Performance-based Fee Systems

During the ILN’s 2010 Regional Meeting of the Americas in Houston, Texas last week, we were treated to a presentation by our host firm’s managing partner, Martin Beirne of Beirne Maynard & Parsons, and Jeff Carr, Senior Vice President, General Counsel, and Secretary of FMC Technologies.  Jeff’s presentation focused on "Getting Out of the Box in Counsel Engagement and Service Delivery – the Value Challenge." 

Beirne introduced Carr, saying that he’s the author of the Associate of Corporate Counsel’s Value Challenge – something that he’s been talking about for fifteen years.  Carr said that FMC Technologies is a 9 year old company, with about 120 years of history, and is one of those that touches people’s lives in many ways.  

Carr jumped right into talking about his experience as a general counsel, saying that his legal spend is less today than it was in 2001, in a world where firms’ rates go up 10% a year.  He added that FMC Technologies pays, on average, 107% of their invoices to law firms – he would later explain how and why this happens.

How is it possible to have a smaller legal spend? Carr said companies need to change how they buy what they buy, how they pay for it, and go from being reactive lawyers to being proactive lawyers.  What drives him? If he can save his company $1 million, that equates to a half a cent of share earnings.  That’s what drives companies.

He said that his legal team’s mission statement says that they’re not lawyers – they’re there to help achieve business goals.  Only one person who is currently on his team was with him in 2001 because the others either didn’t want to move when they changed their headquarters to Houston, or they didn’t want to practice law the way that his team does.  They were not willing to embrace change and the discipline that they require to be successful lawyers at FMC Technologies.

Continue Reading ILN Conference Re-Cap: Getting Out of the Box in Counsel Engagement and Service Delivery – the Value Challenge