The annual Georgetown Law School conference on large law firms opened Sunday night with the general counsel of Ernst & Young Global saying that the times — and the flow of international capital — demanded a new model for law firm-client relations, a prediction by the senior vice president of the Association of Corporate Counsel that clients would be patient for only another 18 months with their outside firms and a vigorous defense by the outgoing head of Kirkland & Ellis who said essentially that anyone who thought law firms didn’t understand that a new reality was upon them was not paying attention to the market.
It was a lively start to the two-day, 10-panel meeting sponsored by the Georgetown Center for the Study of the Legal Profession. This year’s event, titled “Law Firm Evolution: Brave New World or Business As Usual?,” is the third such conference organized by the Center. This conference is different from the usual fare in that it attempts to bring 60 academics, working lawyers and a handful of outside observers into the same meeting to discuss and debate a variety of academic papers that range across the landscape from studies of client hiring patterns to a case study of the rise of law firms in Shanghai. (Click here to access the papers.)
Trevor Faure, E&Y’s global general counsel, spoke first. Faure became prominent in legal circles three years ago when he was credited with leading Tyco’s massive reorganization of its outside legal counsel in Europe, the Middle East and Africa. It was reported at the time that he had shifted Tyco’s work from 240 firms to one, Eversheds, a massive, U.K.-based firm. Now a partner at E&Y, Faure is the author of a new book, “The Smarter Legal Market: More From Less”, which served as the basis for his talk.
He argued that the “Darwinian path of international capital seeking maximum returns,” was undermining law firm models and client relationships. He argued that the familiar Six Sigma standards of “measuring, managing, and improving anything” would be felt in the legal marketplace along a continuum that began at the bottom of the work triangle with more common and regular work — data protection, standard contracts and the like — and would ease back a bit as it moved toward major litigation, competition and sensitive compliance work. He had a chart but suggested there was a “visceral” test: If the client wants his lawyer to hold his hand through the process, that work was higher up the food chain.
Complicating and irritating the relationship, he said, is the nature of the law firm-client model, largely a zero sum game, in which one side wins and the other gets to feel resentful. In an age where businesses are demanding more for less and the companies themselves are coming under the control of new investors who neither know nor care about the past relations, this model, he suggested, was “unsustainable.”
Instead, he called for new models that increase levels of “cooperation, communication and trust” between the clients and their law firms. He suggested that both sides needed to find ways to align what he called their real interests. For firms, those might include: profits; producing high-quality work; driving down risk; and increasing volume with a client. Clients’ interests, he suggested, include: predictability of expense; a quality product; responsiveness; and help in avoiding problems.