The New York Legal Marketing Association hosted its annual General Counsel Forum last week, featuring three prominent GCs from major New York industries: Jason Greenblatt of The Trump Organization, Ed Holmes of AIG Investments, and Scott Univer of the accounting firm WeiserMazars. Aric Press, editor in chief of American Lawyer Media, served as moderator.
Obviously, the industries and firms of all three GC panelists were rocked by the 'dark, demanding and sleep-disturbing downturn in recent years,' and this forum - titled 'What Keeps You Up At Night?' - was meant to provide them a chance to share their experiences and concerns with the packed house at the NYSSA. The conversation was a lively and wide-ranging one, covering such topics as reputation management, legal risk across multiple jurisdictions, the increasingly complex regulatory environment, and, most of all, how frustrating it is to deal with clueless law firms (and what the firms might do to alleviate this). Here are some highlights:
1. Reputation Management
Two of three panelists represent organizations that have fairly extraordinary reputational circumstances. Of course, AIG did not exactly cover itself in glory during the credit crunch and its aftermath. And where even to begin with Trump? (Maybe with a primer on caterpillars that resemble the man's hair?) Press asked the panel how they approach this thorny issue of reputation.
AIG's Holmes tersely stated, 'We don't deal with it. That's media relations and they are either effective or they're not.'
Trump's Greenblatt did not exactly answer the question, instead noting that the Trump family members are 'really nice and smart' once you get to know them, media distortions notwithstanding.
WesierMazer's Univer was more expansive: 'For an accounting firm, reputation is everything. Arthur Andersen never recovered from Enron. There are few chances to make a 'definitional decision' - it is important to seize that chance and send a message, even if it is not the most profitable move. For example, sometimes it is simply necessary to ditch an unfit partner - even if you have to frame it in other terms for public consumption, people get the message.'
2. The Lack of Truly 'Global' Law Firms
Surely to the chagrin of the various representatives of self-styled 'global' law firms present, each GC panelist, at different points, scoffed at law firms' pretensions to a global presence.
Holmes: 'As AIG operates in multiple jurisdictions, the trend of the larger firm in more spots, who can find ways to bring all aspects to the table, is a welcome one ... [But] law firms do not have much jurisdictional breadth: nobody is truly global.'
3. Useless, Generic Client Memos
Please stop. The panel was unanimous in deriding the typical law firm's pushing out a continual stream of client memos/legal alerts/white papers/etc.
Holmes: 'These do not serve a particularly useful function as they are not tailored to the particular company and are not detailed enough to be relevant. ... We get showered by those things. We don't have time to read them. It would be helpful if someone helped manage the waterfall ... Anyway, I only listen to those who have actual expertise and with whom we have a relationship.'
Univer: 'I have a file for those things and it's round.'
4. Information Storage and Management
Univer: 'We no longer measure the size of a case by the number of cardboard boxes of documents it entails. We also have an increasing number of laws governing what you have to do with information (e.g., HIPAA, Dodd-Frank) and lawyers don't really understand this complex and virtual data environment ... The real problem is email. There is a spectrum of care. People don't think. Plaintiffs' lawyers and prosecutors go after emails and that will kill you.'
5. Clumsy Pitches by Would-be Outside Counsel:
Univer: 'Stop wasting my time telling me what a great lawyer you are ... ask me about my problems and help me find a solution.'
Greenblatt: 'A crucial element of a pitchbook is how it addresses staffing. We won't pay for training junior lawyers. A successful pitch will contain assurances that the right people are on the team. Of course, bills will be scrutinized line by line.'
6. Unreasonable Firm Billing Demands
Greenblatt: 'If a deal dies, and the firm still insists on being paid 100 cents on the dollar, we'll pay you and never use you again.'
7. Turnover and Attrition in Law Firms
Holmes: 'This has an impact on the institutional relationship. With associates, there are efficiencies in long-term relationships. Communications improve over time, but the way the [law firm] model works disrupts these relationships. When partners lateral, we have a dilemma. Counterintuitively, perhaps, we usually stick with the firm. We want to limit the number of firms we retain, so it makes it a difficult decision to follow the lateral partner to the new firm, so we mostly stay with the firm.'
8. Firms Failing to Ask Clients if Associates are Performing Well
Univer: ' We tell them. We are interested in continuing the relationship.'
9. Lack of Work/Life Balance
Greenblatt: 'It's harder as the work heats up, but I hate to see the associates ground down and exhausted. That is bad for the client. I don't want an exhausted lawyer negotiating for me. Lawyers need to be salesmen. Cranky, burnt-out lawyers are lousy salesmen. This message falls on deaf ears when talking to firms.'
10. Lawyers as Lousy Businessmen
Greenblatt: 'Lawyers who fight over every clause lose sight of the big picture. They hurt deals, cause delays and drive up costs. Lawyers need to think like businessmen and get deals done quickly and properly.'
11. The Cost Of Litigation
Univer: 'There are two motivations of outside lawyers that are misaligned with clients' incentives: (1) The billable hour and (2) The fear of being accused of 'not leaving any stone unturned.' ... Rather than create efficiencies, the advent of eDiscovery has jacked up discovery costs. Thus, we insist on arbitration and mediation, including the 'English Rule' on cost-shifting. Further, we also insist that parties justify discovery requests.'
Holmes: 'Establishing a fixed cost at the outset prevents outside counsel from 'going down every rabbit hole.''
Greenblatt: 'We cap deals and stay in constant communications with the firms to prevent overlawyering and churning documents.'
12. Success Fees
Greenblatt: 'The problem is how to define success. How do you prove it? Situations arise where everyone wants credit and there's too much arguing.'
(Recall the JFK quote: 'Victory has a thousand fathers, failure is an orphan.')
13. Law Firm Rankings
Greenblatt: 'We pay no attention to them. Great firms will have some terrible lawyers and vice versa.'
Holmes: 'We are looking for a relationship. Individuals are more important.'
Univer: 'Client surveys are inherently flawed. Who are the firms going to refer media to? Not unhappy clients.'
(Ok, so law firm rankings aren't keeping any of these GCs up at night. Yet it is interesting to note that much of the criticism of the utility of rankings focused on the primacy of the individual relationship between the company and outside counsel. This view is perhaps inconsistent with the companies' reluctance to follow lateral partners to new firms.)
Many thanks to the NYLMA for inviting us to their interesting event.
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