acc’s law firm project: re-connecting costs to value michael roster former chairman of the board,...
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ACC’s Law Firm Project:Re-Connecting Costs to Value
ACC’s Law Firm Project:Re-Connecting Costs to Value
Michael RosterFormer Chairman of the Board, ACC
Retired CLO and Former Law Firm Managing Partner
Susan HackettSenior Vice President and General Counsel
Association of Corporate Counsel (ACC)
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ACC’s Law Firm ProjectACC’s Law Firm Project
The Premise / The Proposition
What we envision and how it would work
A roll-out in October of 2008 at ACC’s Annual Meeting in Seattle
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ACC’s Law Firm ProjectACC’s Law Firm ProjectHow did we come to this place? Will corporate counsel
support this effort? How will law firms respond?
Everyone complains about the billable hour: firms, practice groups, and in-house departments want changeTurnover, balance of life and professional dissatisfactionRevenue per partner/profitability at all time highs, while in-house departments getting leaner and more efficientLaw firm rates/costs continue to rise, with no readily apparent increase in value or serviceAssociate and partner incomes / media coverage of them
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ACC’s Law Firm ProjectACC’s Law Firm ProjectWhat does history tell us?Retentions used to be simple - one page bills and law firms’ costs and strategies unquestionedClients invest in in-house departments: part of their function is to better manage the spendClients begin to demand “detail” from firms: they look at efficiencies and comparativesThe rise of alternative legal services providers: legal services increasingly are “commoditized”Clients share responsibility with firms for the billable hour system they now complain about
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ACC’s Law Firm ProjectACC’s Law Firm ProjectLaw firms made billable hours into a business model Firms became focused on profit and less aligned with professionalism or client serviceThe views of the General Counsel: when and why are law firm services not aligned with client needs or the value provided?The General Counsel increasingly is asked by senior management to control costs, reconsider the purchasing methodology and/or bring more work in-house
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ACC’s Law Firm ProjectACC’s Law Firm ProjectOnce “average profits per partner” becomes the target,
law firm structures and operations get distorted:How “average profits per partner” gets managedHow associates are trained (or not) How associates are retained (or not)How clients are served (or not)How firms compete for clients, talent, reputationHow the business model functions
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ACC’s Law Firm ProjectACC’s Law Firm ProjectThe movement toward mega firms
The challenges for medium and smaller firms, as well as their competitive advantages
The alienation of talent and loyalty and loss of personal satisfaction
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ACC’s Law Firm ProjectACC’s Law Firm ProjectAudience Discussion and Questions:
Have we identified the right problems?
Have we articulated an approach toward a solution?
Who stands to gain and who stands to lose?
How can your firms consider these developments and take advantage of them?
How will the marketplace react?
Thank you for your time and attention.…Thank you for your time and attention.…
Susan Hackett: [email protected]
202/293-4103, ext. 318