Legal Fims Adjust to New Realities

Change is expected as a new generation steps into in-house legal roles.

Media of all sorts are replete with predictions of a changing world for law firms and their clients. From the perspective of the next generation of in-house counsel, I add my voice to that rather loud chorus. My own views have been influenced and amplified by the experiences I have had through years of involvement with multiple chapters of the Association of Corporate Counsel (ACC). That period of service (and my natural predilection to schmooze) has allowed me fantastic access to countless in-house attorneys of my generation. These interactions have one thing in common:

Each person I speak with, at some point in time, seeks some sort of change in the way we practice law. Certainly, my in-house brethren and I know how to make our voices heard. In blogs, articles and panels nationwide we vent about billing horror stories. And while “consumer discontent” can fuel movement, advancing beyond the “complaint phase” is what will truly spur a cleaner, vitriol-free dialogue.

In any discussion, it helps to know the mindset and worldview of the participants. The in-house attorneys inheriting the reins of billions of dollars in corporate legal budgets are different in some ways than their predecessors. They were at least partially raised, personally and professionally, in the age of “instant gratification” and commonplace “instant feedback.” The environmental conditions in which their careers were forged include the S&L crisis, the housing crisis and the resulting recession, Enron, WorldCom, the Florida recount in the 2000 presidential election, Sarbanes-Oxley and Dodd-Frank, just to name a few.

These in-house lawyers must spend differently than their predecessors. In this post-recession environment, CFOs enjoy more power than in recent memory, as corporations set about the task of minimizing financial risk in a shaky business environment. Every cost is thoroughly scrutinized. The power of the “relationship” in evaluating a law firm has been almost completely replaced by the concept of “value.” The ACC Value Challenge evolved out of the pressures on in-house lawyers to adapt to this environment and their primary service providers: law firms. Despite weak demand for new lawyers, law schools continue to open and (sometimes) seek accreditation from the American Bar Association, bringing even more practitioners into the fold. In law, as in any part of business, from great pressures spring great “change agents.” These attorneys will be the stewards of the metamorphosis of the law firm/corporate client relationship.

This evolution will be defined by several different characteristics, each to be covered in an ongoing series featured on InsideCounsel.com as part of the InsideExperts column, which features articles written by various in-house counsel, beginning in June. 

On the subject of this coming transformation, attendees of the 2011 Legal Marketing Association Annual Conference, representing law firms from around the country, were recently subjected to one of my favorite analogies: “As a Floridian, I know about hurricanes. And all I am doing here is predicting the storm. I am not the only one. Do you want your organization to be the flexible, thinner tree that bends and sways in the winds and remains intact? Or the stiff, unmoving tree that stands straight against the winds and is snapped in two?” The changes will come, and as a new generation of individuals takes control of corporate legal spending, the next era will be ushered in at a rate far exceeding what we have seen to date. It is incumbent upon in-house lawyers to ask their firms: “How are you going to adjust to these new realities?”

Stephen B. Kaplan is senior vice president and general counsel of Connextions Inc. He is founder of NexGen Consulting, which focuses on improving marketing messages of law firms toward the next generation of in-house counsel.

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