Gain insight into what law firm clients are really looking for.
There is a growing sense of urgency for legal innovation, and it is being driven by our clients. More and more corporate clients of legal services are managing legal matters for strategic advantage and efficiency. This focus has led to increasing investments by corporate law departments in process and practices for LPM and firm management. Nowhere is that more apparent than at the Corporate Legal Operations Consortium’s (CLOC’s) Corporate Legal Operations Institute.
More than 2,000 members of the legal “ecosystem” attended the CLOC’S third annual Corporate Legal Operations Institute from April 22–25 in Las Vegas, up from just 500 two years ago. CLOC does not yet offer law firm membership, but it does welcome law firm attendees to its annual Institute, and included law firm speakers in roughly 20 percent of its nearly 80 sessions over four days.
As law firm attendees, it was fairly easy to identify trends in what our clients were saying at this year’s Institute. Indeed, a transcript of the Institute sessions would likely reveal that compliance, communication, collaboration, diversity and data were among the most commonly spoken words by both the presenters and audience members. Following are the actionable insights we took back to our firms from the CLOC conference.
Clients Want: Compliance
Clients want increased compliance with their Outside Counsel Guidelines (OCGs) — the documented specifications clients expect us to follow in providing legal services. Although we heard one corporate in-house professional muse that it must be overwhelming for outside counsel to receive such long and specific documents from every client, we heard another note that her department refers to them as “Outside Counsel Requirements,” not guidelines. The clients who are driving the evolution of the delivery of legal services are demanding consistency and adherence to their specifications. And while it may seem that some clients don’t enforce every detail in their OCGs (not uncommonly as a result of staffing constraints on their end), they are taking note of the firms that are, without being prompted, making an obvious effort to comply with all their specifications. Law firms should ask themselves if they have enough dedicated resources to comply with their clients’ carefully crafted OCGs.
Most law firms follow modified-cash accounting, which means revenue and expenses are incurred when cash comes in or goes out the door. But many of our clients are publicly traded companies and most follow GAAP accounting and they need to record their invoices when services are provided. Receiving timely and accurate invoices is critical for our clients to have complete information for corporate filings, disclosures, internal reporting and financial statement preparation. Law firms should ensure their billing practices meet client demands and build the appropriate policies, procedures and back office support to do so.
Clients Want: Communication and Collaboration
Corporations want deeper, more dedicated and strategic relationships with fewer law firms. Fostering these relationships develops institutional knowledge about the corporation’s business and allows for increased quality, predictability, efficiency and value. In developing these relationships, law firms should focus on discussing, understanding and responding to the clients’ pain points, priorities and aligning incentives.
Prepare detailed budgets and share them with clients. Budgets demonstrate the firm’s plan, value, and commitment to communication and predictability. Detailed budgets first serve as a prompt to identify areas in need of additional clarification (e.g., scoping, cost structure, or staffing) and then serve as a reference point for communication as the work progresses.
Corporate legal operations professionals want to talk directly to their outside counsel counterparts. There is a growing understanding that if certain conversations, planning and problem solving relating to the delivery of legal services (rather than the practice of law) is handled by the operations teams on both sides, both teams will operate more efficiently, creatively and collaboratively.
Through communication and collaboration, firms can provide services that are highly valued by the client, at little or no cost to the firm. For example, inviting clients to participate in pro bono opportunities and offering CLEs may take some burden off corporate legal operations professionals to provide such opportunities in house, freeing them up to focus on tasks that are of greater value to the business objectives of the company. Does your firm prepare a regular internal media monitoring report about a particular client or industry? Consider offering that report to the client. Do you have a talented set of summer associate recruits? Consider offering your summer associates the opportunity to split their summer between your firm and working in-house with one of your clients. There are countless ways to creatively partner with our clients. Presenting ideas and options like these to your clients will demonstrate your commitment to deepening the relationship.
Clients Want: Diversity
Law firm attorney population is 83.6 percent white (Vault/MCAA Law Firm Diversity Survey, 2017). Further, despite the increase in law firms hiring minority lawyers (24.4 percent in 2016), the percentage of minority lawyers leaving firms is increasing as well (21.8 percent in 2016) (id.).
Based on a 2018 CLOC survey, “35 percent of legal departments make outside counsel or law company hiring decisions based on diversity.” Clients want to hire diverse teams as part of the core values of their organization, but also because those teams are proven to be more innovative, efficient and likely to achieve desired results.
There is opportunity for outside counsel to achieve a competitive edge through a focus on diversity and inclusion programs.
Clients Want: Data
Many in-house legal operations teams are developing dashboards and reporting tools (at varying degrees of sophistication), in part to evaluate the law firms they are working with, rating them by a variety of metrics. How do you secure your firm’s place at the top?
Do what you say you’re going to do. Did you propose a 50 percent diverse team? Did you propose a team with only one junior associate? Did you promise in your RFP response to provide regular budget reports? Your clients may be using their dashboards and data to track your promises against your delivery. Develop your reputation as a trustworthy and valuable partner by standing by your promises in measurable ways.
Design your own processes to collect data, allowing for traditional, nontraditional and custom data points that are important to your clients (e.g., matter categories, financial data, practice group data, rates/fixed fee, team member statistics and matter details including things like how many depositions, how many experts and how many documents were reviewed). In designing your data collection, communicate with your clients to understand what metrics they value.
Clients want a forum for clear, honest and data-driven communication and reciprocal evaluations. Share your data with your clients and use it to start those important conversations.
Moving Forward With These Insights
As legal operations’ visibility, role and importance in the legal industry increase, we see real and (expected) lasting shifts in the industry. Corporate legal departments are achieving higher levels of operations maturity and law firms must keep pace or, ideally, take the lead. To do this, we must respect and adhere to our clients’ rules and guidelines, foster open dialogue and true partnerships, understand and take seriously our clients’ priorities and values, and track all this through data points to facilitate continuous learning and improvement to our delivery of legal services.
More on CLOC and the Corporate Legal Operations Institute: Attendees of CLOC’s Corporate Legal Operations Institute include corporations, law firms, regulators, legal technology providers, law schools and outside service providers. CLOC membership is currently at 1,200-plus, covering more than 600 companies — including 50 percent of the Fortune 100 and 26 percent of the Fortune 500, from 40 states and 37 countries.
David Alkins is the director of matter planning at Nixon Peabody, LLP. A certified management accountant, David is an MBA-educated finance and accounting professional delivering actionable information and solutions to enrich client service. David leads the firm's legal project management team, which curates valuable data for decision-making purposes. He provides project management, pricing, budgeting, training and analytical support to attorneys and clients, collaborating with them to improve communication and efficiency.