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CCCA_V4No3_Closing-FIN.qxd:CCCA_V1No2_BackPg-V1.qxd 9/2/10 1:25 PM Page 54 Closing The Deal How globalization is changing the legal landscape Law firms must transition to a true "business model" to meet needs of national clients with global interests. he globalization of business has creat- They need to invest to expand their their clients well in each of their home mar- Ted a new landscape for organizations global footprint to attract and retain large kets. At the same time, they worked to try and their legal departments. More and transactional work. I’m talking about the to provide efficient services at a lower cost. more,organizations are doing business not kind of multijurisdictional work that needs only in their home jurisdiction, but in the support of a large law firm. Drive the process many other jurisdictions as well. The challenge, of course, is that global The demands of globalization are clearly part As a result, some of the legal spend asso- expansion means increased investment of the way the business world is evolving. ciated with these activities is moving away and higher costs which these law firms So too are the needs of legal depart- from the home jurisdiction to new jurisdic- need to manage. Doing so, in a time of ments to reduce costs, while, at the same tions.To my mind, this globalization is fun- increased pressure by law departments to time, serving their organizations’ increas- damentally changing the legal landscape. reduce their own costs, will need creativ- ingly global mandates. The capacity of large law firms to offer ity and a reassessment of the traditional Pressure within legal departments to global legal services to their national clients, law firm model. reduce fees and costs has opened the door through a global footprint, has been of to increasing dialogue between in-house increasing importance. It has also been a True “business” model counsel and their external counsel to competitive advantage,which is now an even In my estimation, in order for law firms, explore new approaches to the price and stronger advantage due to globalization. both large and second tier, to be compet- delivery of legal services. Still,as globalization intensifies,these law itive, they need to transition to a true As in-house counsel, we need to help firms are assessing how to best expand their “business” model. drive these changes so as to best benefit our global footprint. What do they need to I am talking about a model that truly organizations, while also realizing that our do to meet the needs of their home-based empowers their managing partner, who, external law firms are also undergoing, and national customers so they can follow armed with a CEO-style mandate, can need to undergo, significant changes. them abroad? really bring about the long-term neces- We need to talk with our law firms sary changes that are required in this new about their culture, their business model, Second tier law firms world of globalization. This means and how they can evolve to meet the needs At the same time that large law firms con- changes in culture, efficiency, and client of legal departments. sider expanding their global presence, servicing and delivery. While in-house counsel need to be some legal departments are sending a por- I’m thinking about the kind of necessary forceful in our discussions with external tion of the more stable, routine work to changes that were undertaken 10 or 15 years counsel,we also need to remember that this high quality second tier law firms. ago by the “big four” accounting firms. is not a war. Rather, this is a new way of For this kind of routine work, as They recognized that if you want to working together, a positive new dimen- opposed to a “ bet-the-farm” file, this type have global customers, who, for example, sion to a relationship that must evolve. of firm can often provide a law department need audit and accounting services in If in-house counsel do not help to with as high quality work as a large law multiple jurisdictions, then you have to drive the change, the change will not firm, but at lower cost.At Bombardier, for change your firm’s structure. come as quickly or be as profound as it example, we have made some arrange- These accounting firms changed their needs to be.We must be part of the cul- ments with high quality second tier law model, for example, their reliance on the ture that brings about this change. firms in Canada, the U.S. and Europe, for hourly rate.They tackled their challenges by this type of work. adjusting their mindset to think as “busi- Daniel Desjardins is senior vice-president PIERRE CHARBONEAU As a result, large law firms could find nesses,” with strategic planning and a global and general counsel at Bombardier Inc. themselves caught in a bind. footprint, while making sure they served (danield@bombardier.com) 54 CCCA Canadian Corporate Counsel Association FALL 2010