A recent article in The American Lawyer shares research by UK-based research firm Acritas about the main reasons that clients fire outside counsel. Major clients cited cost (21%), bad advice or lack of expertise (18%), project completion (16%), poor service (15%), and loss of a key partner (11%) as primary factors in their decisions. Given the additional complexities of international practice, how do you reduce the chances that any of these will happen to you?
As noted above, high cost was the primary reason that corporate counsel fired outside firms. In the international arena, the Magic Circle and other large global firms are known for charging some of the highest hourly rates around. One way to combat high hourly rates is, of course, to adopt alternative billing structures that focus on value rather than hourly billing. For example, the In-House ACCess blog describes how footwear company Wolverine Worldwide and outside counsel Seyfarth Shaw are negotiating to work out a value-based relationship, and the metrics being proposed by each side. For example, in-house counsel proposed a “Trademark Risk Rate” which included total dollars spent on trademark defense divided by the number of trademarks defended. Outside counsel, however, proposed a different set of metrics including Overall Satisfaction and Timeliness of Communication. As the post notes, the parties are in the midst of working out the metrics. However, their efforts show a willingness to create alternative fee structures up front.
As noted in the first paragraph, poor service is another common reason that in-house counsel fire outside firms. However, sometimes differences in cultural expectations can create an unintended impression of “poor service”. Do you know each client’s cultural expectations–and are you meeting them? For example, what are your client’s expectations about work product timing? Is their sense of time fluid, or do they expect advance warning and justification of any schedule changes? Are your clients willing to work directly with lower-level attorneys or do they expect to interface with senior partners to feel that they are receiving good service? (See also Effective Cross-cultural Lawyering in this blog.)
As the Acritas study notes, clients also leave when a firm lacks the right kind of expertise or delivers bad legal advice. Client-attorney cultural misunderstandings, as well as separation by time zones and distance, increase the chance that clients’ expectations won’t be fully met. So, when dealing with a potential client, spend extra time clarifying what kind of legal expertise they are seeking and honestly assess whether you can match it. If you can’t meet their needs, then refer the matter to another trusted lawyer. It is far better for clients to get the legal expertise that they desire rather than to damage your brand by not meeting expectations.
Finally, plan ahead for transitions. When a client’s project ends or the client’s primary lawyer contact leaves your firm, be ready to maintain and nourish the client relationship. This can take extra effort across the miles, but try to maintain open lines of communication with all former clients. Sending articles of interest with handwritten notes is an easy but personal way to show continued interest. Of course, personal visits anytime that you are in the client’s city help to maintain a warm relationship, too.
Implementing these tips will help decrease the chances that you will get fired, despite distance across the miles and time zones.