• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
1
The Wired GC Legal Top Ten for 2008
(a special year-end edition of 
Wired GC – Select
)
1. The budget will rule (and there's less to go around).
Despite legal industry surveys that appear to show increases in spending, budgetswill come under withering pressure in 2008. The GC will be called on the carpeton all major line items. The Financial Times saw this as well late last week, whenan editorial trenchantly described two delusions that persist at many professionalservices firms: "The first is the belief that the good times are going to last forever;the second, a tendency to fall for their own story: that what they provide isabsolutely crucial to their clients’ success and that their business models aretherefore invulnerable." As credit tightens and the global economy slows, there'sless need for major deal work, and a closer focus on everything else.
2. It’s time for the GC to play offense.
When the GC is staring across the table at the CFO and the CEO, you have toknow the numbers cold. But they are lagging indicators, and too much focus can’thelp but put one on the defensive. Once the GC staggers out of the final budgetmeeting, it’s time to do something. One place to start: a renewed emphasis onproviding legal support for major strategic initiatives, and documenting this work with a few clear metrics. That builds value, in a way all who matter can see. Andin the spirit of the waning college football season, I call that playing offense.
3. Litigation is revealed as a failure, not a strategy.
Ask any in-house counsel about their best experience in major litigation. It’srather similar to a game called “Name Your Favorite Root Canal.” Even whenyou win, you lose (money, time, opportunity costs). Enlightened lawyers on the
 
2
inside will increasingly explore ways to avoid litigation and resolve it quickly. Somuch major spending goes to litigation (or to its real manifestation, discovery),that having one matter not end up in the courts is equal to about twenty cost-saving items demanded by the CFO (see #1, above). But don’t take my word forit: the next time you’re at a major legal conference, walk through the exhibit halland see what most of the exhibitors are feeding on. Exactly.
4. Brave GCs try the Midwest as well as Mumbai.
There are an increasing number of companies trying offshore legal services fordiscrete projects. Many of these are ultimately sourced in India. Some alsoinvolve contract work stateside. However, when larger firms in NYC and LAboast partner billing rates in the $600/hr plus range, you don’t have to ratchetdown all the way to $50/hr in India to save. Some inside counsel could do noworse than throw a dart somewhere in a 750 mile radius of Gary, Indiana and senda project or two to Firm X in the top 10 in a given legal market (and even a few insmaller boutique firms with some due diligence). There are many good lawyers inthe $395/hr range. And they know how to make their own coffee.
5. The “billable hour” continues to bore.
I think the “billable hour” is like the weather—everyone talks about it, but no onedoes anything about it. I can remember discussions of alternative billing 20 yearsago, and fundamentally nothing has changed. The lesson for in-house counsel isthat more legal processes and work products have to be changed or streamlined.The lesson for outside counsel is to enjoy the party while it lasts, because everyGC has a breaking point on the budget. Clients pay by the month, not by the hour.For my part, I’m going to try to make the Wired GC BHF in 2008. That’s“Billable Hour Free” for the uninitiated.
6. But the starting salary is always news.
For some reason, while people seem to tire of talk about rates, they love to dishabout money. I recently saw a story that a few law firms are tiptoeing around therarified air of a $200,000/yr start for new associates. The truth be told, some arealready there with all-in first-year total comp. All I can say is that when law firmsmake news about paying baby lawyers what some clients pay C-level execs as abase, stand back. And see #1 and #4, above.
 
3
7. Half of legal marketing budgets are wasted (and the other 50% useless).
Because much of the legal press is focused on six-figure starting associate salariesand seven-figure profits-per-partner, legal marketing mavens will face an uphillclimb. Buying full-page vanity ads in glossy legal publications is easy for theagency and the firm, but essentially ignored by every GC I’ve talked with whenmaking a purchasing decision. And when you take a close look at most law firmweb sites or marketing brochures, you see little that’s of true interest to clients.
8. A few firms start firing Legal Marketers and promoting client service.
Clients don’t care about the firm, when it was founded, or where the partners wentto law school. They want to hear from other managing counsel about firms whodid actual work well for a matter exactly like they have right now. Some call it“referral marketing” although it’s not really marketing at all. It’s doing a good job, communicating well, and knowing what the client is really paying for. Alllarge law firms have smart people in sharp clothes that do good work. So what’sthe difference? (If you’re in a firm, I know, but that will cost you…).
9. The Client Partner is the true economic unit.
The real value in law firms is a rare breed: the partner who gets and keeps clients,attracts the best lawyers to the team, and develops them in the process. For thefirms that think it’s the “brand” or the longstanding “reputation” or the “globalplatform,” I have a simple test. See how many major matters come into your firmthrough your main reception desk. Here’s the mythical conversation: “Hello,BigLaw Firm, yes, this is Janet GC of MegaCorp and I need a securities lawyer.Who? Doesn’t matter, anyone will do. Just connect me, please.”Right…Which leads to #10, which could be sub-titled: “Why bother with a firm when youcan cherry-pick a partner or two?”
10. More law firm mergers (and less that make long-term sense).
There have been a few mergers announced in late 2007 that will (potentially) closein 2008. One, involving the Husch and Blackwell firms, has a distinct Midwestfeel; the other, involving Mayer, Brown and Hong Kong, more global. I wishthese firms well, but as we saw in number 9, law firms are no longer the major
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...