Big Law and the Old Gillette Strategy: a Response to the Open Letter From 25 GCs
As a group of GCs embark on a plan to track law firm business processes, one consultant urges them to examine their own internal hiring, too.
July 14, 2017 at 10:00 AM
4 minute read
Dear General Counsel,
It's great that you've launched “The GC Thought Leaders Experiment” examination of what works best when engaging outside law firms. Bravo! I look forward to reading your findings; I'm sure we will all learn a lot.
Might I make a plea for you to launch a parallel exercise, one exploring the best ways for corporate counsel to take more work away from law firms, instead executing it in-house (or through non-law-firm vendors)?
I suggest this because achieving your ultimate goal—enhancing value delivered by outside counsel—requires two types of change: change in how you as clients engage outside counsel, and change in the fundamental inner workings of law firms. The former is the focus of your just-launched effort addressing preferred provider panels, flat fees, sharing performance evaluations, etc. The latter, I believe, offers even greater potential for improvement and, paradoxically, the only way it will happen is if you take more work away from law firms.
How can this be? Surely law firms are the ones best positioned to address their inner workings? Well, no. They can tinker but they are currently incapable of fundamental change. According to the recent Altman Weil Flash Survey, less than half of law firms report they have significantly changed their approach to efficiency of service delivery since the recession. Why? It's not spelled out directly but the same survey reports that over 60 percent of firms agreed with the statement “we are not feeling enough economic pain to motivate more significant change.”
To be clear, the logic for taking work from law firms isn't a sadistic desire to ratchet up the economic pressure. Rather, it is because taking work away from law firms is the competitive response required to counter the Big Law strategy of the last two decades. You see, Big Law has been following the old Gillette strategy: add features and raise price. In the shaving world, it started in 1971 with the world's first twin-blade razor. This was followed by lubricating strips, spring mountings, micro-fins, three blades, blades with stronger edges, five blades, blades that were 15 percent thinner, blades arranged together more closely, ball mountings, low-resistance coatings, enhancing lubricating strips, etc. In 2012, Dollar Shave Club launched. They offered a basic twin-blade razor at $1.50 when Gillette was charging over $6 for its latest cartridge. Gillette lost share dramatically, and in response they cut prices across the board, started promoting their lower-cost offerings more and even introduced their own equivalent to Dollar Shave Club, initially branded (not especially imaginatively) as the Gillette Shave Club.
Analogously, Big Law's offer has progressively protected clients from ever-less-probable risks—exposures which many clients would be better off ignoring (that is, effectively self-insuring)—at an ever-increasing price point. Taking work from Big Law is the equivalent strategy response to Dollar Shave Club's launch and growth. Only by removing demand from the Big Law marketplace will firms have the incentive to undertake the real changes required to deliver greater value to clients. As you take more work away, firms will have to fight harder over what's left, and in doing so will start to re-engineer their workflows, invest seriously in knowledge management, change how lawyer performance is assessed (i.e., get away from billed hours), deploy labor-saving technology, and relentlessly push work to the lowest-cost appropriate resource.
Of course, taking more work from law firms isn't without its challenges. Corporate legal departments have struggled in the past to achieve the efficiencies insourcing and outsourcing to non-law firms offer. Hence the focus of this proposed second study would be to answer questions like: what are best practices in hiring from the outside, what's the best “pyramid structure” internally, how are LPOs best leveraged, how can workflows be streamlined, what technology investments are worthwhile?
Don't expect law firms to change fundamentally; they can't; you've got to create the conditions that make it necessary for them to do so. From there, necessity—the mother of invention—will take over.
Respectfully yours,
Hugh A. Simons
Former Big Law leader and (occasionally disgruntled) Big Law client
Cambridge, Massachusetts
Hugh A. Simons is a strategist and veteran professional services firm leader. He is a former senior partner, executive committee member and chief financial officer at The Boston Consulting Group and the former chief operating officer at Ropes & Gray.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllClimate Disputes, International Arbitration, and State Court Limitations for Global Issues
Tiered Clauses in Dispute Resolution: The Role of Adjudication as an Influence on Mediated Settlements
5 minute readBuilding on a Legacy: Kim Taylor and Nate Brooks Propel JAMS Forward
Trending Stories
- 1New York’s Equal Rights Amendment Is a Big Deal
- 2Blue-Ribbon Panel Calls for Pay Bumps for NYS Commissioners, But Says No to Lawmakers, Elected Officials
- 3'Outstanding Cooperation': Feds Seek Leniency in Sentencing for Ex-FTX Executive Gary Wang
- 4'Grave Matter of Serious Consequences': Why a Missouri Judge Sanctioned a Top Kirkland & Ellis Attorney
- 5Large Group Leaves DLA Piper Affiliate in Brazil to Form New Firm
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250