Victims Of Our Own Success

by LeClairRyan
Contact

My wife went to high school with Dan Quinn, who is the current defensive coordinator for the Seattle Seahawks. Dan is widely regarded as a talented coach who should be running his own program. Indeed, just one week ago, the day before the Division series weekend, Dan was touted as one of the top 3 prospects for head coaching vacancies. Luckily for Dan, there were four spots available.

By all accounts, the reason there were 4 spots available was because the Lions, Titans, Browns, and Vikings were all waiting for Ken Whisenhunt to finish his season as the offensive coordinator for the San Diego Chargers. Under NFL rules, a team cannot hire a current coach or coordinator while his team is still active in the NFL season. 4 spots, top 3 candidate, and the Division Championship games to be played. Well, the pundits were right, at least in part. All 4 teams were apparently waiting for Whisenhunt. The Chargers lost to the Broncos last week, and within days, Whisenhunt had accepted the Titans job.

Here’s the problem. The Seahawks won, and now 3 teams with head coaching vacancies were left without their top coaching prospect. As the week progressed, more of those vacancies were filled, leaving the Cleveland Browns as the only current head coaching vacancy. Interestingly, Dan Quinn is no longer the only name being talked about. Indeed, he’s not even listed as the front runner on everyone’s board.

The Seahawks played a great game, and are now on their way to the Super Bowl against the Denver Broncos. The Browns job remains available, and it appears that it may be down to two names now: Dan Quinn and Mike Pettine, both of whom are reported to be scheduled for second interviews. But whether Dan gets the Browns head coaching position or not, the fact is that Dan Quinn was in line for a number of different positions that may have fit him and his coaching style better. But because he and his team continued to win, his choices have been limited to either one head coaching position or staying where he is for another year. We’re seeing a lot of the same on both sides of the current legal services industry. Both clients and firms are exhibiting classic signs of being victims of their own prior successes. While the ever-increasing rates and ever-increasing profitability of the Golden Age of law firms continued, there seemed to be no end in sight. Needed to increase profitability? Raise the rates or bill more hours. Or both. Critics of the system are quick to say that this is nothing more than padding the bill, but it isn’t necessarily that. (Although it may be.) After all, assuming counsel is only doing work that is necessary, the fact that the firm accelerates the pace of that work is not padding the bill. It is simply compressing the time in which that billing is getting paid.

On the client side, service as it was rather loosely defined during that period was consistent and satisfactory. From the client: “we’ll send the file, and they’ll tell us when it’s done or when something big happens.”  From the partner: “I assigned it to the associates, and they’ll tell me when it’s done or when something big happens.”  To the associate: “here’s the file, and here’s your billable hour requirement. Let us know if you need more work.”  This is certainly not management by any reasonable definition of that term. And the bigger issue is that last part, which incentivizes waste and inefficiency.

Well, the New Normal is here. And those who subscribe to it on the client side will no longer tolerate the way things have always been done. On the firm side, both non-law firm competitors and law firm competitors who are embracing this change are positioning themselves to increase profitability without fleecing the clients, because they are going to continue to parse out larger and larger pieces of the pie. The ultra-profitable work is getting compressed into the top, and the rest is being divided and fractured even more than it has been.

There is a law firm with which I am familiar, and which I will not name for reasons that will quickly become apparent, that has a very profitable business model. The concept behind the model was the brainchild of one of the original name partners: undercut everyone, bill at rates that are exorbitantly low, and then get good results by billing the blazes out of every single file that comes in the door. If that firm is in the case, you can be sure of several things. First, they will take lead on every single deposition and appearance. Second, they will target anyone and everyone in the case to split liability as best they can. And third, you are in for many depositions, because they will notice anyone whose name is in their file.

sunk costsThe firm targets a specific industry, and they have, by all accounts, been pretty successful. The patriarch of the firm learned a key metric and exploited it: all of the members of this industry looked at rates, but none of them looked at total spend (defense cost plus settlement/judgment). As long as someone in procurement or on the business side asks “how can we reduce these exorbitant legal fees?” and then accepts as an answer “we can’t, because the firm we hire has rates that are $40 per hour cheaper than everyone else”, nothing will change. And because that has been the measure of success, those clients will continue to flail away at inconsistent legal spends that are higher than they should be.

As I said, change is here… but it is slow to come. There are more and more clients paying attention to the great work coming out of the ACC Value Challenge and so many writers and bloggers who are active on this subject. My own anecdotal information is that the change is becoming more ubiquitous, crossing lines of industry, company size, and historical savviness. On the firm side, small boutiques are fairly well known and written about, as are the early adopters like Seyfarth and Dechert. But more large firms, even some of the largest firms, are coming around. And still others, like my own, are entering into new and exciting opportunities to provide access to new ways of providing superior legal services. Still, those who refuse to fall victim to prior success will turn this corner more quickly than those who simply survive the change. And as more behemoths go the way of Dewey and Howrey, the work will continue to fall to those who are most poised to take the legal industry into its next century…..you know…..THIS one.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© LeClairRyan | Attorney Advertising

Written by:

LeClairRyan
Contact
more
less

LeClairRyan on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.