On Friday morning, LMA delegates gathered to hear the annual general counsel panel, "U.S. General Counsel Discuss Global Needs for Outside Counsel: Is Your Firm on Their Short List?" produced by Inside Counsel and Lloyd Johnson.
The program description read:
This panel of general counsel will discuss high priority needs, challenges and concerns related to managing a large law department. In addition, the panel will discuss the complexities…related to managing a remote professional staff who work outside the United States. Topics covered will include:
- How law firms can help meet the needs of today’s law department challenges;
- What today’s law department leaders see as potential future challenges
- How firms’ managing partners may engage in shared insight discussions with law department leader/counterparts
- How is value received for fees paid assessed by the corporations today?
- What is most useful about a year-end review, aka client feedback meeting?
- Last call: number one need on the law department side: from the relationship standpoint? From the substantive legal needs standpoint?"
The panel was moderated by Silvia Coulter (@silviacoulter), Principal of LawVision Group, and comprised of Alfreda Bradley Coar, General Counsel for GE Healthcare, Mark Roellig (@MarkRoellig), Executive Vice President & General Counsel for MassMutual Financial Group, and Suzanne Rich Folsom (@suzannerfolsom), General Counsel for U.S. Steel.
This year’s panel was designed to be a little bit different – to speak to the legal marketers in the audience, rather than to the attorneys. I felt that it still leaned a bit more towards the latter, which I have no problem with, since it’s my job as a legal marketer to serve my attorneys, and how better to serve them than to share what I’m hearing from clients? But I did feel that the panelists and moderator tried to speak more towards the firms, and how we, as influencers, can guide our attorneys – agree or disagree?
Biggest Challenge for GCs
The first question asked the panelists to address what their biggest challenge as legal counsel is. Folsom said that for her, it is finding the best value, which she defined as a combination of the best price with the best expertise. Coar added that firms who give them "early warning signals" associated with their industry are the ones who bring the best value to her. She wants outside counsel to help her see around the corners in terms of regulatory risks.
The teams that outside firms bring to the mix are also a key part of this though:
It’s all about talent and teams,"
said one panelist. Roellig echoed:
You’re only as good as your people."
The panelists have no desire to try to bring all of the expertise to the table that an outside law firm can bring. They want the "best players" on their teams, and that includes hiring outside counsel in addition to their in-house teams. So outside lawyers shouldn’t be worried that GCs are trying to find ways to avoid hiring outside counsel – they consider them an essential part of their team. To me, that stresses the importance of understanding your client’s business (in addition to the law) even more.
The Inside/Outside Counsel Relationship is Not About the Sexy Stuff
Coar said that firms often focus too much on the "bet the company" cases [aka the "sexy stuff"] – but if she has too many of those, then she’s not doing her job. The day to day work is where inside counsel need the most help, or, as Coar said:
The inside/outside counsel relationship is not about the sexy stuff."
So what is it about? Helping GCs to sleep at night – if outside counsel are helping them to rest easy at night, that helps them to succeed during the day. An essential part of that is bringing value.
Here, the panelists were specific about what value means. As GCs, they try to save money through:
- bringing work in-house
- using non-lawyer professionals, like paralegals
As an example, MassMutual is 70% in-house, 30% outside counsel. Their in-house paralegals are paid $100k+ and do the work that 1st-4th year associates do at outside firms.
GCs expect their outside law firms to use the same type of creativity to bring value. Inside counsel want their outside lawyers to bring them things that they’re not seeing – lawyers have 10 clients, but GCs only have one.
"Value" also means coming up with ideas on how you can use the law to advance the business strategy of the company – don’t just simply try to protect the company.
GCs Want You to Pay Attention & Learn
The panelists made clear once again that they don’t think enough outside counsel are working to understand their business. And it goes beyond learning about what their goals are – they also want you to understand the in-house legal team structure. For example, Coar doesn’t want an attorney to come to her with something that should go to corporate.
Folsom has found that many outside counsel are surprised that her in-house counsel go to court – they handle much of their litigation in-house, and have attorneys in court for weeks on big cases. To transition to outside counsel, they need to know that they can do it cheaper.
The panelists were also surprised by the number of times an attorney or legal marketer has come to them without knowing who the relationship partner at the firm is. Using a CRM system is an important way to keep that from happening – GCs are too busy to do the work of answering those questions.
As they always do, though, the inside counsel brought it back to wanting outside lawyers to understand their business. Somehow, those lawyers that work to understand their clients’ business are still the exception to the rule (this should read "ding, ding, ding: OPPORTUNITY HERE!" to you).
The panelists told us:
There’s knowing the strategy and knowing the strategy."
And outside counsel need to know the difference. Coar said that whatever top five things her chairman is talking about, she’s probably talking about 4.5 of them as well. They’re not operating in a vacuum – they’re all part of a bigger enterprise. She added that the lawyers that get the "stickiness" with her as outside counsel are the ones that understand her business.
They then take their understanding of the strategy, and put action items behind it on how to accomplish that. How can you understand your clients’ business better?
- Read notes from the CEO
- Read industry news
- Read the Chairman’s updates
- Read the company website
If outside counsel understand what a business is going through, they understand what its legal counsel is going through. Then, show how you can help – but don’t just talk about the legal risk, also tell them about the business and operational risks. Lawyers who don’t understand this are "out of touch." Coar said that an outside counsel who thinks in a 360-degree way is the one who really excels, because that’s how inside counsel think.
Roellig said "If you bring me a new legal idea for something that will help my business, I will hire you to do that." So, not only are you bringing value to your client and cementing the relationship by understanding their business needs, you’re also developing your own business.
Another quote we heard repeated again this year – "Be Responsive." If lawyers aren’t available when a client needs them, "you will be gone." It’s a simple thing, but GCs have to keep saying it.
A Business Development Tip
The GCs offered a great tip – if you’re involved in an M&A transaction with a company, at the end of it, there will likely be an in-house counsel without a job. If you’re helpful to them, and keep track of them, they’ll bring you their business when they land at a new company.
Is it Useful When…
- Firms send client alerts? The in-house counsel said that they’ll read an alert if it comes from someone they know well, or if ti comes from someone who has added value and takes the time to say while the alert is relevant. The key here is not to mass email an alert – it has to be targeted to the recipient.
I’ll read the alert if it’s from an outside counsel I know well and has a ‘cover email’ with something like ‘Bullet no. 3 is especially relevant.’"
- Firms send brochures? "20-page glossy brochures full of partner bios won’t get read." Coar added that "Getting more information for information’s sake is not necessarily helpful." Again, what really makes a difference with GCs is when outside counsel provide information that makes a difference to them and their companies.
- Firms send sales teams? The panelists agreed that those firms who send people just for the sake of selling are not as effective. Inside counsel want firms to identify the problem and offer solutions, not to sell on generalities – again, know their business.
It’s all about the "so what?" Relevance to the company and its needs is "mission critical." Coar also cautioned against name dropping other colleagues that you may have worked with at the company. All they want is for outside counsel to prove that they understand the business and can provide excellent service.
- Firms have been your counsel for a long time? Folsom said that "legacy value" is something, but it can’t be the only reason a client stays with you. For example, they’re doing an RFP this summer for all of their outside counsel – how confident are you that your long-term clients would choose you all over again if they were starting fresh?
Firms Should Consider…
- Inviting their clients to co-author articles with them. Roellig observed that no one seems to be doing this, and he’s shocked at how few articles and thought leadership pieces are co-authored with clients. It’s an easy way to make your clients look good, which will help in building your relationship with them.
- Getting input on attorney bios from GCs. Clients know what they need and want from their outside counsel when looking them up online – why not ask them what this is and tailor your website to suit their needs?
- Inviting clients to join firm associate training. Firms are already training their associates to learn the business of law, and clients are wondering why you don’t invite them to come – it’s a value add, PLUS they’re sitting with people who they may ultimately give work to. Another idea is to send your team to the client to teach a course and offer CLEs.
- Nominating their clients for awards. Again, clients want you to make them look good, however that can happen. One of the ways to achieve this is by nominating them for awards – it makes them look good, and it shows them that you care about making them look good and their business.
Diversity is still an important issue for clients. Demographics are changing and clients expect law firms to change with them – after all, clients are recognizing the changes in the customer bases. 57% of undergrads are women, so clients want to see more women equity partners, and more women as the lead person on their matters.
But token diversity doesn’t cut it – showing true dedication to diversity is the future. So the team you bring to a pitch meeting has to have the right qualifications; clients don’t want you to grab someone when you’re going out the door to a meeting just to meet your diversity requirement. They want to make sure that person has the experience.
Clients also want to know if your firm is investing in your younger associates – diversity is about more than race and gender; it’s also about generational diversity. Coar said that she wants to see a firm’s commitment to continued attorney development. She suggested finding a diverse superstar at your firm, telling your client about them, and asking them to mentor the person. The inside counsel would be happy to do it.
Some Final Thoughts
The GCs had a few final (and important) thoughts to share with us:
- On secondments: "Don’t try to make money on a secondment. Charge it at cost. We’ll pay the salary and that’s it." There is invaluable experience and opportunity included in a secondment, in terms of lawyer development and furthering relationships.
- On hourly billing: "I have no interest in buying hours. I don’t want hours. Law firms sell hours. I want results." That’s not to say that the billable hour is dead, only that however you get to the results doesn’t matter to the client as much as the results do.
- On meeting with outside counsel to review the relationship: That’s a good thing – Roellig has a yearly business meeting with one of his firms to provide feedback on matters, results and specific attorneys." The GCs agreed that feedback needs to be less diplomatic and more truthful, because otherwise it’s a disservice to the relationship.
Another great GC panel in the books, and huge thanks to all of those who tweeted the session – your tweets made this recap possible!