We’re back in Austin after three days of learning and networking at the 2016 ACC Annual Meeting in the City by the Bay. We enjoyed meeting corporate counsel both national and international who came to discuss best practices, tactics and swap ideas on what was working for their department. We especially enjoyed keeping everyone caffeinated with Nespresso drinks and introducing them to the cro-dough (croissant + donut), which was truly life changing.
The predominant theme that we heard throughout many of the panels was the idea of building trust and communication and working on the relationship between inside and outside counsel. Many GCs reported they were devoting effort to fostering this relationship. One recommendation was to set very clear expectations with outside counsel as to what corporate counsel is looking for from the relationship and define what success is for the project. Craig A. Levine, GC for WASH Multifamily Laundry Services, recommended one way to build this strategic partnership was to get outside counsel to feel like they have skin in the game. Dangle a carrot to encourage positive outcomes and reward them accordingly.
Continuing with the theme of building trust, members of the panel “Raising the Bar for Law Firms: How to Move Outside Counsel into Integrating and Delivering Managed Services” suggested corporate counsel trust a firm to staff the project appropriately and with high-caliber personnel. If there’s a problem, they recommended communicating and assessing if they can handle it internally. Trust also comes down to transparency and reasonableness in billing. Trisha Kozu, Sr. Attorney at Microsoft, gave an example of a time when a project manager from a law firm charged an $8 fee for driving over a toll road. She said she was “irate” that the firm felt it was more important to recoup $8 than thinking about their long-term relationship. Firms should consider this when billing clients and corporations should have a conversation with firms if costs like this are billed to them, or consider alternate billing arrangements altogether.
Speaking of billing and costs, many of the panels shared their alternative fee arrangement usage and tactics. While in years past this conversation was pretty rudimentary, this year we heard about some of the more sophisticated and creative ways that corporations were implementing AFAs. The favorite AFA for litigation was phase-based, fixed fee arrangements, which allowed firms and corporations to evaluate costs on more predictable tasks early, then re-evaluate as the matter progressed to later phases. This avoids highly variable, complete matter budget estimates at the outset. The main takeaway: Figure out what would work best for your particular project, have a conversation with outside counsel about your goals and how the arrangement would meet them and continue communicating throughout the process so there are no surprises.
An additional theme we heard from many panelists was the idea of running the legal department more like a business. This includes better predictability, transparency and cost certainty through things like increasing use of project management, standardizing processes, documents, templates and providing strategic guidance of the company. Many panelists emphasized the need to make data-driven decisions whether in AFAs, becoming a profit center, or changing the legal service delivery model. William Henderson, Professor of Law and Val Nolan Faculty Fellow at Indiana University Maurer School of Law, expressed that studies show in just five years, corporations will spend more in-house across the board than on outside counsel. For this reason, legal departments need to start being smarter about how they’re run. Norman Brothers Jr., General Counsel for UPS, had some great advice for fellow GCs. He said that he hires “problem-solvers not issue-spotters.” He went on to say that lawyers are great at spotting problems, but if you’re thinking like a business owner, it’s important to come up with solutions as well.
“I hire problem-solvers, not issue-spotters.” – Norman Brothers Jr., General Counsel, UPS
Overall, we enjoyed the perfect weather, retro yet comfy inflatable couches and another year of learning from smart faculty. We’re already looking forward to Washington D.C. next year!