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    September 30, 2008  
 
 
Big Thoughts
From ACC

Congrats again to the Bisnow 30 Under 30: Rising Legal Stars.  The group will be honored at a special event this Thursday evening, October 2nd.  Please RSVP if you have not yet!  Contact us for more info

 

Friday’s launch of the Association of Corporate Counsel’s “Value Challenge,” a three-hour program at the Reagan Building, offered too much of interest to cover in just yesterday’s issue. The initiative’s mission: brainstorming ways to match legal fees to the value delivered to clients. The consensus among GCs: The hourly fee ain’t getting it done.

 

Jeff Carr, GC of FMC Technologies, led an hour-long segment that began Biblically. (“In the beginning, there was the bill.”) He quickly got to modern times and made these points:

  • In-house counsel contribute to their own budget problems when they adopt “CYA” practices, like asking for memos they don’t need.

  • Clients love performance-based billing options that put some “skin in the game” for law firms. Ropes & Gray was among those he singled out for being innovative.  

  • Lawyers are good at advocacy, but bad at intimacy. Sounds like marriage counseling, but Jeff’s point was about feedback: GCs need to tell outside counsel whether they’ve met expectations.
 

Are the kids to blame? Much discussion swirled around junior associates—while clients aren’t happy about supporting $160K first-years (two GCs said they don’t pay for them at all), Greenberg Traurig CEO Cesar Alvarez (top center) noted that firms have their own issues. It’s three years until associates become cash positive, he said. Throw in the fact that recruiting each associate costs $250-400K and 80% are gone after five years, as other panelists pointed out, and you’ve got yourself a problem.

 

Bill Lytton, former Chief Legal Officer of Tyco (“post failure,” his introducer hastened to add) currently with Dechert, missed his calling as a game show host. But his skills with the mic served him well in a closing town hall session, in which he attempted to elicit “60 Ideas in 60 Minutes.” Highlights:

  • Stanford Law School Dean Larry Kramer lamented the divergence between firms and law schools over the last 30 years, called law firm donations to law schools “pitiful” (managing to do it very politely), and suggested the abandonment of lavish summer programs.

  • Paul Smith of Eversheds and Andrew Fleming of Ogilvy Renault gave perspective on the British and Canadian systems, both of which include an apprenticeship period before the training wheels come off.

  • Lisa Damon of Seyfarth Shaw claimed that using “Six Sigma,” the firm has reduced its costs on some transactions by up to 50%. Six Sigma, fyi, is not a multi-step karate move, but a management technique developed at Motorola (or so says Wikipedia).
 

We found our recent panelist Joe Titlebaum, former GC of XM Radio (before the merge with Sirius), center, soaking up knowledge in the crowd along with Bluewave ResourcesIlene Price of and Hughes Communications GC (and Bisnow advisory board member—though we haven’t met lately) Dean Mason. Dean tells us that before tossing work to Hogan (litigation), Akin Gump (corporate), O’Melveney (M&A), and Milbank Tweed (communications), he has a clear chat about minimizing first-year hours on his matters.

 

Nixon Peabody managing partner Laurin Mills with ACC Prez Fred Krebs, who tells us he’ll be running a similar program at the ACC’s annual meeting in October (get your tix for Seattle now). Billing solutions have to be hammered out on a one-to-one basis, he says, but the ACC’s website offers some tools to help. Among them: an economic model for a law firm that calculates how changes in numbers of associates, partners, overhead costs, retention rates, and other inputs affects profitability.

Bisnow Legal Editor John Ford will realize incalculable increases in productivity if you send him story ideas. Shoot them to john@bisnow.com.

 
 
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