In mid-March, I and three Fondian colleagues participated in the annual MPF Summit in London. MPF (Managing Partners’ Forum) brings together leaders from professional services firms for leadership and management development. One of the keynote speakers in the Summit was Susan Hackett from the US. Susan is the CEO of Legal Executive Leadership, LLC, which is a law practice management consulting firm. She is widely recognized as a founding leader of the value movement in law, and as a creative and visionary “engineer” of NewLaw practices. Before LEL, she was a senior leader for over 20 years in the Association of Corporate Counsel (ACC), helping develop the inhouse legal counsel community.
Susan’s topic “Growth: Attracting and Serving Clients” zoomed in the changing needs of the corporate customers of legal services in the US. Her messages, backed up with research evidence, and excellent presentation skills clearly captivated the audience and provided some of the most important takeaways from the event. USA is the world’s largest corporate law market. While the legal system differs from many European countries, still the trends in the demand side – the customers of the business legal services – will certainly be seen also here. And in many cases they are already tangible. Below I attempt to summarize some of the key messages:
Business of law is the business
As Susan said, businesses do not have legal problems, they have business problems. The inhouse counsel as well as the outsourced experts are measured by “their ability to partner with business managers to advance the company’s business and reduce its risk, which is a progressive, not remedial agenda”. Together with this demand for business and industry understanding comes the requirement for several competences which are already prevalent in the general business management; for example project and (lean) process management, implementing digital technologies for efficiency and effectiveness, and collaboration and teamworking skills.
“Lots of lawyers working really hard” is no longer a leading measure of value
93% of senior level business decision-makers rated their law firm’s efficiency as low, and 67% of inhouse counsel terminated relationships with at least one of their law firms in 2015 in the US. Clearly, there was a serious mismatch between what the customer wants and what the service provider delivers. Increasingly, the legal work done by traditional law firms is being insourced (often to non-lawyers), automatized by digital technologies, and provided by different kinds of “New Law” players.
Value is defined by continuous improvement and results
According to Susan, there is already a striking consensus among the customers of what they are looking to as the definition of value-based legal services. She first discussed pricing as an example that is always at the front of every value conversation. Perhaps surprisingly, “low price” comes as the very last one in the list of pricing preferences, where the key topics are transparency, predictability, and the results delivered for the cost. Then there are other key themes the customers also want to see in their legal services entity; e.g., project and process management, including knowledge building and people development, to increase efficiency and promoting smooth collaboration with the business; pragmatic leveraging of multi-disciplinary teams and technology for increased productivity – in general, managing the legal side of the business as the rest of the business is nowadays managed.
Only a couple of years ago I was on the other side of the table, a customer of legal services in a series of businesses, and I must say everything Susan said very strongly resonates with me – and I should believe, with any business decision-maker, everywhere. I and my Fondian colleagues have been very inspired by these messages, too, as we have built and continue developing our strategy and operations around these same customer expectations.