ACC president Fred Krebs tells Alex Aldridge how the body is moving to force real change onto the agenda of corporate counsel – and reluctant law firms

A year ago The New York Times asked Fred Krebs, president of the Association of Corporate Counsel (ACC), for his thoughts on the debate within the legal profession over billing models. Borrowing Churchill's famous quote, Krebs responded: "Never has so little been accomplished by so many for so long."

Twelve months on and Krebs (pictured above) is still frustrated with the lack of movement away from charging for legal services by the hour – a way of working he blames for the "unsustainable" business model prevailing at many major law firms that sees large numbers of high-billing associates supervised by a relatively small group of partners. "There's a continuing issue with having four or five associates on a project being billed out at $400-$500 an hour when they know diddly squat," he says.

However, Krebs acknowledges that there has been some progress in this area of late: "The economic downturn has shaken things up and moved the debate forward," he says, citing a recent survey that the ACC conducted in association with Legal Week's sister title The American Lawyer, which revealed a growing shift to alternative billing. There is still a long way to go, though, with 47% of the general counsel surveyed indicating that alternative fees account for no more than 10% of their annual external legal expenditure, and nearly a quarter of respondents saying they didn't use any of these arrangements.

The US-based ACC – which has approximately 25,000 in-house lawyer members in over 70 countries – is doing its bit to change the situation through its Value Challenge initiative.

valueMarketed under the slogan 'Meet.Talk.Act', the aim is "to reconnect cost and value by encouraging our members to sit down with their law firms and talk about how they can work together more effectively," says Krebs.

To facilitate this process, the ACC has developed a one-page covenant between clients and external counsel broadly defining what they should expect from each other. Among the things law firms are urged not to do is "reinvent the wheel". Instead, they should "look first to past work products". Krebs believes firms that do this will not only save time, but find themselves in a much better position to predict what their costs for a matter will be. And that, he adds, will mean being able to offer accurate estimate-based fixed fees rather than keep the clock running throughout a deal.

Another component of the Value Challenge is the recently launched Value Index – an online forum that allows ACC members to share feedback on the service they receive from law firms, which is then converted into rankings.

"We look at it as a way to promote dialogue and drive change. It's a tool for our members, while also representing a move away from simply judging law firms on profit per equity partner (PEP)," says Krebs, no fan of the PEP metric, which he describes as "flawed, a major contributor to the lack of value being offered by firms, but not going to go away".

Not surprisingly, law firms are not so keen on the initiative, with plenty of murmurings about unfairness and lack of objectivity. The fact that the evaluations can be made anonymously, potentially opening up the process to axe-grinders, has been particularly criticised. And there was controversy last November when US legal blog Above the Law got hold of some of the early stage rankings and published them. But Krebs remains upbeat: "The publication of ratings at that point was premature from our perspective. However, once we get a critical mass of reviews, you start answering the criticisms. Of course, the ratings [based, to date, on around 1,800 submitted evaluations] should be considered as simply a useful resource that sensible people will use in conjunction with other data points," he says.

When that critical mass is reached, the Value Index could represent an alternative to the established legal directories. But Krebs insists the plan is not to rival the directories. "I haven't even thought of it in those terms, to be honest," he says. "We're not selling anything around this, just trying to provide a service for our members." Of those members, only around 300 are based in the UK. If the ACC Value Index takes off, Krebs may well find a few more British in-house counsel signing up.

Founded in 1982 by a group of general counsel at some of the largest organisations in the US, the Association of Corporate Counsel (ACC) now has approximately 25,000 members in over 70 countries, including 1,200 in-house counsel in Europe – although 90% of members are based in the US. The group is now easily the largest member body in the world dedicated to in-house lawyers.

"Our founders established the association because in-house counsel felt they were not being served by the various Bar associations and wanted a place where they could interact with their peers," says Krebs.

The membership criteria is simple – you must be a practising in-house lawyer in a private company – and is strictly adhered to. When former chair Ivan Fong was appointed by President Barack Obama as general counsel for the US Department of Homeland Security, he was forced to resign his position and membership. "Of course, if he moves back to a corporate counsel role he can rejoin," says Krebs.

Dirk Tirez, general counsel of the Belgian Post and a member of the board of ACC's European chapter, is enthusiastic about the benefits of being involved with the organisation. He comments: "A lot of people underestimate the power of in-house counsel to ask each other what they think of a law firm. Having a network like this is very useful in that respect – particularly with regard to obtaining advice on who is good in foreign jurisdictions."

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The Association of Corporate Counsel

Founded in 1982 by a group of general counsel at some of the largest organisations in the US, the Association of Corporate Counsel (ACC) nowhas approximately 25,000 members in over 70 countries, including 1,200 in-house counsel in Europe – although 90%of members are based in the US. The group is now easily the largest member body in the world dedicated to in-house lawyers.

"Our founders established the association because in-house counsel felt they were not being served by the various Bar associations and wanted a place where they could interact with their peers," says Krebs.

The membership criteria is simple – you must be a practising in-house lawyer in a private company – and is strictly adhered to. When former chair Ivan Fong was appointed by President Barack Obama as general counsel for the US Department of Homeland Security, he was forced to resign his position and membership. "Of course, if he moves back to a corporate counsel role he can rejoin," says Krebs.

Dirk Tirez, general counsel of the Belgian Post andamember of the board of ACC's European chapter, is enthusiastic about the benefits of being involved with the organisation. He comments: "A lot of people underestimate the power of in-house counsel to ask each other what they think of a law firm. Having a network like this is very useful in that respect – particularly with regard to obtaining advice onwho is good in foreign jurisdictions."