How Mastercard's general counsel improves his relationships with panel firms
The company had doubts about holding law firm summits, but the results have demonstrated their significant value.
September 18, 2018 at 12:00 AM
5 minute read
The original version of this story was published on The American Lawyer
As one of the signatories to last year's open letter from 25 general counsel, I am naturally interested in what makes the law firm-client relationship work better – and I've watched with interest the results of the GC Thought Leaders Experiment.
Throughout the summer, AdvanceLaw – an organisation helping us and 200 GCs identify top counsel – shared a number of findings from the experiment. One finding in particular jumped out at me. In an article about law firm panels, the authors point out that the quality of lawyers' work improves when clients convene law firm summits.
They defined a summit as a "one- or two-day meeting for key outside counsel from several firms to bond with inside lawyers, learn from business clients, discuss strategy and be recognised for strong performance". This chart from that article sums up the difference summits can make:
The data shows that clients hosting summits receive better performance from their law firms. I was interested to see this – and perhaps a bit relieved, as we have been investing in summits for some time now. Since 2016, Mastercard has brought together key players from our principal law firms for live panels, presentations and face-to-face conversations with our company's leadership. This annual event takes place here in our headquarters. The goal is for our law firms to get to know us better, so we host them in our own living room (and dining room).
So why do we do this? And how could this have such a strong impact on lawyers' performance?
There is good evidence that law firm panels often don't perform well, and I think it's because clients fail to build meaningful relationships with their firms. It is tempting to create a panel and expect it automatically to improve cost and quality. Even we at Mastercard may have been guilty of this in the past, but our thinking has evolved. We realised that in practice, like any powerful tool, a law firm panel can make things better or worse. It needs to be used intentionally.
And a law firm panel is, at bottom, a tool for managing human relationships. Face-to-face conversations build trust, establish priorities, create common vocabulary and allow everyone to figure out their true goals. This is hard to achieve over the phone.
While our summits have been a success, when the idea first came up we had our doubts. Would all the law firms come? Would they get along with one another, or even talk to each other? They are competitors, after all. And, oh yes, how much would it cost?
The firms all came. They paid their own expenses without question and the time wasn't billed. Most importantly, they talked to us and each other – a lot – about things that matter. Conversations covered developments in the payments industry, emerging legal questions, important technology questions and more. And they found ways to collaborate for Mastercard's benefit.
After some trial and error, here's what we do now: for one half-day, we bring together representatives from 30 of Mastercard's primary North American law firms. Most firms send three to five lawyers who work consistently for Mastercard. Attendees have a chance to meet and hear from executive leadership and other business leaders within Mastercard who are involved in key initiatives. For example, one year we featured the leaders of a key fintech initiative with significant regulatory implications. If something is strategically important to Mastercard and has a meaningful legal angle, we want all of our firms to know about it.
Our time together also lets us get across key messages to trusted lawyers who are critical to Mastercard's success. Each year we think hard about what themes to emphasise, be they legal or logistical. We have taken the opportunity to talk about staffing levels, consistency of relationship partners, critical forms of data tracking and other practices that we believe lead to better results for Mastercard. Most importantly, we have also set a consistent practice of discussing diversity with all of our law firms, because we firmly believe both clients and law firms must be leaders in making the legal profession more inclusive. Last year, we reviewed the American Bar Association Resolution 113 disclosures of our partner firms, to ensure everyone was aware of their own performance and our expectations.
In an industry as tech-enabled and highly regulated as consumer financial services, it's critical for law firms and clients to be on the same page. This is one of the reasons I continue to be excited about the GC Thought Leaders Experiment and AdvanceLaw's core mission: we need a legal market where client and law firm incentives are aligned and we are learning from one another.
For our part at Mastercard, we will continue to run law firm summits to ensure we get to know our trusted partners face to face, and keep everyone focused on Mastercard's major goals. This isn't easy – as another AdvanceLaw GC has said, law firm summits are "the most difficult, yet most rewarding" thing he does. But it's good for our business clients, it's good for our law firms, and it's great fun to spend some time together. I would certainly encourage other GCs to consider the practice.
Tim Murphy is the general counsel of Mastercard.
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