Going In-House Advice and General Counsel
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- Every client has a brand and they’re very sensitive to that brand and the better you know that brand, the more a part of that brand you are, the more help you’re going to be to that brand in achieving success and minimizing risk.
- A big part today in being a general counsel is managing a large group of people and managing a big budget and those are not skill sets that many partners in law firms ever have the opportunity to develop.
- I think in terms of [going in-house], there is a certain amount of serendipity. You need to create opportunities.
- Increasingly we see more and more general counsels who face these very challenging, very lonely decisions and they don’t always come out at the right end of the tunnel.
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Hello listeners, this is Chris Batz, your host of the Law Firm Leadership podcast. Today, I have two announcements. First, from now on the transcript of this audio will be available in PDF and downloadable on my site. I realize that some of you would prefer to read rather than listen to the audio. Note the audio will be available on your device the soonest and the PDF will be available hopefully within about seven business days after that. Also know that if you are on my emailing list you will receive this PDF automatically when I announce the episode is live.
My second announcement is my guest today. I’m interviewing a general counsel of a public company. This interview is exceptionally long and full of great content, so I’ll be splitting it up into two equal parts: episode eight and episode nine. Episode eight will be about this guest’s experience as a general counsel at three major corporations and being in private practice at three major law firms. Episode nine will be about his personal experiences with and research about corporate crisis and the general counsel roles before, during and after. There are some really incredible insights and stories that you will not want to miss.
As many of you know, we interview corporate defense law firm leaders, partners and legal consultants, and now general counsels. You’re listening to Episode Eight of the Law Firm Leadership podcast.
Broadcasting from Kansas City, this is the Law Firm Leadership podcast. In each episode you will receive actionable ideas and hear personal leadership stories of the top corporate defense law firms from around the United States. Enjoy a front row seat with law firm leaders, their partners and legal consultants as we discuss life and leadership.
Chris: Welcome to the Law Firm Leadership podcast, I’m your host, Chris Batz with The Lion Group.
Today I have the pleasure of speaking with Bob Bostrom of Abercrombie & Fitch. Bob serves as senior vice president, general counsel, corporate secretary of the retail clothing company Abercrombie & Fitch. Bob also served as the executive vice president general counsel at Freddie Mac during and after the financial crisis and at NatWest Bancorp. He also served as partner at three global law firms, but your longest tenure was at Winston Strawn, where you served as the managing partner in New York and executive committee member, and the head of Financial Institutions Practice Group. You were named 2016 Distinguished General Counsel by the New York Stock Exchange Governance Services, 2015 General Counsel of the Year by the International Law Office and Association of the Corporate Counsel and one of the most influential in-house counsel in Washington by the National Law Journal. You hold a JD from Boston College and a master’s degree from Columbia University.
Welcome, Bob to the Law Firm Leadership podcast. It’s wonderful to have you on the show.
Bob: Thank you, Chris and it’s a pleasure to be with you.
How Has the Role of General Counsel Changed Over the Past 20 Years
Chris: So Bob, before we started recording and prior to our conversation, you had mentioned some really pertinent subjects that I believe our listeners are going to really want to hear your story. And the first thing we want to just talk about as how has the role of what you’ve done over 20 years changed? And you had mentioned that you were general counsel for three different organizations and entities companies and you’ve been in big law at three different law firms. Please tell the listeners how things have changed over time.
Bob: Well, Chris, I think if you look back to the mid-1990s when I had my first general counsel position at NatWest Bancorp, the role of the general counsel was just emerging from truly an in-house lawyer, who had little role in the business and was really not looked to or thought of as a business advisor or counselor. And certainly the role that I played in that first general counsel role was a little more dynamic than that because when I went to NatWest Bancorp, the institution was subject to several consent orders from the Office of the Comptroller of the Currency and memorandum of understanding from the Federal Reserve system. So the role there was clearly more than just being a lawyer, but was really to help advise the bank holding company solve the problems identified in those supervisory orders and help lead the company forward.
But as a general matter in that era, the role of general counsels was still relatively undefined and relatively focused on being a lawyer and not contributing to other aspects of the business. After I left NatWest following an acquisition and went back to private practice, I think the trend began for, and obviously Ben Heineman at GE was kind of the model for this, but the trend began to change pretty significantly where increasingly partners from major law firms found a role as a general counsel to be very attractive.
Companies began adding duties and responsibilities to the pure general counsel role ranging from chief compliance officer or having compliance report to the general counsel to chief administrative officer roles, head of public policy or government relations, a whole bunch of additional roles and responsibilities were tacked on to the lawyer role. And simultaneously, lawyers, general counsels began to be included on the leadership committees, or executive leadership committees, or senior leadership teams, whatever the designation was in different companies and clearly the role began to evolve to a much more significant role in the C-suite. So that when I went to Freddie Mac in 2006, it was a much broader role than originally I had at NatWest in 1993, a very significant role on enterprise risk management committee, on the reputational risk committee, involved significantly with government relations and external relations, a role on the six-person senior leadership team and a much different set of asks and questions and responsibilities than just those functional responsibilities and areas. And through the conservatorship and financial crisis, that role expanded even more dramatically.
When I left Freddie Mac and went back to private practice that trend had very much continued. And as I got to Abercrombie & Fitch to help lead the company through a proxy fight in early 2014, the role had evolved even further and had clearly, where the role in large Fortune 500 companies, and in financial institutions, and heavily regulated industries was very significant, I think in the retail area and a lot of other less noticeably heavy regulated areas, the role of the general counsel was still more defined and restricted. But certainly by 2014, even in the retail sector and other areas where maybe historically the role of general counsel had been more traditional, the layering of additional roles and responsibilities, the role in the C-suite, the opportunity and indeed mandate to be a business counselor and advisor where your views were respected from the point of view of the business as well as your functional role as a lawyer had dramatically changed.
And I think if you look through the 20 or 30 years covered by that in other contexts, it’s really very clear that general counsels’ role has evolved quite significantly.
The size and scope of in-house legal departments has changed considerably. And although it varies somewhat from company to company, a clear and decided trend toward larger in-house departments doing more work, functioning more as an in-house law firm, keeping more of the highly desirable work internal and not just doing the commodity work inside, but rather doing the good substantive, interesting, exciting legal work inside. And the shifting relationship between the general counsel and the board as increasingly the board comes to look at the general counsel, again, not just as a lawyer-in-the-box, but as a counselor and advisor and a much stronger relationship and role in advising the board than I think had historically been the case. So I think that’s a summary of where I see the changes having occurred.
Chris: And that’s a substantial over, I mean, what could be a short period of time. You had mentioned one general counsel who might have helped lead the charge. Was it a small few that really helped the public companies realize the value of what you bring?
Bob: I think initially it was, Chris. And certainly the attention, and notoriety, and knowledge of the role that a meaningful, significant general counsel could play in a company, you know, needed some publicity if you will. It needed public awareness. It needed board awareness. It needed CEO awareness. And I think that, you know, Ben Heineman was the beginning of that and obviously GE was a, Jack Welch was a trendsetter in recognizing that and doing it. And so I think drawing attention to that and giving it more public access, public notoriety was a significant factor in the transition of the role.
Chris: Did you feel like, I mean you were kind of on a wave of a real evolution and importance that’s been brought to the role, did you have to explain yourself to step into those? Were you suggesting those new spaces that you could speak in to? I mean who was fighting for you to give you those opportunities?
How Did the New Opportunities & Responsibilities for Your Role Present Themselves?
Bob: Well, you know, it’s a great question and it’s one that gets asked a lot these days, whether you have to wait to be invited or if you can invite yourself. And a lot of it is obviously a personality issue of the individual GC, the CEO and the personality and make up and complexion of the board, both the individual directors as well as the chairman or lead director if there is one.
But I think even more significantly there is a certain amount of opportunistic element to that invitation. And I describe it really the difference between the clear day and the stormy day. When the company is in a crisis as NatWest was when I went there in the ’80s and Freddie Mac was when I went there in the mid-2000, and as Abercrombie was about to be with the proxy fight in 2014, it’s easy to be invited into the room, it’s easy to be sought after for your view and counsel because that’s what the lawyer’s there for, right? Lawyers live for the crisis. That’s when even if they’re not invited they become really important to a successful outcome of a resolution of a problem.
The Clear Day and The Stormy Day
And so on the stormy day, it’s easy to be at the table, to have your views sought after, not just for legal, but for counsel and advice as to how to solve the problem. On a clear day, however, you need to work harder to be invited. You have to work hard to be a business partner. You have to take the time to learn and understand the business, so you know it as well as the business people do. You can offer not only meaningful advice and counsel on non-legal issues, but when you’re giving legal advice, you give that legal advice from the perspective of knowing the business, knowing what your business partners are thinking and knowing what their reaction is going to be. The challenge in being a persuasive counselor on the clear day is much, much different than on the stormy day, so I think not only is it a function of transition over time, but it’s also having the opportunity to be invited or have to invite yourself.
Chris: Yeah, that makes a lot of sense. Now, Bob, you’ve also been in private practice. I notice you spent numerous years over at Winston Strawn, what was the draw from private practice to in-house and vice versa? I notice you went back.
The Draw to Private Practice and In-House
Bob: Yeah. When I look at the difference between having had the opportunity to practice in large law firms as well as being in in-house and general counsel roles, they’re very, very different in many ways and very much the same in others. I think the biggest difference though is when you’re in-house you tend to be a mile deep and an inch wide, whereas when you’re in private practice, unless you’re an extremely concentrated, focused practitioner, which is increasingly happening, you do tend to be, and even a practitioner who’s focused will represent multiple clients in that same space, so your experience is going to be a mile wide and maybe only six-inches deep because you’re not living with the client, you’re not living with the business.
And so one of the challenges in being inside is to make sure that you provide yourself with the opportunity to have that broader scope of experience and opportunity so that you can bring the market practice and what’s going on in the market to your job and not just be limited by the bubble you’re living in every day and working in. At the same time though, living and working in that bubble, gives you that mile-deep perspective on your client that you don’t otherwise get from being outside. So I’ve kind of enjoyed both sides of that equation.
I’ve also been fortunate in that my experience in private practice has kind of found me more often that not, almost functioning in an outside general counsel role to a client that maybe didn’t have one. So I’ve had kind of the best of both worlds when I’ve been in private practice oftentimes to have a much deeper, keener relationship with the client that isn’t one transaction, or a piece of litigation deep, or only litigation deep, but rather managing that client relationship with the firm and getting the relevant requisite help from within the firm to service the client. And really achieving a very broad understanding of what the client is doing, how it’s doing it, what the interrelationship is between corporate work, real estate work, litigation, labor employment, what a company’s DNA is all about in terms of settling or fighting, what are those, you know, key DNA issues and areas of importance to a client, which really do vary quite significantly.
So I think that they’re very different positions. They have some real strong similarities, but I’ve always in the end preferred to be a general counsel inside or having the luxury of being a relationship manager general counsel outside so that I have the opportunity to learn as much about the client, as much about the business, and as much about the DNA of the client so that you can really be a persuasive and trusted advisor and counselor based upon your knowledge and ability to understand and think and appreciate the brand of your client.
Every client has a brand and they’re very sensitive to that brand and the better you know that brand, the more a part of that brand you are, the more help you’re going to be to that brand in achieving success and minimizing risk.
Chris: Bob, I don’t know the answer to this and it will be fascinating to hear your feedback. Does in-house being in the corporate legal department, does that better prepare you to be a private practice attorney or would a private practice attorney better prepare you to be in-house? Is there any reflection on that do you think?
The Challenges of Transitioning from Law Firm to In-House
Bob: Yeah, I think one of the most difficult transitions for a lawyer coming out of a law firm is to transition to being a general counsel in-house. It is really so much different, especially today when the expectations are so much extra legal and not just legal.
Lawyers, and a big part today in being a general counsel is managing a large group of people and managing a big budget and those are not skill sets that many partners in law firms ever have the opportunity to develop. So I think first and foremost is leadership training, leadership skills, management training, management skills, are much more valuable to bring back to a law firm because they become part of your DNA when you’re in a large corporate environment. Leadership, management, budget, all those responsibilities and disciplines that you don’t really have the opportunity to learn in a law firm unless you’re in a management position.
I mean certainly when I went back to Winston & Strawn having been at NatWest, it was that learning, that knowledge, that experience that led me to become the managing partner of the New York office. And I think increasingly in today’s private practice environment you have more and more full-time practicing managers and leaders who don’t try and run a 2,000-hour-a-year practice or a ten-million-dollar-a-year practice and manage a large mutli-discipline, mutli-jurisdictional law firm. The two really don’t go hand-in-hand well together.
And I think also just the nature and role of how you advise shifts dramatically from outside to inside. You know, when you’re on the outside, there’s always, some lawyers are brilliant, creative and they get it. And they’re the kind of lawyers you want to hire as a general counsel. But I think the vast majority of lawyers that I’ve dealt with from inside tend to be very, I’ll use a pejorative expression, but I don’t mean to sound pejorative but conveys the concept, they tend to be very malpractice prone. They give advice that’s malpractice free.
So when you ask lawyers for probability of success, a lot of lawyers you’ve got to really twist them pretty hard to get an answer. And I say to them all the time, I say, “I’m not going to sue you. I’m not going to hold you accountable for giving me your best guess as to probability, but it helps me assess what I want to do because you know that matter better than I do and I have to weigh my own sets so of variables and other things that are critical to the decision-making process, but you’ve got to give me your best sense of probability.” And a lot of lawyers don’t like to do that. They give you that, “Well, it could be this, it could be that,” kind of response.
So I think that that’s another part of coming inside where business people want a quick short answer. They don’t want five pages or five hours of conversation without an answer. When a board’s making a hard decision, it expects you, the lawyer, to provide them with some sense of probability, your best sense, your best guess, your best estimate and you’ve got to be willing to put that information out there. And it’s a skillset I think that is forced upon you in private practice, I mean, forced upon you as a general counsel and only forced upon you in private practice if you have a client that pushes you for it, otherwise there’s really that inclination to give less than succinct, sharp, clear advice because you want to protect yourself if you’re proved not to be right.
And so I think those are some of the balancing of skills and experience in private practice that don’t translate well into being a general counsel. And I think that balance going in reverse, the skills and experience you gain being in-house are probably much more valuable going back into a law firm than vice versa.
Chris: Yeah, that’s insightful and I appreciate you sharing that. I know listeners will be able to use that. I’m flooded by people both in private practice and also still in in-house who want to figure how to get in-house, how to stay in-house, how to make that transition as you kind of described with the skills. How would a private practice attorney approach or think about or should they consider? What’s your advice to them if they want to go in-house?
Advice for Going In-House
Bob: I think it’s a very challenging task these days because, as you say, so many people want to do it. And it kind of goes back to the earlier theme of what’s changed from the 1990s to the 2000 teens and that is that it has become very desirable because as that role has broadened and become so incredibly interesting, and fun, and significant, and challenging, so to have the number of people who want to have that kind of a job.
I think it’s also coincident with really the degradation of the big law firm experience. As big law gets much more business focused, much more numbers oriented, and clients become much more challenging to deal with, and business much more difficult to get, has resulted in a supply and demand that’s flipped around a lot which has made it much more challenging.
I think in terms of getting there, there is a certain amount of serendipity. You need to create opportunities.
You need to find opportunities because there just aren’t that many of them. I like to think about, you know, general counsel opportunities coming and maybe third go to the deputy or somebody else in-house, so you never get a shot at them, maybe a third get out to executive recruiters, and another third, you know, tend to go to, you know, the primary outside counsel or, you know, a close personal contact of the board or management that has provided some extraordinary, high-quality of service and gained their trust and confidence. So not only has the supply and demand changed, but there’s only a third of those opportunities that really get out to a more public search process.
And I think that one of the key things for lawyers coming out of a law firm is their skillsets may have become too focused in one particular area, whereas I think to be a general counsel, you need to be able to manage litigation, you’ve got to understand and be able to manage corporate transactions, you’ve got to know about labor and employment. You need to be very well versed at a meaningful level in lots of different disciplines and it’s hard to get that if you’re a litigator, or if you are a corporate M&A person, or if you are a real estate partner.
So a lot of times these searches, sometimes unique situations, companies involved in significant DOJ investigations, they may want to get a former Assistant US attorney or US attorney because they feel they need at the most critically pressing skillset that they can, they need that time is that experience in Washington in a prosecutorial environment. But I think those are more the exception to the rule and they’re obviously very opportunistic. A company is in trouble, it decides that’s what it wants to look to get help.
So I think the challenge in getting there is to have a broad-based, broad range of skill sets, yet be able to brand yourself as having the ability also to manage and lead people.
And so the configuration of experience and skillsets that a lot of general counsel specifications will talk about don’t blend well with a law firm partner. Now, if it’s a managing partner of a firm, or an office where a practitioner in a firm, you know, was a well-regarded corporate attorney, litigation, whatever the case may be, or, you know, for me, I was fortunate enough, as I said, to almost be an inside general counsel where I was managing a variety of different types of matters for a client and kind of acquired both in the time at NatWest and the first general counsel role where I was brought in as the, you know, bank regulatory financial services savior of a crisis in that space and learned all that other stuff while I was there, brought it back to private practice on the management side, but also had the good fortune to be, as I say, inside general counsel as an outside client, and acquired a much broader range of substantive knowledge and skillsets than I had before.
So I think if somebody really wants to do that, you need to figure out a way to broaden yourself, to get yourself some management leadership exposure. Leading a team of people is not the easiest thing for many people and getting the experience and skillsets to do that is in and of itself a challenge. So getting, you know, leadership role in your law firm, a management role in your law firm if you’re coming out of a firm, making sure you made efforts to develop some client relationships to work with other substantive, functional skillset areas in the firm so you broaden your knowledge base a little bit. And then truly being a trusted advisor to a client is probably the best way to do it, is to be that personal valued, trusted advisor and get hired by the client that knows you so well.
Chris: Yeah, that’s some excellent advice. I really appreciate it because it’s frank. You’re on that side. You see it. You’ve been back and forth and you have the perspective of the evolution of how things have changed. Yeah, I know the listeners will really appreciate that, Bob.
Bob, it’s interesting and you brought it up with the almost just kind of ravenous desire to go in-house and to make the leap. I’ve seen that in public accounting as well. I’ve seen it in other industries where they are in private practice and they want to make the leap and, you know, the dark side is private practice and the light is the equivalent of heaven and we need to go in-house. And yet, I think there’s this, always this greener grass kind of perception of in-house. I’d love to ask you if you have insights on how to dispel maybe some of the myths of in-house. I know you’ve done plenty of hiring yourself, what have you found that might be misunderstandings or misconstrued perceptions of what in-house life is like?
The Challenges of Being a General Counsel
Bob: I think that until you’ve done it, it’s hard to appreciate and conceptualize what a difficult, lonely job being a general counsel can be. You have a board of directors that’s really your fundamental and primary client, but you have a CEO and a management team who think you’re their lawyer and then there’s the corporation, which is really acting through the board of directors. And you need to balance how and when you advise your client, the corporation acting through the board, and how you manage that relationship with the CEO, which on a day-to-day basis is your boss and the other members of the executive leadership team who also view you as their lawyer.
And, you know, on a clear day those potential conflicts are never realized. But on a stormy day when there’s executive misbehavior, or your CEO does something wrong, or the chairman of the board reaches out and discloses, you know, very sensitive issues about a member of the executive management team or the CEO, that job becomes very, very lonely and very challenging about what are your ethical responsibilities. If you become aware of certain types of executive misconduct, your path is clear, but it’s very difficult and fraught with ethical dilemmas.
And, you know, increasingly we see more and more general counsels who face these very challenging, very lonely decisions and they don’t always come out at the right end of the tunnel.
And so I think one of the big challenges and areas of being a general counsel that is somewhat misunderstood and neglected is just that, it can be a very lonely job because when those things happen, you’ve got no one to go to.
And I used to describe to people that I like to have my own personal crisis management plan. I like to have a lawyer outside of the company who doesn’t represent the company, whose judgment I trust impeccably, and that’s your sanity check. If your CEO is saying to you that your CFO has done something wrong, but no harm, no foul, let’s not worry about it. Let’s just move on. We don’t really have to investigate. It’s a de minimis, no harm, no foul kind of situation. You need to stay very sensitized to the realities of what that’s all about. And in the face of your CEO saying, “Don’t worry about it. We’re not going to do anything,” and after a conversation you can’t convince him or her otherwise, you need to do a sanity check. And the problem is that you can’t just call your friend, you can’t call another general counsel because you’ve got attorney-client privilege issues. So you really want to have your, a counsel, a lawyer that you can go to in those kinds of circumstances where you haven’t breached the attorney-client privilege, but you can do a sanity check and get a perspective, and a judgment, and a view as to whether you’re off the reservation or if you’re where you need to be and should.
I think another challenge of being a general counsel that folks may not fully appreciate the challenge of is you can’t be a cop. And you have to become, and the challenge is to become that persuasive, trusted advisor. And there’s a great book by Norm Veasey out there, I believe it’s called The General Counsel as Persuasive Counselor, where he talks about how you do that and the importance of doing it and doing the right thing and being conscious of the corporation, at the same time understanding the business. And your ability to say, “This is why I don’t think we should do this as opposed to no, we can’t do this.”
And I distinguish that from, you know, the old mentality, which still you still hear sometimes but much less so. And I remember when I was a summer associate in law school and I was part of a large group being entertained by a large Fortune 50 company for a summer associate position between second and third years. And there was a big dinner one night and the 20 or 30 folks that were out being wined and dined and interviewed were there. And the general counsel got up and basically said “We want can-do lawyers. We don’t want to know why we can’t do something; we want to know how we can do it.” And while I think that’s critically important swing thought to keep in mind these days, given the role of the general counsel and the perception of the regulators of the general counsel as a gate keeper, that old notion of doing whatever it took to get it done, figuring out a way to get it done, has a whole lot of guiderails around it today that maybe weren’t quite as prominent 25 – 30 years ago.
And that’s another real challenge and I think people coming in from the outside don’t fully appreciate. You can’t dictate by organizational hierarchy; you have to manage by being that persuasive trusted counselor. Now there will be those times when something is so black letter law illegal that you’ve got no choice but to be the cop, but 99% of the time if you can be effective by persuading and convincing as opposed to demanding and dictating, then you’ll be much more effective as a general counsel. But I think those are some of the real pitfalls and circumstances and situations that unless you’ve been a general counsel and kind of been through some of those experiences it’s hard to really fully appreciate what it’s like.
Chris: The role of being general counsel and, again, you’ve seen both sides, Bob, of private practice and the relationship of how private practice attorneys relate to their clients and then you’ve seen the other side where you’re receiving outside counsel help, I imagine you did with the proxy fight as well as other places you’ve been. I want to just kind of talk about what has happened over the 20 years or what even now specifically even forward looking, what are general counsels looking for in relationship with their outside counsel?
Expectations of Outside Counsel and General Counsels Looking for
Bob: Well, I think a couple of the biggest areas of change have been while cost has always been an issue; it has become a major issue today. I think much more significant, certainly I feel today, much more so than I felt it 25 years ago. And so the pressure to undertake cost-reduction efforts, much more pressure on managing outside counsel fees, has really become a big part of a general counsel’s job. And that obviously there’s an inherent conflict between zealously representing your client and cutting 25% out of your budget. And I think that on the cost side, you know, there’s the usual litany of alternative fee arrangements, retainers, fixed costs, discounts, a whole variety of things that have emerged and developed and that law firms are increasingly willing to consider and put in place. And so there’s clearly been a transition there.
I guess I’ve always been a bit of an outlier in that I think it has to be a true partnership. And what I think law firms have to recognize and what general counsels have to recognize is that, you know, for the law firm to be effective it has to have a reasonable rate of return. Companies always are looking for ROI, return on investment, and a rate of return. And likewise law firms won’t survive if they don’t achieve the same thing for themselves. So when you’re squeezing your law firm and negotiating for cost cuts, I think there has to be a recognition in the same way that you’re partnering with your business partners in the company, you need to partner with your law firms and obviously cost is one of those big spaces.
Another area where there’s been a tremendous shift from the ‘90s to today is the focus on diversity. And it’s a meaningful, tangible, critically important transition that general counsels are increasingly, although, you know, when you look at the statistics it’s had a much less significant effect on law firms than you would have thought over time, but nonetheless, general counsels are increasingly and aggressively pushing their outside legal counsel to provide a diverse group of lawyers working on their matters and to have a diverse group of lawyers in that law firm. And that gets to be very challenging for a variety of different reasons, but nonetheless it is part of that partner relationship.
And when your outside firms that you really trust and respect and partner with well struggle with diversity, you need to help them. You need to help them recruit. You need to give them positive incentives to provide lawyers of diverse backgrounds with relationship roles in the firm, with opportunities to network, with opportunities to be client-relationship managers. It’s amazing how much of a catalyst clients can be, not just to hire six more lawyers of diverse backgrounds, but also to provide lawyers with diverse backgrounds more opportunity within the firm to manage significant client relationships, to handle more significant matters for more significant clients, and to engage in a variety of efforts to retain them and make them valuable contributing members of a law firm so that they can serve as role models and bring in the next circle of lawyers of diverse backgrounds because that’s how it happens. It’s not going to be a one-man or one-woman show. It requires a lot of people to effect change. But that’s another huge change that’s occurred from the early ‘90s to today and I think it’s been a very important and significant transition.
The other area is the importance of partnering and part of this is fee arrangements, but part of it is having a new way of managing a client relationship. And what I personally like to have at a firm where we, and obviously there’s a strong desire at most general counsel levels now to try and consolidate more work to a smaller number of firms. You can effect better cost-cutting measures. You can manage that relationship easier and better. But in the end you don’t want to manage ten relationships with one law firm. You want a client-relationship partner who’s kind of a go-to person, both to find the right lawyers within the firm and the best lawyers within the firm to work on your matters, but also if there’s problems with a partner or area of practice within the firm, you have one place to go to where you’re going to get an objective, sensible and realistic solution to the problem and not have to manage it on your own.
And then lastly that client-relationship partner becomes that key business partner who learned, understands the DNA of the company and the brand of the company and can help to teach and train the lawyers within the firm working on matters for that client what the DNA of that client is, risk adverse or not risk adverse, what is your risk tolerance, what is your risk management profile, how aggressive do you want to be in certain areas and not in certain areas so that every time you’re handing a matter you’re not retraining the lawyer on it, but that lawyer understands that there’s a client relationship team that understands the client’s DNA, that understands the client’s needs, that understands the client’s preferences. And I don’t think that was the case 25 years ago when business was much more taken for granted. And it was a “We’ve always gone to Jones, Jones and Jones; we’re going to keep going to Jones, Jones and Jones,” and that simply is not the case today.
Chris: Bob there’s a, as I’m sure you know, there’s lots of disruptive forces affecting the legal industry and the law firm world, technology being one of them. How have you seen that in your practice at Abercrombie? Do you see outside counsel using that in some way that’s helping or reducing cost? How are you seeing that either inside your company or elsewhere?
Using Legal Tech and Outside Counsel
Bob: Well, I think from a management point of view, administrative point of view, one of the, I’m not sure you’d call it a technology, but it is to a certain extent, but the legal management systems that are used for billing and for matter review and matter management have really I think changed the way corporate law departments operate. You know, the ability to have electronic billing, to have electronic audit fields so that the bill doesn’t really get to a lawyer for a review if at all until it’s gone through a series of electronic audits which screen out whatever you’re hot buttons are and your touch points.
They also provide you with a way to slice and dice lots of data including data on the number and types of lawyers with diverse backgrounds working on your matters, both by matter, by subject area and by hour. They give you a tremendous amount of data to compare billing rates among the firms you use. They are valuable tools for managing those outside relationships and simplifying and reducing the number of hours spent by your lawyers or paralegals reviewing bills. So I think that’s been a very important thing.
Some other areas are in the areas of litigation management and document retention. I think unless you are a very large company that has a large in-house litigation team and the budget to buy litigation management tools, leveraging off of the technology that your law firms are using in that space are critically important and save not only the law firm, but the client a lot of time and money in terms of the ability to manage these processes, to engage in document retention and production in a much more cost-efficient manner than really has ever been possible before. So I think those are kind of couple of the big areas that come to mind pretty quickly.
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