With January winding down, there’s still time for one last New Year’s Resolution in our industry. This one comes from a recent survey of in-house counsel, conducted weeks ago, co-sponsored by the Association of Corporate Counsel and The Counsel Management Group. It asked, among other things, “How confident are you in your outside counsels’ ability to help achieve your 2015 budget and financial goals on the matters they handle?”
Only 10 out of 32 respondents (31%) said they are “confident” or “very confident.”
Really — only 31%?
In analyzing these results, a few questions come to mind. How did we get here? Does it really matter? And what should be done?
How did we get here? A couple of familiar answers speak to how we’ve arrived at this point. One is that “people are busy” and “there are not enough hours in the day” to do everything on the wish list. If something has to slip, the thinking goes, let it be budgeting or forecast updates, not the not quality of the legal work performed. A similar bromide often heard is that “lawyers are not good managers.”
While there may be some truth to these notions, I think they miss the mark. An old phrase comes to mind — “claim your weaknesses and they are yours.” Are we really prepared to say that high quality legal work and sound fee management is too much to ask? I don’t think so. That sort of either/or thinking is outdated, I would say. Clearly, you can have both. And some in our industry already do, showing that it is possible. Sound financial management is not too much to ask for very smart people running multi-million dollar (sometimes billing dollar) firms. More alarming, I would say, are those instances where outside counsel’s financial management has missed the mark repeatedly, but nothing changes.
Does it matter? Yes, but not always. Sometimes, in the face of sub-par fee management, law firm bills keep getting paid and new matters keep arriving. That is, until they don’t. Many an outside counsel has been quietly cycled off matters or seen work dry up because they are not responsive enough on the financial management / value proposition side of the equation. We don’t read headlines about this, but it does happen increasingly. And the impetus behind this is often increased cost pressure on Legal Departments and companies in general. That is not going away.
What can be done? Well, better processes and technology can help. But more often, the real answer lies in improved focus and commitment to getting this right. If a law firm already has a strong culture and foundation regarding quality management, then calibrating to improve on the client matter / financial management front is doable rather quickly. If, on the other hand, the firm culture and attitude has overlooked quality management and related accountability — then the job is harder, and will take longer. A half-hearted run at “metrics” will not move the needle if there is no culture of performance.
Bottom line? Clients are focusing more-and-more on fee terms and law firm financial management because they have to. Much of the improvement here lies in good, old-fashioned commitment and execution. Law firms who get it right today will see benefits in the short term, and even more in the long term. Those who continue to ignore are missing a great opportunity to boost client confidence in a key area.