Recently, I saw an article in a legal publication that quoted an in-house attorney as saying that he had to cut costs for outside attorneys, or else they would walk out of his bonus. Although I’m sure this attorney is dealing with pressures, cost control and others, which I can only imagine, what struck me was the implication of a somewhat antagonistic relationship between client and outside counsel.
After many years in this profession, and despite the current economic conditions, I hope it has not come to that. It seems to me that the focus should be on providing the necessary legal services to the client in the most efficient manner possible, whether those services are provided by in-house or external counsel. That result is best achieved when there is a strong relationship of trust and understanding between attorney and client. While the attorney must earn that trust, it is also true that this type of relationship can only happen when the client lets the attorney be part of the team.
In a team relationship, the attorney gets to know in detail the client’s business, the client’s approach to legal matters, and the client’s approach to business matters. As a result, the customer receives added value without paying more. The client does not have to waste time telling me about his business or his general objectives, because I already know.
There are other ways that intimate knowledge of a client’s business adds value. For example, I and many other business lawyers read the business press voraciously almost every day. If I see an item that I think will be of value to a customer, I resend it. Although I try to do this for all clients, it’s certainly much easier to tune in to articles of potential interest when you thoroughly understand the client’s business.
The least satisfying relationships are, as I’ve written before, when a client treats the attorney like a fire ax in a glass box: break the glass and use it only in an emergency. I guess some customers think they are saving money this way. In reality, in the vast majority of cases, the fire probably could have been prevented if the client had called an attorney first. Damage control is rarely very satisfying to anyone.
Other variations of the “fire axe” approach include not telling the attorney all the facts, or providing relevant documents piecemeal. Or calling with a “quick question” without giving the full context. Even when you do your best to get the client to avoid these approaches, it’s sometimes hard to convince people to do what’s good for them.
Clients probably follow the axis of fire and related approaches because they think they will save money. However, it is doubtful that these approaches will result in real cost savings (much less in the optimal provision of legal services). It certainly makes it difficult for the lawyer to add any value beyond the limited subject matter when used in such a piecemeal fashion. In fact, it is even more difficult to tackle the narrow problem when one does not understand the big picture.
Of course, relationships of trust and understanding do not happen overnight. However, there are some things that both attorneys and clients can do to move the process forward.
1. Lawyers need to communicate with their clients. I still hear cases where attorneys don’t return clients’ calls or respond to emails. Frankly, it’s hard to believe this could happen today, but apparently some lawyers still do.
2. Fee issues need to be discussed early and early. If there is a reasonable mutual understanding of what the fees will be, there will rarely be a fee dispute.
3. If a customer has a rate issue, the customer should bring it up right away. Perhaps there is a simple and reasonable answer to the bill. In other cases, an adjustment may be appropriate. However, letting a fee issue simmer unresolved is not good for anyone: it undermines the client’s trust in the attorney, is likely to result in unnecessary personal stress on the part of the client or the in-house attorney, and cannot lead to a resolution.
4. Lawyers don’t always need to be working. Of course, I don’t charge clients to send them trade items. I look for opportunities to take clients out to lunch, which gives them the opportunity to discuss their legal issues or whatever is on their minds outside of business hours. I often offer to provide educational presentations on relevant legal topics to clients at no charge. If I am going to attend an event that may be of interest, I try to make sure the clients are invited. Also, I almost always write a cover letter (free of charge) that accompanies a statement for services rendered. If there has been any significant activity during the month, I usually try to include a brief status report in the letter reminding them of what was accomplished in the previous month. I use the word “remember” on purpose; hopefully the customer is well informed before the bill arrives.
5. Lawyers must thank their clients for their business and for their trust. Similarly, while I never think it should be expected, it sure feels good when you’ve worked hard to achieve a good result, and the client says thank you for a job well done.
6. If attorneys are invited to join the team, they must join the team. Lawyers should look for opportunities to provide added value, such as through articles and, where appropriate, notifying the client of potential beneficial opportunities or business relationships.
7. Lawyers must remain involved in their clients’ work. One of the big frustrations I hear in the legal press is that in-house lawyers hate meeting with a “relationship” partner about a new matter and then being sent to someone they’ve never met, often a junior partner. This is probably the root cause of the revolt of some corporate clients who refuse to pay for associates’ time in the first year. It does not have to be this way. There are firms that eschew a leveraged model and where senior lawyers do most of the work, or at least stay involved. This approach brings experience and judgment to the relationship and also helps ensure that client expectations are met. One of the things that attracted me to my current company is that it follows this approach.
8. If a client is on a tight budget, involve the attorney directly in the discussion. Although we always try to work efficiently, there may still be opportunities to do work more efficiently. There may be work that can be identified as “optional.” There may be work that the client decides not to do, even though, optimally, it would be done. One caveat to the last point: if the client decides not to do a certain job, they should not blame the attorney if it later turns out they should have, and they should not object to an email from the attorney confirming the decision not to do the job.
I do not have all the answers. I know that tough economic times have put corporate legal budgets to the test for businesses of all sizes. But I can’t believe that, in the long or short term, an adversarial approach between clients and their lawyers or between internal and external lawyers will help anyone.