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Taking Charge

At a time when company lawyers are under enormous pressure to hold the line on legal bills, both inside and outside lawyers are feeling intense heat from management to deliver better, more efficient service to corporate clients.
Complicating matters for some companies are recurring tensions that continue to bedevil the vital relationship between in-house counsel and the outside lawyers they hire.
Indeed, annual surveys of corporate counsel done by New England In-House and other sources reveal repeated frustrations in-house counsel have with law firms. The varied and longstanding complaints include:

  • a failure to understand the company or industry;
  • springing too many surprises during the course of litigation or large transactions;
  • talking down to in-house counsel and failing to communicate as needed; and
  • inefficiency related to associate turnover or training.

    While some law firms seemingly have a tin ear to these complaints and are not adequately addressing the concerns of their clients, others – perhaps out of sheer necessity – are building service models designed to address these issues.
    As a result, some inroads are being made.
    Management scrutiny is changing the way legal professionals work together, forcing them to “partner” with each other in creative ways to reduce costs, improve results and eliminate the longstanding service complaints.
    Some of the tools being used by companies and law firms include: client surveys; early case assessments; dedicated service teams provided by preferred firms; and cooperative training and development to cut down turnover and increase efficiency.
    The teamwork is essential since it’s even more difficult these days to stay on budget due to rapidly rising litigation and compliance costs, coupled with increasingly complex business regulations.
    At a recent seminar entitled “Managing Relationships with Outside Counsel” in-house lawyers said they’re using several techniques to improve teamwork with outside counsel for the benefit of their companies. The program was co-sponsored by the Northeast Chapter of the Association of Corporate Counsel and the law firm of Greenberg Traurig.
    Christine Nickerson, senior legal counsel for CVS Corporation in Woonsocket, R.I., and moderator of the seminar, said her company uses “early case assessment” in litigation.
    This process compels counsel at the outset of a case to analyze the costs and benefits of pursuing litigation, and to come up with a plan for case management and periodic reassessment.
    This helps to eliminate litigation surprises, according to Nickerson, and lets outside lawyers know the valuation of the case.
    John Rupp, a panel member and assistant general counsel for Textron, Inc. in Providence, R.I., said his company has trimmed the number of law firms it hires, which means he “can feel comfortable now delegating anything to the handful of firms who know our business extremely well.”
    At Partners HealthCare in Boston, in-house users of legal services periodically assess law firm performances in each of seven key service categories, according to Chief Litigation and Compliance Counsel Paul Cushing.
    “The goal,” Cushing explained, “is to measure performance and improve the work for the client, [an entity] we have a mutual interest in serving well.”
    He added that the law firms working with Partners Healthcare “appreciate feedback and candid two-way discussion.”
    Some law firms are listening to that feedback and longstanding complaints, and as a result are developing programs designed to improve business training and facilitate delivery of services tailored precisely to clients’ concerns.
    While client surveys are common in other industries, law firms have been slow to adopt this client service technique. Nonetheless, some forward-thinking firms are now proactively asking for client feedback and measurement.
    Marti Candiello, director of general counsel relations for Pittsburgh-based Reed Smith, spends all of her time doing surveys and opening dialogues with clients about optimizing service.
    “The key to growing a true partnering relationship that works best for the client is having regular, frequent and structured communications,” Candiello stressed.
    Nixon Peabody uses client surveys to not only measure its “external service” to clients, but to also assess “internal service” among departments, lawyers and staff.
    Chairman and Managing Partner Harry P. Trueheart said his firm uses internal measurements and other quality management principles to boost client satisfaction. “We measure everyone,” Trueheart said, “because every employee impacts the client or the people who represent the client.”
    Discussed in detail below and on the next page are the various ways companies and their outside lawyers are working cooperatively to build productive, long-lasting business relationships.

    * * *

    Partnering and feedback
    According to John Rupp, assistant general counsel for Textron Inc. in Providence, R.I., “a dramatic change in the relationship between in-house and outside counsel has occurred over time. Teamwork between [us] is increasingly emphasized.”
    He recalled that in his early years of private practice he was taught “never to let the client believe they are something other than second chair.” But now he often selects key experts or helps to formulate trial strategy.
    “Partnering with a client is the key to a successful service relationship now,” said Meirion Jones, director of clients and markets for Reed Smith, a firm ranked among the top five in client service by the BTI Consulting Group.
    Jones noted that “clients here are often involved in partner meetings or retreats and some participate in the client care curriculum at Reed Smith University [a program designed with Wharton Business School to enhance personal development of legal, business and management skills].”
    Partners Healthcare in Boston regularly surveys the quality of its top outside service partners and shares feedback with them as necessary to build a better relationship and better results for the client, according to Paul Cushing, chief litigation and compliance counsel at the company.
    “The seriousness of a formal survey and communication of results by the senior in-house team are assets in producing results,” he said, adding that “they reinforce the notion that inside and outside lawyers must bring something to the table together to better serve the client.”
    Partners HealthCare rates providers in seven categories of performance: legal knowledge, skills and results; management of cases; use of systems and technologies; compliance with goals and procedures (as set forth in hiring letters); teamwork with others (other counsel and non-lawyers); cost control; and diversity. The results can be used not only for course corrections, but to reinforce what is being done well or to spread a successful innovation from one relationship to another.
    Marti Candiello is director of general counsel relations for Reed Smith and former general counsel for Sunoco Chemicals. He said surveys are important because “the law is a service business, and satisfaction can only be measured by the client.”
    She visits top clients in person and sends written surveys to others in order to proactively prompt candid feedback. “Clients can talk to me and feel comfortable addressing the issue of how we can serve them better [in part] because I am not the contact lawyer,” she said.
    At Nixon Peabody, some clients are formally surveyed by a third-party consultant while others are surveyed by individual partners. “We ask clients about their business and service issues, and constantly ask how we can serve them better,” says Chairman and Managing Partner Harry P. Trueheart, whose firm was named to the BTI client service “all-star” team. In order to “open clients up” the firm also asks, “What are other people doing that drives you crazy?”
    Trueheart noted that the answers to those questions have helped guide lawyers away from troublesome sins of omission or commission, but he added that the surveys are not limited to clients.
    Nixon Peabody surveys its own employees, from the ground up, because of a belief that internal service is related to external service. “I get reviewed by other employees as well,” noted Trueheart, who added that “people are not shy about saying they were not being heard or we could have taken a better approach to a problem.”
    Christine Nickerson, senior counsel at CVS Corporation, said law firms that do this have a certain appeal.
    “If they are not doing it, then we basically have to do it for them with our reviews,” she said. “In a retail culture, we constantly survey each other,” noting that all CVS departments (such as marketing, legal, accounting) survey each other on “internal service.”

    * * *

    Case assessments, communications and surprises
    In-house and outside lawyers are teaming up on communication and joint planning to reduce surprises and improve on value delivered.
    Christine Nickerson, senior legal counsel at CVS Corporation, said early case assessment and budget planning are critical tools, explaining that “outside people are not mind-readers so we have to communicate our preferences and priorities.”
    But, she cautioned, “You can’t put the budget on a shelf and forget the plan after doing it.” She makes a practice of speaking to counsel on each case at least quarterly to check litigation progress against early case assessments.
    John Rupp, assistant general counsel at Textron, Inc., has followed a similar practice of joint planning on discovery, litigation time-lines, costs and expected benefits.
    “It helps if you line up some ‘trigger points’ along the path to trial where you expect substantive information and returns on investment. If you are not reaching those points, or they are not in line with cost projections, then your periodic assessment needs to change,” he said.
    In-house lawyers agreed that costs are a key factor in litigation decision-making now. “More and more we check the balance of costs and benefits, and you will be successful with Textron by recognizing that reality,” said Rupp.
    He added that relationships are most productive when lawyers understand a client’s values and language. At Textron, they don’t value defense delays and they do like go to trial when they can win.
    “Sometimes we feel like we’re getting blackmailed with litigation, and often we are desperately trying to move cases to trial,” he explained.
    As for communicating, Rupp observed that “if your client’s production people are talking in Six Sigma terms [a methodology for analyzing process and results to eliminate defects and delays] then you might want to understand it, and you can’t make fun of it.”
    Technology tools have also improved communications on global transactions and litigation.
    “The information age has changed everything,” noted Rupp. “Now we use extranets [secure networking sites dedicated to large or global cases and transactions] to facilitate communications or drafting with groups of people from Japan to Indiana.”
    Nixon Peabody has more than 100 extranet sites dedicated to large cases or transactions at any given time, but firm Chairman Harry P. Trueheart said clients value communications at the start of the case the most: “Up-front communication about budget and case management is a client hot button.”
    He also noted that “clients also want lawyers who are well-trained to execute [on a plan].” As a result, the firm conducts an internal litigation college that uses its own top lawyers, together with outside CPAs, professors and other professionals to train litigators in the law, tactics and economics of trial.
    Rupp said the economic impact of e-discovery will specifically require optimal teamwork and training regarding proliferating company data sources. “This has potential for short-term spikes in cost if people are not prepared to acquire some understanding of their [client’s electronic] systems,” he asserted.
    Meirion Jones, director of clients and markets for Reed Smith, added: “Clients are becoming more complex and data is growing, but the only way you can handle it is with better information-sharing and more knowledge of each other.”
    That’s one reason why Reed Smith and Nixon Peabody have both adopted staff-sharing arrangements with some clients, in addition to using technology tools, such as video-conferencing and extranets, for expedited communication.
    Candiello said clients often want and benefit most from up-front discussions, not just about budgets and expected results, but also about time-lines, allocations of work between in-house and outside counsel, and even who handles the files. “Copying and storage alone can cost hundreds of thousands of dollars for a major case,” she noted.

    * * *

    Turnover and training
    The perception of inconsistency has caught the attention of a number of managing partners for large firms. That is one reason they have focused on ways to institutionalize service training, as well as training in law and business.
    Christine Nickerson, senior legal counsel at CVS Corporation, said in-house lawyers can save a lot of money by focusing on how well associates have been trained. “In evaluating a firm for a specific type of project, I always check into the quality of senior associates and even staff because they will be doing a lot of the work,” she said.
    John Rupp of Textron, Inc., agreed, adding that “I don’t mind helping to train some associates, but it can’t all be done on my dime.” He said in-house lawyers must watch for training and turnover issues because they can run up a bill very quickly.
    “You can’t bill us like you are starting from scratch and expect to keep us happy. I got a bill for $83,000 for one month recently, and it was completely out of line with the service,” said Rupp, noting that turnover beneath a key person was partly to blame.
    Nixon Peabody has set a goal of retaining its attorneys and staff, according to firm Chairman Harry P. Truehart. “Better job satisfaction means better client satisfaction,” said Truehart, pointing to job satisfaction surveys that Nixon Peabody has used to guide workplace improvements (they are one of only three firms to be named a “top 100” place to work for the past two years by Fortune, a national business magazine).
    “We have also invested millions of dollars in training,” Trueheart added, noting that lawyers get schooled in not just the law, but client-relevant topics like financial analysis, project management, listening skills and business etiquette
    “We also have some former general counsel that spotlight special approaches to making clients happy, and we use them as sources of information and education,” said Trueheart.
    Reed Smith University has similarly opened its doors to in-house lawyers as both students and presenters. “When I moved from being [an in-house] business lawyer to a regulatory lawyer at one point in my career, the firm put together a day’s worth of training for me,” said Marti Candiello, director of general counsel relations for Reed Smith. “That summed up the difference between lecturing to me and saying, ‘How can I help you?’”
    Paul Cushing of Partners Healthcare in Boston has similarly derived benefit from joint training programs with law firm providers. “We have used outside counsel to help develop our young lawyers in a number of ways. This has reduced our training time, and enabled us to be better collaborators while helping outside counsel to better understand our institution,” he said.
    Candiello suggested that joint training programs can also expose in-house and outside “partners” to each other’s cultural groundings. She pointed to the cultural immersion that comes from walking through the doors at Reed Smith. “From the moment you arrive, there is a sense that ‘we will take care of you no matter what’ and you never hear the words ‘that’s not my job’ because people are taught to find the answer or find the person who knows it for you,” she said.

    * * *

    Understanding the client’s business
    Many clients are working with fewer firms to develop strategic partnerships, and some law firms are using service teams dedicated to particular clients or industries in order to maximize working efficiency.
    “We do strategic partnering with Edwards & Angell, Palmer & Dodge because there are certain efficiencies in having one firm that knows your business thoroughly. Every time you have to explain your business to someone, you lose lots of money and time,” said Christine Nickerson, senior legal counsel at CVS Corporation.
    “One of the things clients hate most is having to explain their company or industry over and over again,” said Harry P. Trueheart, managing partner at Nixon Peabody.
    That is one reason Nixon Peabody came up with “dedicated service teams” to focus on particular clients and industries. Specialized teams in health care, life sciences, syndications and affordable housing are dedicated to mastering those industries without charging clients to do so.
    “We also use metrics to assess whether client service teams are improving service and improving the status of individual relationships,” Trueheart added.
    John Rupp, assistant general counsel at Textron, Inc., said the concept of a dedicated service team “definitely gets my attention” but he added that “costs are still a factor and we won’t overpay for specialized knowledge.”
    He uses a handful of firms regularly, though, precisely because they understand Textron after years of work, said Rupp, who added it took him five years just to learn all the product lines. “We have to let loose of a lot because we’re so busy, and I know if I have an industrial fire, for example, our ‘go to’ people know exactly who to call and what to do,” he said.
    Meirion Jones, director of clients and markets for Reed Smith, has focused all of his time on studying industries and clients to discern what they really want and need in their business. In some cases, Reed Smith has even proactively developed a solution for an industry or business problem before a client recognized it.
    Jones pointed to a confidential package of “total solutions” that was pitched to a media client experiencing adverse affects from unfair competition, legislation and regulation. “Many clients feel frustrated with service levels they get from law firms, so we try to get ahead of them in understanding their business,” he explained.
    Law firms have to not only understand a client’s industry now, but their “culture and tolerance for risk,” said Marti Candiello, director of general counsel relations for Reed Smith. Candiello, a former general counsel, said “it is personally satisfying for [in-house] counsel to work with people who understand their business, their individual needs and their internal clients because that allows them to get the job done rather than focusing on the hurdles to doing it.”
    Rupp affirmed that “knowing the company” is the essence of efficiency because of the growing complexity of business.
    “The day is coming when firms will lock up a global business by knowing the company everywhere it operates,” he said. But Rupp cautioned that “inconsistency in service from office to office is a major obstacle to that happening now.”

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