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CCCA_V4No2_Dept-Performance-FIN.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 4/29/10 3:56 PM Page 11 Performance In The Law Department “ Only 32 per cent of law departments have run a formal procurement process to select in defining what their company matter budgeting for each fee expects in “value” from their law their law firms. earner, coupled with a single firms. Without these “devils in the ” blended rate for the team, are a details,” all of this will be yet anoth- good start to paying the right er passing theoretical exercise and price. Making commitments for the cynics and sceptics will be right again. that there is a minimum of working com- threshold volumes of work over two to General counsel should consider the ponents to building a sustainable relation- three years will provide another incentive answers to the following questions when ship between legal departments and their to the firms to build teams and keep their planning a review of their relationships law firms: members engaged. In a few cases, it is also with external counsel: • What does the global economic climate possible to introduce results-based billing • Are you willing to end relationships do to the department’s priorities for the for transactional work and defence litiga- with “legacy” firms if they don’t make next 24 months? tion. General counsel have to engage in changes to become more efficient or to • How will the legal department’s contri- conversation with their primary firms provide more “value-driven” services in bution to corporate priorities be meas- about pricing that is not a variation of the future? ured this year and in 2011? hourly billing. • Describe briefly how you judge value in • Rapidly increasing workloads for corpo- Few have the appetite and the time to your outside counsel. rate counsel are predicted for the next two do this. And yet, it is alternative pricing • What describes and distinguishes those years.What won’t get done? What is the that is the key to addressing attrition and outside counsel who provide a high impact on attrition in the law department? leverage issues.The economy and its effect degree of value? • There is more pressure for faster turn- on companies everywhere should spur • Have you communicated to your out- around. What measures are being con- corporate counsel to secure better value side counsel any suggestions for increas- sidered to meet this challenge? from their preferred firms. ing value? • How will you reconcile the pressure to Adapted from: The 2009-2010 Lexpert/CCCA • Have you changed the way that you reduce legal expenses with items one Corporate Counsel Directory andYearbook,pg 95 manage outside counsel? to four? • Are you willing to insist that your law Nonetheless, there remains the financial Richard G. Stock, firms propose alternative fee arrange- side of redefining the value proposition with M.A., FCIS, CMC ments with incentives for productivity law firms. After the volume discount has is a partner with and for success? been attained, in many cases years ago, how Catalyst Consulting. else are costs to be reduced? Some advocate The firm has been Getting started now that change will only happen if the general designated by the In order for the value proposition to work counsel is prepared to understand and chal- Canadian Corporate in any environment,there must be a long- lenge the law firm business model. Counsel Association as a Recognized Supplier of term commitment from the company and It becomes possible to tilt the hourly Law Department Services Consulting. It is the its law firms which is built on trust and billing model in favour of the corporate Recognized Provider for Legal Department shared expectations. My 30 years of expe- client when the general counsel chooses Consulting designated by theAustralian Corporate rience in retaining counsel, managing a to retain balanced teams of lawyers with a Lawyers Association. For law department strategy national law firm, and then advising legal strong presence of associates and a healthy that works, Richard can be contacted at (416) departments and law firms has taught me delegation of challenging work. Detailed 367-4447 or at rstock@catalystlegal.com. ÉTÉ 2010 CCCA Canadian Corporate Counsel Association 11