 By Brigitte Herschensohn, President of Herschensohn Strategic Development, a consulting firm specializing since 1999 in effecting major strategic transitions within law firms.
Attention law firm marketers: selling doesn’t work, and neither do boilerplate pitch books or calling prospects to alert them to just-filed litigation. We consistently ask law firm attorneys to listen to their clients; isn’t it time we did the same?
Law firm and general counsel panelists spoke at Ralph Baxter’s Law Firm Leaders Forum sessions on “How Outside Counsel Are Selected” presented by Glasser Legalworks of Little Falls, N.J. Speaking at the program held in New York, the panelists were unguarded, personal and specific about the hiring mechanisms and actual thought processes behind the selection of outside counsel.
1. Get intimate with the client
Both panels unanimously emphasized that law firms must know clients as well as legal matters to win business. Investing time and money to understand a client’s business operations, objectives, challenges and working styles gives a law firm the edge in hiring.
Lawyers Agree That It Takes Work to Get Work.
“Lawyers at King & Spalding are trained to learn as much as possible about their clients before they ever talk to them or meet with them.” explained Walter Driver, Chairman of King & Spalding. King & Spalding realizes that it may require $10,000 or more in time to adequately prepare for a single new business meeting, and they will invest more to win a greater share of work. “If the revenues from a client can be valued at $10 million a year for 10 years, you need to invest more in getting the work than just binding together boilerplate materials that clients won’t read,” Driver added.
 Candace Beinecke, Chair of Hughes, Hubbard & Reed, described how her firm routinely “does the work to get the work.” Hughes Hubbard lawyers often learn enough about a prospective client to actually present several appropriate legal options and analyze the potential outcome of each when attending a meeting to seek new business. Doing the work before getting the work treats the prospective client like an existing client, usually compelling them to continue the discussion via a formal engagement.
General Counsel Feel Strongly That Getting to Know the Client is Paramount.
Chris Dewees, Senior Vice President and General Counsel of JDS Uniphase, urged that law firms understand how law departments are perceived within a corporation to understand the general counsel’s objectives and pressures. Dewees advised law firms to ask who the general counsel reports to and whether the GC takes part in the strategic objectives team. Dewees added that what matters most for outside counsel is “understanding the client as intimately as possible–their basic culture and the interactions among and between people.”
Mark Chandler, Vice President and General Counsel of Cisco Systems, agreed and offered this advice: [W]alk a mile in my moccasins regarding the challenge that I’m trying to accomplish. Develop a broad view of us – our PR space, government regulations, litigation – and bring it all together. Be a partner with us at that level.”
Style and Preferences Are Important.
James Potter, General Counsel at Del Monte Foods, believes that “outside counsel usually don’t ask or try understanding how each law department is different.” For example, Potter says that Del Monte is “professionally friendly, even with adversaries, and we don’t like sharp practices.” In contrast, ChevronTexaco’s law department is very metrics driven, and Charles James, ChevronTexaco’s Senior Vice President and General Counsel, stated that he is hard-edged and wants to “get” adversaries. Matching the right personalities or styles to those of the client requires intelligence gathering using a firmwide CRM system, talking to other contacts at the company, or doing primary or secondary market research.
 2. Stop the selling
The second most common sentiment on both panels was that selling doesn’t work. General counsel know when they’re being “sold to” and it can destroy any prospect of working with them. Ralph Baxter of Orrick said that selling has “the negative connotation of pushing pre-selected services, whether a client needs them or not.”
Don’t Call Us, We’ll Call You.
In fact, Charles James of ChevronTexaco is so averse to sales pitches from law firms that he vigorously told prospective outside counsel:
- “Stop the cold-calling.”
- “Don’t send any more primers, newsletters or bulletins on Sarbanes-Oxley.”
- “Don’t call about the latest litigation filed against us. By the time a lawsuit is filed we already have counsel.”
- “We know where you are. If we want you, we’ll call you.”
Mark Chandler of Cisco Systems agreed, citing a recent antitrust filling against the company involving a minor product with narrow exposure. Calls from six outside counsel requesting “urgent” meetings about the case “ticked” him off because it showed that “they didn’t understand the value level of the suit – that it was something best handled at a low cost and in-house.”
Chandler and James expressed similar agreement on the dangers of overselling a firm’s capabilities. “Stop selling too many things—especially if you don’t have the expertise,” Chandler warned. James agreed, urging, “Don’t try to prove competence in all things. Be honest regarding capabilities and when a firm can’t do something, say so.”
The law firm panelists conceded that selling (in the form of pushing services rather than learning about and providing relevant insight to the client) is detrimental and unwelcome. As King & Spalding’s Driver said: “By the time you’re at the meeting, you’ve already made the short list and clients know you’re qualified, so stop presenting. At this point, in-house counsel want to know if they can work with you.”
3. Preferences and Requirements
Each general counsel on the panel had very distinct preferences and requirements about the outside counsel they hire.
JDS Uniphase
Chris Dewees and the Uniphase law department look for:
- Core competencies in law firms – to held decide what work to keep or send out. Dewees cautioned that cost is still cost, whether the legal work is handled inside or outside.
- Current relationships with outside counsel — when Dewees knows a firm intimately, he understands its core competencies and the right attorneys for the work.
- Style fit – Dewees emphasized that people want to work with others who think, act and respond as they do. “Therefore, you cannot treat all clients the same.”
Cisco
To evaluate and assign each matter, Cisco uses a value matrix that categorizes the risk factor, complexity, corporate implications and skills involved to determine how much should be spent and whether the matter is best handled in-house or by outside counsel. Cisco differentiates between “mission-critical” and “non-critical” matters and the former are always handled in-house. Any firm expecting to do business with Cisco should know about that matrix, and where potential matters fall on the chart.
Del Monte
Del Monte’s attorneys can pick their own lawyers, but James Potter sets the department’s parameters in selecting outside counsel:
- Cost in light of objectives and based on the significance of the matter.
- An approach compatible with the company’s belief in high integrity and professionalism.
- Diversity – half of Del Monte’s associates are people of color. If a firm does not yet have high diversity, it must show that improvements are in the works.
- Process — “outside counsel should describe how they’ll tackle the work. If the process and approach seem good, that’s what I’ll hold my staff accountable for.”
Potter also identified two criteria that are not significant in Del Monte’s choice:
- Personal chemistry – Potter believes that while staff and outside counsel should communicate well and have similar approaches, skills are more important.
- Prestige — the “safe choice” of a well-known firm should a major case be lost. Potter understands that “results are driven by facts, circumstances and things sometimes outside anyone’s control, so some cases will be lost and that has nothing to do with the outside counsel’s competency.”
ChevronTexaco
At ChevronTexaco, Charles James looks for:
- Critical competencies within their five main recurring issues and problems (but mainly environmental, oil and gas).
- The ability to identify skills and process where ChevronTexaco’s in-house department is weak, then provide training for improvement.
- Partnering relationships with firms that are willing to work with the company the way in-house counsel want to work.
4. The added-value factor
General counsel want outside firms to add value by sharing directly in the business process. For James at ChevronTexaco, that means services like an early warning system for recurring issues, training and support for the company’s objectives-based litigation management, and a personalized approach to meshing with the company’s business managers. At Cisco, Chandler defines added value as creative or alternative fee arrangements, particularly those that involve risk sharing in the fee structure. “Eighty percent of Cisco’s legal spending is not on a billable basis,” Chandler said. The company’s routine work is almost all fixed fee and RFP-based.
However, sharing risk comes in a variety of forms and Chandler recounted an anecdote that humorously underscored its importance and bonding potential. He told the audience how, when he and Christine Lagarde, chair of outside counsel Baker & McKenzie, were faced with the prospect of crossing a muddy field to avoid being late on a visit to the facilities of an opposing party, “Christine took one long, last wistful look at her Ferragamos and said: ‘Let’s cross!’” and they took off to traverse the deep bog. “Now, that’s risk-sharing!” Chandler beamed.
5. Feedback keeps the relationship
Potter said that feedback is very important to him and his department at Del Monte, but most firms don’t have a customer-friendly way of getting feedback after each matter. “So firms don’t know that work sometimes just ‘fades away,’ for some niggling, small little things that could be easily corrected.” How should firms go about getting that feedback? “Lunches and twenty-page surveys are bad,” Potter said. Instead, he suggested an almost anonymous and non-threatening mechanism that assures the client that the feedback is taken to heart and not lost in denial or inattentiveness. James added that feedback is a two-way street: ChevronTexaco does an annual review of their major providers.
Sometimes firms never get some of the most important, yet elusive, feedback. Potter, for example, observes opposing counsel for their potential to handle future work from his company. And James added that junior in-house associates who are not respected by high-powered outside counsel may be tomorrow’s general counsel at a growing company—with a long memory for the treatment they received.
Such examples bear out Ralph Baxter's synthesis of the common threads expressed by virtually all the speakers on both panels. “The selection of outside counsel really comes down to human issues: interest in helping the client achieve what it wants; understanding the client; and building a relationship of trust and confidence.” |
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