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Contributors:
Elora Schatzker, Carline Bertrand and Catherine Mitchell

It was another packed conference room as marketers and lawyers gathered to hear insights about the lawyer-client relationship from the client’s perspective. LMA Toronto’s 4thAnnual General Counsel Panel, held on November 2nd, 2011 featured four in-house lawyers from a variety of corporate backgrounds: Cheryl Foy (General Counsel, ViXS Systems Inc.), Av Maharaj (Vice President and Chief Counsel, International, Kellogg Company),  Georgia Sievwright (Vice-President, Law and Government Affairs, Hewlett-Packard (Canada)  and Howie Wong (General Counsel, Toronto Community Housing).

If there was a common theme throughout the discussion, it was the need for lawyers and their clients to communicate as a means of strengthening their relationships.

Communicate, communicate and then communicate some more, here’s what the panel had to say about how to do that.

Understand our business, our industry and us

One point that was raised several times during the course of the session was the need for lawyers in private practice to understand the client’s business and industry. Cheryl Foy recommended that the best way for law firm marketers to help is to assemble background information dossiers on their corporate clients. These dossiers should be updated at least annually, and should be shared among all lawyers working on the client’s file.  She stressed how important it is that all lawyers involved understand the client’s needs – and not just the lead relationship lawyer. Cheryl likened this approach to having a client relationship manager. All panel members agreed that when you understand your clients’ businesses, it’s a pretty good guarantee of a long term relationship. They mentioned several ways for outside counsel to get to know their businesses. For example, most agreed it would be a worthwhile exercise to make a presentation to their counsel’s legal team about their company.

Another important element of communication that came up repeatedly was the need to match the outside lawyer’s communication frequency and style to that of the in-house counsel. Av Maharaj noted that he doesn’t have time to read lengthy memos – he would prefer to cover most issues with a brief phone call. And in response to a question from the floor, all four members of the panel agreed that outside lawyers should not hesitate to ask their clients about their communication preferences. It demonstrates a hunger and humility to learn.

About law firm billing practices

To no one’s surprise, the panel members had some very strong opinions on law firms’ billing and pricing habits. Panellists discussed the relative merits of using junior lawyers on a file and the evils of “creative docketing” but time and time again, the issue of communication was raised as a way to smooth over many of the issues posed by high law firm prices.  The four panel members suggested a number of ways to improve communication including providing progress reports, explaining how costs will be managed, ensuring that a firm’s work product (and the resulting bill) doesn’t go above and beyond what that client needs, that the bill includes a summary of what was produced and value provided in addition to the dockets, and involving the in-house lawyers in decisions about staffing a file.

Here are several additional comments made by the panellists on a variety of topics.

Ways that marketing professionals can enhance or develop the client base

• RFP responses tend to be either too generic or too creative. Customize and cater to our business and to us as a client.
• We are willing to take the time to complete client feedback exercises, especially if what you learn will be acted upon. Follow up on your actions -- it does make a difference. But you should encourage your lawyers to collect this regularly. If I value the relationship and I’ve invested in it, I will pre-empt with unsolicited feedback.
• Cross-selling is important. You would be surprised at how little may be known about your firm’s full skill set, so be sure to educate your clients. The example given was specific: After attending firm events/dinners over a five year period, the in-house counsel still didn’t know what other services the firm provided.

The good, the bad and the ugly on how law firms are delivering on the value proposition

• First and foremost, to add value, you need to understand what we need. For example, what keeps me up at night is my team’s relationship with our various business units. How can you help me with that?
• We have to report against our budgets monthly, so know this and help us with it.
• Make it easy to pay you by tracking against budgets. I have a full time person just tracking legal fees against budgets – law firms should do this.
• There is a growing preference for flat fees vs. hourly rates especially for simple or repetitive tasks as this helps with predictability of budgets.
• Tere is no need to reinvent the wheel here.
• We’re not opposed to juniors learning on our files, but you should manage the costs and examine the value we’re getting from it. In some cases, it may be more efficient to pay a senior partner’s rate for two hours of work than to pay a junior lawyer’s rate for 10 hours of work.
• Firms need to be realistic about who their competition is. Your competitive landscape is the world, not just Toronto. And it is no longer necessary to pay Bay Street rates – many boutiques harness operational efficiencies and rent less-expensive office space, allowing them to offer high-end services at very competitive prices.
• Embed yourself in our organization, at various levels. Junior and senior lawyers need to have a good relationship with the client. Senior partners should not dominate the relationship.
• Secondments have been very creative solutions for adding value.
• Be our partner, and not just a third-party advisor.
• Please, do not surprise us with the bills.
• Everyone is competent, so the other things matter.
• Value = what you pay for and expect to get and it translates to results. While value added = strategic advice along the way and thinking as if you are a true partner of ours.

Examples of good communication

• Communicate on billings, especially when they are different from what the client is expecting.
• Let’s talk about the team that’s being put together to complete our work.  Explain why each lawyer is selected and understand what roles the members of the in-house team can play.
• Know what kind of communication is valued. For example, in-house is meeting and phone intense, not paper intense. So don’t write a 20 page memo that could have been a 5 minute phone call.
• Most important, if you’re going to spend time on something, ask me first!

Hiring legal counsel

• Clients don’t hire from a brochure or from the various law lists (those identify firms for us to consider, not individuals). Instead it’s networking, referrals and word of mouth.
• Be a stand up person:  likable, moral, then a good lawyer. “I won’t hire someone I wouldn’t have dinner with”.

On diversity

• We want our law firms to look like us. The face of in-house counsel is changing, and it’s getting more and more diverse.

In summary

Although the tone of this year’s panel was somewhat pessimistic, there were some rays of hope among the clouds.  While the panel members noted that they tend to tolerate deficient service only because the costs of switching law firms are so high, they also noted that so much more can be done to improve these important relationships.

In the end, the difference between a good and an indifferent lawyer-client relationship seems to come down to basic consideration and a personal understanding of the client’s needs. Howie Wong suggested taking the “country lawyer” approach and once a week reviewing all open files to see “if the client needs to hear from me.”  Av Maharaj noted that in times of crisis, he really values those lawyers that he can phone to ask simply “What do you think?” As Cheryl Foy noted in a conversation afterward, she and her colleagues do value their good relationships with outside counsel very highly, and as a result tend to keep working with those lawyers over the long term.