The rise of the responsible client

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At its recent annual meeting in Boston, the Association of Corporate Counsel dropped a minor bombshell by announcing it had created a law firm rating system. In-house lawyers can now rate their outside law firms on six criteria: understanding of objectives/expectations, legal expertise, efficiency/process management, responsiveness/communication, predictable cost/budgeting skills, and results delivered/execution. Even if these weren’t excellent criteria, which they are, it’s refreshing to see firms ranked on terms that signify value to clients, rather than by how much money they make or how well they score on the latest “Best Employer” survey.

But there are a couple of twists to this system. Larry Bodine points out the first: the ratings are only accessible by ACC members, not by the law firms themselves. That strikes me as counter-productive: a law firm can hardly be expected to improve upon ratings it never sees, so this doesn’t seem like a useful tool to motivate change. But I’m actually more interested in a second aspect of the ratings: they can be made anonymously.  It’s up to the reviewing in-house lawyer whether to divulge his or her identity when delivering the law firm critique. To me, this is more problematic, and it illustrates a flaw in the growing client-rating movement.

We supposedly live in an age of internet-enabled consumer empowerment. Instead of relying solely on what a company tells us about its product or service, we can seek out the collective wisdom of other users. And if the matter at hand is a low-value proposition like whether a pizza place or iPhone App is worth trying, then great: you can afford to look just at the average number of stars out of five bestowed by unidentifiable computer users. But if the purchase has anything more than fleeting value, then you want some weight attached to the review in question — you need to know something about the reviewer. A lawyer review submitted anonymously, whether positive or negative, doesn’t have nearly enough weight to be meaningful. I raised the same objection to anonymous client reviews when Avvo debuted a while back.

Proponents of anonymous reviews could point to wildly successful peer-review systems like Amazon, where users don’t have to use their real names when reviewing products. But even if you post as your cat on Amazon, the system still links to all your other reviews, from which a reader can build a sense of your history, knowledge and biases and decide whether your assessment is worth any attention. Reviews by themselves are just opinions — they only become useful when you know something about the reviewer, when you can critique the critic. That’s the real benefit bestowed by widespread online access: not the power to evaluate, but the power to evaluate those doing the evaluating, to go behind the judgment to the judges. If you can’t do that —  if you don’t know who’s saying great or terrible things about a given lawyer — then you can’t derive much value from what’s being said. People tend to be a lot more circumspect when their opinions are accompanied by their identity.

But the question of anonymous lawyer ratings points up an even larger issue — the fact that clients’ growing power needs to be matched by an equivalent acceptance of responsibility. Clients stand at the threshold of unprecedented choice and power in legal representation — they can hire a lawyer from anywhere they want, order a legal task to be completed by any of a growing number of innovative methods,  demand to be billed in certain ways and up to certain financial limits, and so forth. And it’s all great fun and very empowering for the client, until the ramifications sink in: now they have to work a lot harder to choose their legal services providers and manage their legal affairs more closely.

Clients need to develop sophisticated and defensible systems for selecting and commissioning legal services providers — they can’t just outsource the whole thing to an outside law firm and dust their hands of the details. They need to demonstrate why a particular law firm was chosen over others, or why a law firm is doing a given task at all. They need to understand how legal tasks are unbundled, assigned and workflowed at least as well as their law firms do, and they need to come up with systems to monitor the progress of these tasks and how well they’re proceeding against various time, budget and effectiveness milestones — the process revolution in legal services is underway, but as Rees Morrison points out, many in-house counsel are no better trained at project management than their outside counsel are. Clients will discover that the price of having more choice is the requirement that the choice be exercised justifiably and managed systematically, and that neither will be a picnic.

It’s not so easy to rate a lawyer when your name is attached to the rating, and it’s not so easy to complain about intransigent outside counsel when the question of your own transigence is brought into play. So while it’s true that it’s becoming a lot harder to be a lawyer, I’d also argue that it’s about to become a lot harder to be a client.

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6 Responses to “The rise of the responsible client”

  1. Christopher G. Hill

    Great post Jordan, as always. I am glad to see that clients are being more responsible, and that they are also more aware. This should help the legal profession as a whole.

  2. Pamela Woldow

    The ACC’s new lawyer rating system – created by and for corporate counsel — is just coming out of the gate. And, thank heavens that clients have finally decided to share their collective information in a usable info-exchange. It certainly sends a clear message that the other commercial rating services, largely funded by advertising from the very lawyers they rate, are seen by corporate counsel as pretty much useless.

    In surveys year after year, corporate counsel report that their most trusted sources for information about outside counsel are other corporate counsel – and definitely not pay-to-brag directories. With technological advances and robust new platforms, the exchange of this information definitely has become easier.

    The ACC had the courage to create a uniform rating system that can capture and consolidate the experiences of its members. It provides no guarantee that all these opinions are objective, accurate or wise, but it sure puts the ball in play. Critical to this free exchange of candid information is limiting the possible influence of law firms, and, along with that, their predictable bellyaching and either covert or overt attempts to influence the calculus of information flow and ratings. If law firms want to know what their clients think about their services, they certainly can – and should — ask. There’s a rich variety of ways to elicit that information, e.g., end of matter reviews, monthly briefings, annual meetings, client satisfaction surveys. Yet, in my role of working primarily with corporate counsel, I have been surprised by how seldom outside counsel want or seek feedback.

    Moreover, I have a different view on your suggestion that permitting an ACC member to file an anonymous rating is somehow an abdication of responsibility. It appears to me to be a reasonable starting point for the commencement of a transformative rating system. There are several issues which bode in favor of letting ACC members contribute ratings either with attribution or anonymously: (1) generating buy-in for the new rating system, (2) building the volume of ratings, and (3) maximizing useful and candid information.

    The anonymity of a rating only addresses the weight that counsel might attribute to it – and actually may counterbalance our tendency to accord too much credence to “august sources” or high-profile opinion-leaders. True, anonymity may, in some eyes, diminish the ratings’ reliability. But the point of ratings is to raise questions, not provide incontrovertible truths or final decrees. Ratings should not be taken as substitutes for counsel’s own research and judgment. By analogy, good movie reviews tell us what to look for, not what to think. Agreement or disagreement remains the prerogative of the viewer – once the viewer has gathered information to frame his own conclusions.

    Is the new system perfect? Certainly not yet, but the improvement of and transparency about outside counsel, represent an important first step in a long journey.

  3. Fred Krebs

    Jordan:

    We appreciate your post and the insightful comments it generated. The debate about value in the delivery of legal services is very important–we all benefit from the ideas and discussion.

    Let me provide some further detail the ACC Value Index (AVI):
    1. We created the AVI as a member service, so by definition, it is available only to ACC members. Stated simply, it provides two specific benefits to our members: a) the compilation of individual ACC member views on the value received from specific law firms; and b) the ability to find other members who have used a firm in order to communicate with them and engage in a dialog about their experience. The AVI is a specific tool meant to inform decisions as part of a larger process of selecting and retaining a law firm.

    2. Members may post an evaluation anonymously or with identification at their option. We agree with Pam and believe the anonymity option to be important – particularly at the outset of this initiative. Over time, as the AVI gains acceptance among our members, I anticipate that the percentage of anonymous postings may decline. Evaluations can be posted with attribution – or anonymously – as we seek useful and candid information to build acceptance of the evaluation concept generally.

    3. We will make the evaluation summaries available to the law firms. When and how best to do that remains under consideration by our Advisory Committee. A corollary benefit of the AVI will be the ability to recognize those law firms that provide value in the collective judgment of our members. Coinciding with the overarching goal of the ACC Value Index – information gleaned from the AVI will help to foster a greater dialog between clients and their outside counsel.

    4. The AVI is a work in progress and we are pleased with the interest and input it has generated to date. Nevertheless, it will take time to populate the database with sufficient evaluations to reach a meaningful threshold. The AVI database has been populated with over 1,500 evaluations, reviewing over 400 firms, and we will continue with our member outreach for additional evaluations.

    5. The AVI is only one part of the ACC Value Challenge, which encompasses a larger effort to reconnect value to the cost of legal services. Other aspects include a) “Meet. Talk. Act.” which encourages clients and law firms to engage in discussions about value and their relationship; b) a law firm economic model; and c) specific resources with examples of value practices and ideas on ‘how to’ implement practices focused on value. Resources, success stories and updates are continually added to the ACC Value Challenge community pages and we encourage law firms to get involved and help to provide additional information/resources.

    6. One important observation on the evaluations received to date: law firms generally do good legal work, but all too often, do not have costs and matter management under control. Effective cost and project management should be a key objective — for both clients and firms to effectively work together. By managing legal matters in a business-focused, client-centric way, as opposed to basing solely on “hours worked,” the agreed upon business objectives will drive greater efficiency, and ultimately, value. Law firms must learn to reduce their costs while improving quality. Our members’ companies operate under this imperative, and their outside law firms should, as well.

    Fred Krebs
    President
    Association of Corporate Counsel

  4. Timothy B. Corcoran

    I can imagine a scenario in which outside counsel also have an opportunity to provide commentary on the clients. We sometimes lose sight of the fact that it takes two to tango — or in other words, there are times when a client does a poor job of explaining the desired outcome, or changes the rules based on new information from the internal clients, or a poorly managed law department could send conflicting messages. In this case, does a law firm’s poor performance rest solely on its shoulders, particularly if this is a pattern of performance by the client? Not trying to turn the tables here, but the point is that good, solid, robust and honest feedback going both ways is what leads to true collaboration.

  5. Jeff Carr

    Whether anonymous or not, the power of customer evaluation is quite simply that it comes from the customer. Value is driven by effectiveness, efficiency and customer satisfaction — with the last being the most important. Sure, there will be statistical outliers but as the volume of evaluations increases, those will be just that — outliers. A firm’s greatest protection is in providing superb customer service — and only the customer can and should be the arbitor or that standard. It will be, as they say, what it is and firms can cluck and moan all they want, argue about due process, fairness and transparency — but wouldn’t it be far more productive to consider evaluations as the most important and useful form of context for a teachable moment?

    Firms with their heads in the right place will embrace the AVI and use it with thier clients in an ongoing dialogue. In house folks will do the same. Even those in either camp that are more forward looking will link performance evaluations to compensation to reinforce the positive or negative messages being transmitted as well as the commitment to customer satisfaction. In so doing, the entire legal service delivery system and our collective reputations and images will be benefited.

    As to Tom’s point about lawyer evaluations of customer, well, that’s precisely what we do here today. We use the AVI criteria in each and every matter and evaluate our outside counsel on an on going basis. We use those same criteria to seek input on the members of the in-house team from our outside counsel. All of this is then used in performance reviews and continuous improvement sessions.

  6. Jordan Furlong

    I’ve rarely had this many high-powered commenters in one thread :-). My thanks to everyone who’s chimed in with their thoughts! Here a few quick observations in response.

    I wouldn’t want to suggest that the ACC law firm rating system is a useless exercise — as I noted at the outset, it’s refreshing to finally see law firms rated by clients rather than by themselves or by industry publications. I agree with Pam that ratings of any kind have to take a back seat to in-house counsel’s own research and judgment about a firm. Fred mentions that the summaries will be provided to law firms, and that the AVI is only one part of a larger effort to improve the value equation of law firm services, which I’m very glad to hear — this is a multi-dimensional task.

    But I still think that collective ratings of law firms, some of them submitted anonymously, will have inherently limited effectiveness. Jeff uses the term “evaluations,” and while that’s exactly what law firms need (and what they need to respond to), I don’t think that’s what the AVI provides. An “evaluation” presupposes a known relationship and a defined performance — A is evaluating B with regard to B’s performance on X, Y, and Z. Anonymous and/or collective ratings divorced from a particular situation are not evaluations, at least not in the sense that they can be expected to assess and improve specific behaviour in a specific context.

    As part of a larger, more detailed and more nuanced effort to improve law firm service, with an emphasis on specific relationships — sure, there can be value in these ratings. But my larger point is that in-house lawyers who prefer to operate in anonymity shouldn’t expect outside counsel performance to improve — and that this behaviour goes against the grain of an emerging, better relationship between clients and law firms. Firms have a lot to do to improve client value — but as Tim suggests in his comment and I contended in my post, law departments have a growing responsibility here as well, to engage directly in this process and take part-ownership of the results. My fundamental problem is that anonymity and responsibility don’t mix.

    While preparing this comment, one danger of spending too much time on law firm ratings occurred to me. It’s found in that old Oscar Wilde line: “The only thing worse than being talked about is not being talked about.” Even the harshest reviews of law firms are pleasing to outside counsel in at least one respect: the conversation is about them. So long as in-house lawyers are talking about outside counsel, even if it’s to complain or vilify, it just underlines in law firms’ minds how indispensable they are to their clients: “Can’t live with us, can’t live without us.” I suspect that if clients started talking about re-engineering all their legal tasks through project management, contract lawyering, offshoring and automation so as to assure a more effective final result, law firms would stop smiling in a hurry. It might be that the best way for clients to get law firms’ attention is to not give firms too much of their own.

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