242 SUPERLAWYERS.COM A TTORNE YS SELEC TED TO SUPER LA WYERS WERE CHOSEN IN ACCORDANCE WITH THE PROCESS ON PAGE 8.
times when you need to have constant conversations.” But more
than anything, he says, “They have to know who we are, how we
conduct things, and our philosophy and approach to matters.”
Developing that sixth sense takes time.
“Effective communication and transparency comes from
understanding as much as we can about our client’s business. The
most important thing is understanding their business and their
business objectives,” says Segall. “What are their business goals
at a high level? Trust and understanding are the key factors. Trust
comes with time and familiarity.”
It helps if the outside counsel can walk the halls of their client’s
headquarters and blend in.
“We’re looking for culture sensitivity,” says Turner. “That is,
counsel that aligns with our values and culture.”
While Best Buy doesn’t put a premium on culture fit, per se, it
does put a premium on relationship fit. “If your gut tells you that
a particular lawyer or firm won’t interact well with employees, the
board of directors or managers, it’s not likely to be a successful
relationship,” Nelsen says.
It’s healthy to rotate counsel to ensure diversity, says Page,
but once you find counsel who fit all the specs, you build that
relationship. “You’ve invested the time to take them on company
tours,” Page says. “They understand how you make money, lose
money, invest. You don’t want to keep paying for new counsel.”
‘BRING EFFICIENCIES OR ABSORB IT’
Then there’s the money. GCs are feeling increasing pressure
from management to select counsel and firms that are affordable,
and to negotiate alternative billing structures.
“We’re seeing in-house counsel demand more flat fees for
projects,” says Tenenbaum. “In the past, you billed by the hour,
whereas clients these days are existing on [arrangements like]
flat fee or cap, or a monthly retainer that covers all the legal
services you’re going to provide. That works for us in part because
we’re efficient.”
Segall has a similar perspective. “For all the major law firms,
it’s a fairly normal practice to do alternative billing arrangements.
We’re as creative as can be when thinking of these different kinds
of arrangements. Our firm has dedicated a full-time staff person
who focuses on billing arrangements with clients.”
Pay structure depends on the client and the nature of the
project. For example, says Maritczak, “Cobalt grew a lot in a short
period of time, and sophisticated employee issues have arisen. So
we pay outside counsel a flat fee to answer any questions and help
train our director of HR on sophisticated issues.”
The most important thing is having transparent discussions up
front to ensure that there are no surprises. “We’ve tried other fee
arrangements, and what continues to work is a clear engagement
strategy with upfront discussion on budgets, including what’s to be
spent on each stage,” says Page. “We have said, ‘This is what we’ll
spend on this matter and that’s it.’ We tell firms: Bring efficiencies or
absorb it. If anyone has to do something that’s inefficient, it is free.
Great outside counsel make their work successful and profitable.”
Page also says that he stays clear of large firms to save on
costs: “Mid-tier firms, in terms of annual revenue and size, are
nowhere near mid-tier in skill set. Whatever the price point
is, you want value. If there’s a matter on which you’re looking
for advice, say a minor real estate question, you don’t need
someone for $1,000 an hour doing the work when you could
have a capable associate do the work. But some corporations
are less concerned about that.”
Even though GCs are increasingly leaning toward alternative
fee arrangements to appease management, at the end of the
day, the costs may pan out the same. “Most GCs grew up in the
private sector,” says Segall. “And they understand how to do the
multiplication. They understand the business drivers that affect
our ability to price in different ways.”
Turner sums up her experience this way: “You get what you pay
for in a competitive environment.”
‘THE ANALYTICS … WILL DISRUPT THE LEGAL PROFESSION’
But what does the data say? Perhaps that transformative
innovation is not far off. “Companies are getting back to the
basics of establishing the right teams,” says Page. “Oftentimes
the analytics are not studied here. They’re hiring actuaries and
back office functions [to study analytics]. Everybody is looking into
the data. All things being equal, why did something initially cost
$200,000 and half a million dollars this time? We’re looking for
predictability in the costs associated with outcomes.”
With the help of sophisticated tools, certain metrics come to
light. “Analytics have always been with us but not incorporated
into our evaluative processes or used to determine value and
predictability,” Page continues. “With Watson from IBM and other
intelligent tools and systems, I sense there will be a foot race on
better processes, better analysis and better prediction of outcomes
leading to better lawyering and efficiencies. The billable hour or
profits per partner are not [the most] efficient or the sole metrics,
or even the best measures of success. The analytics will help build
tools, processes and even thinking that eventually will disrupt the
legal profession.”
Maritczak says she has used analytics to measure the
effectiveness of her internal and outside counsel teams, but that
larger companies with bigger budgets and resources are more often
the ones who use data to guide their business decisions.
Ultimately, companies want predictability, transparency and
trust—all of which are the cornerstone of any great relationship.
“My own relationships with the clients I serve end up growing at a
personal level just as anything,” says Segall. “It’s an ageless thing.”
