first and in future posts.
The Leads: Our “players” are not Thespians, but real folks who are actually crafting this relationship and trying out their ideas for new value-based models of working together. ACC owes its thanks to the open and visionary nature of ACC Value Challenge steering committee member Ken Grady, who offered to profile his selection and start-up process of working as General Counsel and Secretary at Wolverine World Wide with law firm Seyfarth Shaw. We owe our gratitude to Seyfarth, as well: not many firms would be “out there” – exposed in the transparent fashion. We’ll all be watching as both Ken and Seyfarth figure out how to make it work. The project they’ve selected is a new approach to managing a large trademark portfolio. Each week or so, you’ll see twin posts from both Ken and Seyfarth, chronicling the progress and challenges of their evolving relationship. And we’ll be linking in lots of relevant content and other experiences from the ACC Value Challenge and our resource pages at www.acc.com/valuechallenge.
Lifting the Curtain: The goal of this effort, as one of the bloggers notes below, is to ‘lift the curtain’ in order to help you assess how you can earn from this example and apply value-based practical solutions.
Join in: Please be sure to join in the conversation with your comments and observations, and enjoy.
Susan Hackett, Senior VP and General Counsel, Association of Corporate Counsel and the ACC Value Challenge (firstname.lastname@example.org)
The Client’s Situation
Blogger Ken Grady is general counsel at Wolverine World Wide, Inc.
Over 3,600 trademarks, 800 domain names, 180 countries and territories, and 10 major footwear and apparel brands, Wolverine World Wide, Inc. is the company you may not know with the brands (we hope) you love: Hush Puppies, Merrell, Sebago, Wolverine, Cushe, Chaco, and so on. Midwest born and bred for 127 years, today we have a global, publicly held, $1.2 billion, very complex business model. Handling the legal side is our small Legal Department: four attorneys (including me, Ken Grady, the General Counsel and Secretary) and four paralegals.
Eighteen months ago, we (the Legal Department) set a goal of moving our trademark portfolio from a traditional service and management structure to something better. About 30% of our annual outside counsel spend goes toward trademarks. To make life interesting, we threw on the constraints: no dedicated in-house trademark attorney or paralegal, an efficient operation that keeps our costs low as our portfolio grows, a strong culture fit between the company and our outside firm, and a dynamic and constantly improving portfolio services and management model.
A key question was the law firm. Moving from our existing outside counsel would put a heavy burden on our team and introduce some risks. Staying with the current firm eased the burden, but also had risks and potential downsides. We decided to start by satisfying the Greek aphorism "know thyself." Twelve months later, we were talking to law firms.
Actually, it wasn’t quite that straightforward. We started by drafting an RFP. The more we gathered information about ourselves and potential law firm partners for the RFP, the more we realized that our keys to success were really understanding what we wanted and being very open when talking to potential firms. We decided the RFP process was a good way to learn about ourselves and what we wanted, but probably not the best way to evaluate potential law firm partners.
While 12 months may seem like a long time, we are small and had a few other things to handle (there was this global economic crisis thing). Much of the information had not been gathered before and there were two of us working on this very part-time, but this was a major project so it was worth investing the time.
We pulled together quantitative and qualitative information. We focused on understanding what our client needed from the portfolio, and what we needed as the Legal Department to meet our client's needs. What became clear over the 12 months was that we needed something other than just a solid trademark practice. We needed a firm that would bring a new approach, an open mind, willingness to experiment, and a value orientation to structuring the financial side of the deal.
In the next post: How do you choose a law firm without talking about fees (and are you out of your mind)?
The Firm’s Story
Blogger Lisa Damon is a member of the Executive Committee at Seyfarth Shaw, and has been leading the firm’s efforts to incorporate Lean Six Sigma into its business.
Our story starts back in 2005, when things were good in the law firm world. Years of history across the industry allowed firms across the country to raise rates every year, pay associates in lock step and increase revenues. But there were signs of change, even in 2005 when we started – change that has only escalated with time.
But, I’m getting ahead of myself. First, a word of introduction: Seyfarth (we say “Si - farth,” but answer to most anything) is a large, full-service firm, with 10 offices nationally. We have about 750 lawyers and are known for our culture and client service. That is important as you get to know us, and provides a context that will help you understand how some of the things you’ll read about in this blog came to be. We are a “metal desk” culture -- low on frills and high on value. Turns out that our cultural underpinnings were (and are) vital to where we are now . More on that later.
At the time we started down the road that eventually lead us to Lean Six Sigma, our biggest clients were increasingly talking of flat fees and alternative billing. We provided numbers, but realized that the numbers were really based on assumptions and the little historical data that we could put together. Seyfarth made a decision to take a different route. We wanted to understand our own internal processes – to figure out how we actually practiced law and then make it better and more efficient. Said simply, we knew we had to learn how we could work differently to increase value and quality to clients and provide lower, predictable cost.
Since then, we have been on a journey to better understand and consistently deliver real client value: to learn the art of putting our own interest as a law firm aside and concentrating first on our client’s interest -- knowing that the firm would benefit in the end, if we did it right and true.
As we will talk about in later posts, we adapted the principles of Lean Six Sigma (which we call SeyfarthLean) and began the journey. That road led us many places – from the ACC Value Challenge to many client relationships and now to Ken Grady and Wolverine.
This blog will trace our new and evolving relationship with Wolverine – through thick and thin; establishing project management teams, setting rates, transitioning files, grappling with joys and problems – everything that is part of a client/law firm relationship. We hope by lifting up our curtain, we will help others to grapple with the “how” and “why” of changing the way we work together to serve our collective clients. None of us have it all right and at Seyfarth we are firmly in the midst of the journey but we thought sharing might help. Please post your thoughts and comments as we go forward.
In the next post:
• Lean Six Sigma in three painless sentences; and,
• What do you mean you agreed to represent Wolverine and never talked about fees (are you out of your mind)?
Two ACC leaders were recently honored with top legal industry awards: ACC’s former board chair, Laura Stein, Senior Vice President and General Counsel, The Clorox Company
, is a 2010 recipient of the Margaret Brent Women Lawyers of Achievement Award
, established by the ABA to recognize the accomplishments of women lawyers. In Canada, ACC board member, David Allgood, Executive Vice-President and General Counsel, Royal Bank of Canada
, was named the 2010 Canadian General Counsel Lifetime Achievement winner
Watch ACC President Fred Krebs speak on the qualities that make a good leader in the in-house counsel community and offer congratulations to David Allgood and Laura Stein on their achievements.
I just returned from Vienna and the annual conference of our European chapter
--ACC Europe. Strategic Risk Management: Art or Science?
engaged our more than 250 participants with outstanding speakers from across Europe. The discussions in the sessions and during the breaks were lively and informative. The topics were especially relevant given the recent international financial meltdown and, of course, the Deepwater Horizon
environmental tragedy in the Gulf of Mexico.
The panelists of our opening plenary session, Gouverner c’est prévoir or the Art of Strategic Management: How Does Management See Our Role? encouraged us to take our eyes away from our in-boxes and the possibly low risk daily legal service demands we are bombarded with, and spend more time identifying and mitigating the larger risks facing our companies. Moderated by David Bernick, Senior VP and General Counsel of Philip Morris International, the panel also examined the role of in-house counsel in strategic risk management.
Other panels discussed the nuts and bolts of risk management, the counsel’s role in company ethics programs, and specific legal and business issues facing companies that do business in Europe. I found each session to be valuable and educational, and I greatly appreciate all our members who served on panels and added so much to the conference.
While at the conference, I read a column by David Brooks of The New York Times on risk and society’s response. His words were both timely and disconcerting. His sobering comments have particular relevance for in-house attorneys and others responsible for risk management in their organizations.
Brooks discussed risk assessment and the intersection of complex technology and human psychology. Technology allows us to live well but much of it and the financial and other systems it enables have become too complex for any single person to comprehend. Yet at the same time, it is individuals who must monitor and make decisions about risk. As Brooks notes, “humans are not great at measuring and responding to risk in situations too complicated to understand.”
He goes on to make five key points:
1. We do not understand how little failures combine to create catastrophes (citing Three Mile Island).
2. We acclimate to risk and think if something worked the last time it will work again (the Challenger disaster).
3. We have too much faith in safety and back up systems (more people are killed in cross walks than jaywalking because they fail to look both ways).
4. We combine complicated tech systems with complicated governance structures and tangled and confusing lines of authority and responsibility (Deepwater Horizon).
5. We tell good news and hide bad news (just about everyone).
These are challenging times. Brooks concludes that we must go beyond making technology safer and develop better ways to assess risk and make choices that guard against risk creep, false security and good news bias.
The Brooks column certainly came at an opportune moment for the ACCE delegates as we thought about identifying and mitigating risk. ACC staff asked a number of delegates to identify the risks facing their companies and how they approach it.
Thirty-five conference participants responded to our survey and identified the top five risks their companies face. Most commonly cited were: Contractual (66%); Data protection/Privacy (58%); Anti-trust (54%); Regulatory (54%); Fraud (52%) and Ethics (46%).
Most compelling, companies have developed policies to address these risks and to measure their results. The areas for which companies most commonly have policies are: Data protection (72%); Contractual (69%); Ethics (58%); Corporate governance (52%); Anti-trust (49%); Financial (46%) and Fraud (46%). An impressive 64% of respondents said their organizations assess the effectiveness of their compliance programs. And, 90% of those that do such assessments use similar methods – audits, either random or regular, of specific business functions; general data keeping about the nature and incidence of compliance problems; and qualitative reporting (for example, debrief after an investigation).
As we discussed in Vienna and the data clearly shows, in-house counsel understand the risks facing their companies; and, the in-house bar is actively seeking solutions and putting together sophisticated programs to mitigate these risks and to measure the results.
I admit it: my global travel experience is limited. I have only traveled out of the United States to Canada, Mexico, and the Caribbean. You guessed it: two out of the three trips were for vacation. I am not the candidate of choice for anything international. And, to top it off, I only speak one language: English. When I was in school, we were not required to take a language. Hindsight tells me that this was a grave mistake in the American school system and I went right along with it.
That said, I am proud to say that my circle of friends, acquaintances and business associates are more varied than my global travel. I do not hesitate to ask them questions about their culture or country. We sometimes even discuss the dreaded no-no’s of social circles: politics and religion. But, I ask questions in such a way as not to offend or condescend, but to learn. After all, unless I travel to their countries and live within their cultures, how am I supposed to find out what it’s like? Luckily, the people I know are generous and provide me with details that I bank for further exploration. My global experiences are only just beginning and I seek as much information as possible to be prepared for future travel.
The global business relationship may not be the situation you want to walk into as a novice, as the environment can be nuanced and fraught with cultural and legal differences. This is where ACC can help. We provide not just resources, but people: other legal professionals who serve as in-house counsel in other countries. ACC’s International Legal Affairs Committee is comprised of an active group of members from various companies and stages of career development. They can show you the tools you’ll need to navigate your global journey. They offer insights you may not be able to find elsewhere. Some of their experiences are shared in this month’s ACC Docket. Six feature articles focus on some aspect of practicing law in a global setting. And, the June issue is also one of the issues in which we publish one of our three international-focused newsletters, European Briefings. Finally, if you truly can’t get enough global insight, our monthly “Going Global” and “Outsource Resource” columns are regular reminders that global business is literally a phone call or an email away. Technology has made it so that we can communicate at a much quicker pace, much to the delight of some and the chagrin of others. You never know when you might be called upon to expand your knowledge base to include global matters.
Whether your passport is covered with stamps or waiting to be filled, ACC offers you insight into international legal issues, customs and cultures. From Finland to Mexico, from Bulgaria to Quebec, from Nigeria to Hong Kong, in-house counsel must be ready to address the complexity that international business operations entail. ACC’s worldwide reach and resources provide your law department with best practices that capture a global perspective. And, this global issue of the ACC Docket will help you and your company navigate the globe — it’s a small world, after all.
I had the privilege to attend today’s White House
announcement of the Supreme Court
nomination of Solicitor General Elena Kagan
Previously, I represented ACC at a White House briefing. The White House also solicited ACC’s input during the nomination process on characteristics we would like to see in a nominee. Although ACC does not take positions on judicial nominations, these opportunities reflect the growth and increased recognition of the important role played by the association and the in-house legal community generally.
As a lawyer I find events like this morning’s announcement to be very moving given the setting and the importance of the Supreme Court in our daily lives. President Obama inserted some humor in an otherwise solemn event when he noted that Dean Kagan, if confirmed, will bring a special diversity to the bench; ”she is a Mets’ fan” and Justice Sotomayer, an avid Yankees fan, “has ordered a pinstripe robe” for Dean Kagan.
, a nonprofit organization that provides education programs about law, democracy, and human rights and a partner with ACC on the corporate legal diversity pipeline initiative
held their annual dinner
last week in Washington, D.C. What an evening it turned out to be! The ballroom was packed and charged with energy. The award winners
inspired us with their stories and commitment to the practice of law.
Our former board member, colleague, and friend Tom Sager and his legal team at DuPont were honored with the 2010 Legal Diversity Pipeline Award. With Tom’s support and leadership, DuPont created a banner program that brings their legal team into a Wilmington, DE, high school. At the dinner, it was great to see that DuPont had two tables of employees enjoying the special evening and the kudos for their efforts. Legal counsel Ernest Tuckett was recognized several times for his work. And Pat Quann, the executive director of the Delaware Law Related Education Center, was honored for her role and her partnership with DuPont.
I’ll give you an aside about Tom and why we are especially proud. Tom arranged to fund development and distribution of a pipeline kit and partnered with ACC to develop a program that introduces high school students to corporate legal departments. Many students have never met an attorney and certainly never considered going to law school. Class by class, that is now changing, as our colleagues teach, lead and mentor their local students. Take a minute and watch the Street Law video about this partnership and see why we are excited by this initiative and the results we see.
Also receiving kudos during the evening was a Kentucky teacher who received the 2010 Educator of the Year Award. Joseph Gutmann teaches at the Law and Government Magnet at Central High School in Louisville, KY. He usesthe Street Law curriculum in the second year of the magnet’s three-year program. Mr. Gutmann brings in local law students to teach about practical aspects of the law. A former prosecutor who became a teacher after 9/11, he is an inspiring teacher. With his leadership, the magnet now receives twice as many applications than they can accept.
Finally, the 2010 Advocate of the Year was awarded to Tetiana Remekh, a program coordinator at Teachers for Democracy and Partnership, a Ukrainian civic education NGO, which trains thousands of Ukrainian teachers in civics and law. Working with Street Law, she developed a Ukrainian version of the Street Law textbook, which was approved by the Ukrainian Ministry of Education and Science and is a mandatory part of the nationwide curricula.
We were all honored by the presence of our nation’s top lawyer, U.S. Attorney General Eric Holder. After a standing ovation, the attorney general received the Chesterfield Smith Award. An icon of the bar, Chesterfield Smith was one of the earliest crusaders for diversity in the profession. Attorney General Holder is committed to the concept of diversity and believes strongly that the profession depends on those who follow us.
And, a special thank you to our own SVP and General Counsel Susan Hackett, who served on the host committee for this wonderful event and who has worked tirelessly on the Corporate Legal Diversity Pipeline.
Approximately 40 major corporations around the country have Corporate Legal Diversity Pipeline Programs with Street Law, some of the most notable including Coca-Cola, Turner Broadcasting and McDonald's.
[Attorney General Holder’s remarks from the evening are posted here as well.]