Did Dewey Ruin It for the Remaining Top-Dollar Firms?

In light of a recent report apparently revealing just how much Dewey & LeBoeuf’s executive director and CFO were making  before the firm went bust (Sara Randazzo, Suit Details Ex-Dewey Leaders’ Lucrative Pay Pacts, Am Law Daily, Dec. 1, 2013), I can’t imagine the conversations that former Dewey clients are having with their supervisors.  

We paid how much? How much of that actually went to firm overhead? What was our return on investment? Actually, what I really can’t imagine are the answers. Absolutely, I can understand the need and desire to pay high-end. All sorts of clients need big-name lawyers and their accompanying big-time prices for all types of legal assistance. But where’s the line between paying for the gold standard and just opening the vault and letting your lawyers take whatever’s in it?

Are six-year contracts worth $15.9 million apiece for an executive director and a CFO too much? All I know is that if I were a corporate client, I’d be asking my own lawyers a few questions about firm finances. If I were Dewey’s competitors, I’d be ready for some answers and be more than willing to explain why we are not them.

—Lori Tripoli

How to Thrive in the Diminishing World of the Legal Business

Opportunity is the word the keeps popping into my head as I read more and more discouraging pieces about the state of the legal field. (Some samples: Tom Huddleston Jr., Survey: Firm Leaders Admit Downturn’sPermanent Impact, AmLaw Daily, May 21, 2013 and Thomas S. Clay, 2013 LawFirms in Transition: An Altman Weil Flash Survey (2013).) Big clients don’t want to keep paying big dollars to big firms during a big recession/apocalypse/long-term decline. That makes sense. 

Some big firms can’t/won’t make the changes they need to remain competitive. That also makes sense. Try getting a speedy and good decision out of any large organization. It’s hard. No one wants to earn less than they previously did, or have fewer perqs, or diminish in stature. No one wants to make the unpopular decision, or be the ultimate fall-guy for a bad business choice. Cover-your-ass seems to be the modus operandi of far too many.

If big firms won’t make that change, someone else will. The solution seems quite simple: cut back and offer value. Clients aren’t buying the tasteful if bland art, the hushed hallways and soothingly lit corridors, the top-tier real estate and high-floor views. Big firms can rationalize these all they want. They can desperately cling to their turf even as it washes away beneath them. Charge clients less, pay lawyers and everyone else less, work fewer hours, and have a good life. How hard is this, really, to figure out?

—Lori Tripoli

Is Steve Jobs Really the Legal Industry’s Super Hero?

Attending a continuing legal education conference on the legal business last week, I was surprised by how many panelists and audience members were citing Steve Jobs reverentially. The co-founder of Apple (and a nonlawyer) famously said that “A lot of times, people don’t know what they want until you show it to them.” See Chunka Mui, Five Dangerous Lessons to Learn From Steve Jobs, Forbes.com (Oct. 17, 2011), http://www.forbes.com/sites/chunkamui/2011/10/17/five-dangerous-lessons-to-learn-from-steve-jobs/. Apparently, a number of lawyers are enamored with the notion that sellers have to figure out a way to sell legal services to clients who don’t even know that they need them. But are iPads and product liability defense work really comparable? Or iPhones and bankruptcy filings?

As heartened as I was to see major law firms embracing business practices, I thought the mention of Jobs in this context demonstrated some callousness toward legal clients. I wish I’d heard more discussion of the other side of Jobs, the brilliant thinker, the rejecting market-research Jobs, the one who managed to come up with incredible products that many of us couldn’t possibly imagine that we would someday need. And yet, today, we have them.

At the legal business conference I attended, though, I sensed more desperation: that in a challenging time for major firms, some lawyers are scrambling to sell you everything, anything, the coffee pot in the conference room if need be, as a means simply to stay viable. I’d be more than wary if I were a major corporate client of what my lawyers were now trying to push. Sadly, I didn’t hear much talk of innovation or of developing an incredible product or service that would change the legal world and the way that clients consume legal services. Perhaps the big-law representatives attending the conference have selected the right train, but they just might be on the wrong track.

­—Lori Tripoli

Should Law Firms Proactively Cut their Fees?

I have to marvel at how some businesses do a phenomenal job measuring their performance, and how some business leaders then seem to hold endless meetings to figure out why their numbers keep going down. Have fewer customers quarter after quarter since, say, 2008? Do all other things remain the same—except there’s a glut of businesses like yours and of workers like those you hire and a lot of your work can be outsourced? Why wouldn’t a leader look to the recession as a likely cause?

I’m not surprised that a recent survey of legal departments by Robert Half Legal lists as one of the top challenges in 2013 controlling outside legal costs. Press Release, Robert Half Legal, Robert Half Legal Research Reveals Top Challenges Facing Legal Departments In Year Ahead (March 13, 2013). What I would like to see is a survey of outside firms indicating how they’re going to help corporate clients do just that. What excess will be trimmed? Will low-level associates be billed out at more reasonable rates? Will overall rates drop? Or will firms just wait until the corporate client looks elsewhere?

Don’t Let Client Confidences Turn into Coloring Paper: Remember to Recycle Responsibly

As we rush headlong into the Christmas season, on the heels of that other holiday emblematic of overindulgence that arrived just shortly after America Recycles Day, recycling may well be on everyone’s mind as we ponder ways to get rid of excess stuff. Regifting the box of chocolate-covered pears a client just sent you? No problem by me—just be certain to remove the gift tag. Sending leftover food items from the office get-togethers to a homeless shelter? All the better. Those are sometimes easy, heart-pleasing fixes to the problem of overconsumption, whether personally or professionally.

Recycling paper can be a feel-good activity (and cutting down on usage can be a real money-saver), but law firms have to tread a bit more carefully when they are getting rid of excess work product. After all, you don’t want an overly enthusiastic paralegal to take a ream of used paper from the recycling bin to her kindergartener’s classroom; five-year-olds and their parents don’t need to color on one side and read all about a client’s litigation options on the other.

In this season of excess even when the economy’s still pretty tight, remember to recycle responsibly. Make sure that  confidential information isn’t getting into the wrong hands and that paper with sensitive material on it is handled and disposed of properly. Know and address confidentiality issues with your firm’s recycler, and make sure that everyone in a law firm knows what can be safely recycled and what shouldn’t be.  Teach, train, and follow up. Just remember to print fewer sheets of paper (and make them double-sided if you do!) while you’re strengthening your firm’s environmental initiatives.

—Lori Tripoli

Cranky Clients May Be Shell-Shocked Sandy Victims

Even though a bit of time and a presidential election have separated much of the world from the news event that was Hurricane Sandy, it would be good to remember that it will be a good long while before much of the East Coast affected by the “Frankenstorm” will be back to normal. Even those who escaped relatively unscathed—with homes and offices essentially intact and power restored—are likely to be a bit shell-shocked from the event. They might be okay, but their communities are not. Many are still without power or Internet access. Neighborhoods have changed; people have died. This isn’t an event that people recover from within a short news cycle.  Even though recovery has already begun, it is far from complete. Lawyers and paralegals may do well to remember that their clients may still be traumatized by this event. Kudos to those legal organizations doing something to help.

—Lori Tripoli