Wednesday, March 17, 2010

LMA 2010 - Recovery: Refocusing the Inside Counsel/Outside Counsel Partnership to Maximize Profitability

For the first session of the day, I was in Track One - the Business of Law: Recovery: Refocusing the Inside Counsel/Outside Counsel Partnership to Maximize Profitability.  Presenting was Harris E. Berenson, Esq., the Assistant Vice President/Chief Counsel for Liberty Mutual and Senior Counsel for Liberty Mutual Insurance Company.  His presentation focused on the idea that inside and outside counsel have a partnership, and he started by saying that a partnership, at its core, is nothing more than a relationship.  However, although this is a simple concept, the challenge comes when trying to execute it.  Relationships, both personal and professional, must be built on trust, support, consideration, respect, caring and the mutuality of responsibility.  Inside counsel are looking for a long-term partnership - similar to what people are looking for in a relationship as they get older.  They don't want someone who just wants to be "on the list;" they want a true business partner who knows their business and understands industry issues.  Because of this, they'll often go with their gut instinct and recommendations from trusted friends and colleagues.  Berenson said when looking for outside counsel, he checks with his counterparts, industry peers, and internal teams - when later asked, he emphasized that he does not look at directories and rankings lists for outside counsel and said "they don't matter."   

Once the decision is made to work together though, how do both sides get the most out of the relationship?  Berenson said there needs to be a "mutuality of expectations."  As an example, he said that if the client needs the firm to be available 24/7, the firm needs to be able to articulate how they will do that, not just that they can.  He said there must be "mutual hand-holding," similar to being in a romantic relationship, but he clarified that by "hand-holding," he didn't mean constantly taking people to lunch or asking for their business, but showing the client that you're a valuable business partner.  He also said that lawyers should show their clients that they can do what they said they could do, to suit up and show up, and to keep their promises.  Berenson said that each side comes with their own baggage, and it's up to each side to figure out what that is, and how they can learn from each other. 

A key takeaway that Berenson emphasized is something that I've heard from inside counsel over and over again: "I hire lawyers; I don't hire law firms."  Because of this, he recommended that firms market the people, because that's who builds the relationships.  Along these lines, he cautioned that firms should think about who they're putting forth, because that's who inside counsel look to as the face of the firm.  What "wows" them is an understanding of the business - this is not limited to what the client says to his lawyer, but what his lawyer has proactively researched about his business.  Berenson took it one step further, adding that outside counsel not only need to know their own clients, but also need to know their client's clients, and show a willingness to partner.  Inside counsel want a commitment from their lawyers and for them to be a counselor, not a lawyer. Berenson said that even in this economy, if a firm is giving him service, value, and a good relationship, he doesn't mind paying top dollar. 

He talked a little bit more about his expectations for outside counsel, saying that his main concern is whether an attorney can get the job done, not whether he likes them.  He advised that lawyers should be accessible, respond promptly, learn the business, never say no, and listen to feedback - in Berenson's opinion, outside counsel are just like any other vendor: if he doesn't like you, he'll find someone else.  Because of that, he expects nothing short of excellence from his attorneys.  Like with every relationships, the inside-outside counsel relationship takes work on both sides and doesn't end when you're on the list.  The overwhelming theme I got from Berenson's talk is this: it is even more essential in this economy for outside counsel to sit up and take notice that you need to work at your client relationships or be replaced.

Berenson then took some questions from the audience.  Someone asked how many firms come to him with client satisfaction surveys, and he admitted that it's not as many as he would like.  He thinks that surveys show an interest on the part of the firm in how they're doing and he appreciates that.  There was a final question about what challenges he faces in today's economy, and Berenson said that the cost of legal services is a big challenge, so many of the attorneys he works with are doing more work in-house than before. 

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