Measuring time by the billable hour has always been a cornerstone of the legal profession – not only for charging clients, but also assessing lawyer productivity and significantly impacting compensation. Accordingly, when clients started to question the billable hour, they raised concerns that have had a revolutionary effect on the way legal work is done, measured and valued. These issues are at the heart of how law firms do work for clients and the methodology used to incentivize their lawyers.
How should law firms respond?
First, they should make sure that they are giving clients more value for their money. For some clients, this may mean complimentary seminars for their business leaders and the use of office space; for others it may mean secondments to help address gaps among in-house legal teams, or entering into creative fixed-fee arrangements that permit ad hoc advice in key areas.
Second, they need to be bold about re-thinking what they do. The lawyers and firms that will truly excel in the profession are those that will think creatively about the way they actually help their clients solve problems. As a starting point, there are three questions that lawyers need to ask themselves in dealing with clients:
- What problems do we help our clients solve?
- Who do we need to work with to solve those problems?
- How can we do it most efficiently?
Understanding Challenges from the Client's Perspective
Clients have always come to their lawyers for solutions to legal issues. Increasingly, those issues have become more complex depending on the nature of a client's business. Some of that increasing complexity is because of changes to public policy – for example, regulatory changes – while in other cases it's caused by technological change or public expectations about transparency and accountability.
The advent of social media has completely transformed the management of reputation, branding and stakeholder relations. Technological changes are disrupting traditional business models in a range of industries. Clients still need legal advice first and foremost, but more than ever lawyers must really understand their clients' businesses, and the environments in which they operate.
Who Lawyers Work with to Solve those Problems
Never before has playing nice in the sandbox been so important. Many legal problems cross borders or have high-risk shareholder, stakeholder and public relations implications that cause in-house counsel a lot of anxiety. To be equipped to handle such matters, lawyers can't work in a vacuum.
As a result, depending on the deal, case or issue at hand, lawyers need to consider whether they need to bring in other advisors to provide a client with a comprehensive solution. Such advisors can include colleagues in other practice areas of the same firm, and outside specialists like media and communications specialists, government relations experts, forensic accountants, consultants or other law firms.
Doing it All Efficiently
"Expensive". That's the phrase typically associated with "lawyers". Add some more professional advisors, and it only gets worse..... Lawyers must be pro-active in developing workable cross-functional teams where tasks aren't duplicated and time is not wasted.
Clients should never pay for duplication, so each member of an advisory team (internal and external) needs to have clarity on their role. Project management tools can be applied to create and control budgets and costs and steer the work product towards what the client wants. All the foregoing help to meet a client's expectations and bring innovation to fee arrangements. Ongoing communication among the team and with the client is key to nurturing the trusted advisory role.
What Next?
If law firms are to be prepared for this future of collaboration and problem-solving, they need to:
- Ensure that they truly understand the industries in which their clients operate.
- Develop effective relationships with other professional advisory firms and be prepared to collaborate, including by looking at alternative fee arrangements.
- Reward lawyers who demonstrate the skill set that fosters collaboration, both internally and externally.
Lawyers need to inspire clients. The way of the future is incentivizing lawyers to be industry-savvy, collaborative and creative in their client focus. Like it or not, the revolution is happening and it's up to lawyers to ensure that they are ready and remain relevant.
What do you think?
Originally published by Cordell Parvin Blog.
To view original article, please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
