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The ACC Value Challenge

Reconnecting Cost with Value

www.acc.com/valuechallenge

Rev. 2/2009

What is the ACC Value Challenge?

• The ACC Value Challenge is an initiative designed to bring together law firms, law departments, and other legal community leaders and service providers to discuss how to:– Reconnect the cost of legal services to the value

provided;– Assure better and more efficient relationships;– Help improve client service;– Focus on practical improvements to legal service

processes that increase value to the client.

Why Now?

Why should we change longtime service models that have served us for decades/with

which we’re comfortable?

Dissatisfaction and Rising Costs are Not New

The In-House Perspective – A“Tipping Point”… “inelastic” firm costs, despite law departments’ increasing efficiencies - steady 6-7% increase/year

… associate salary increases – firms choose pay scales

… PPP - profit per partner – an unwelcome driver that controls behaviors in the leveraged law firm model

… the $1,000/hr partner (usually worth every penny) vs. the $350/hr associate (usually not that valuable)

… The waste of time and relationship arguing over bills rather than focusing on results

If they’re currently profitable, should firms care?

… what impact will the economic downturn have on firms?… where is client and partner/associate loyalty in today’s firm?… firm managers know they can’t sustain current returns. … fees can’t continue to rise without repercussion.… continuing / increasing problems with firms’ primary asset: the talent pool - both partners and associates.… increasing competition from vendors / off-shored services.… the difficulty of aligning behaviors/business culture to reward lawyers for client service rather than hourly billing or book.… clients who are turning to corporate procurement practices to manage firm costs.… making the practice of law something lawyers love again.

Who’s to “blame”?• All of us – it’s about responsibility for change, not

finger-pointing• In-House Counsel must own the challenge:

… we asked for the billable hour; we got it in spades.… many IHC would rather live with problems they know, than aggressively manage risk or change.… “No one ever got fired for hiring biglaw.”… IHC are often “of” the firms they manage.… IHC, too, often resist establishing business processes.… Lack of skill/experience in executing needed changes.

The ACC Value Challenge

A (R)evolution in the inside / outside

counsel relationship

(Defined as: Revolutionary Thinking – blowing up the box, combined with Incremental Progress via Evolved Practices over Time)

The Project Drivers• This is not about blame; it’s about responsibility to do better.• While lower costs will result, this is not a cost-cutting project;

value is not cheap. But it’s always worth the money.• Proposed change must be institutional / large-scale• A focus on value re-defines quality; it does not sacrifice it.• Tools, education, resources to equip lawyers • Momentum and acceptance to create comfort zones• Departments/clients reward performance (and risk)• Firms deserve to profit; new models must combine incentives

for profit, efficiency, quality, value

Anticipated Outcomes• FOCUS ON VALUE: Firms will win work from clients based

on value: value is defined in the eye of the beholder.• HIRE THE FIRM, not the lawyer. Create relationships/loyalty.• INCREASED RETENTION: Associates and mid-levels

focused on counseling and client service / success evaluated on efficiency, client satisfaction and performance.

• MANAGED COSTS: Managing the clients’ spend more efficiently: better budgeting/predictability/accountability.

• PROFESSIONALISM / CAREER SATISFACTION: Rediscovering the inside / outside relationship based on defined goals and excellence, rather than arguing over bills.

Current Activities:• Develop models: create conversation platforms• Collaboration between individual decision-makers, practice groups,

vendors, and firms/departments• Regional / ACC Chapter discussion groups in 2009• Creating practical tools for immediately implementation• Aggressive Metrics: Measure / Move the Needle• Re-focus the AmLaw 200 to rate value (not just size and profit)• Establish an ACC Value Index to promote scores for “value firms”• Improve Law Firm/Client Relationships through Covenant / Sign-Ons• Empower a New Culture and Sustain Our Momentum: Yes, we can!

The ACC Value Challenge – Talk! - Meet! - Act!

Open Discussion Topics Could Include:• Evaluation Practices / Metrics

• Alternative or Innovative Billing Practices

• Shared Knowledge Mining

• Retention/Engagement Process (Setting Expectations)

• Communication Techniques

• Retention, Promotion, Compensation, Team Building Tactics

• “Global” or Coordinated Service Delivery Options

• Internal Process Improvement

• Innovative Staffing Ideas

• Value and Values: pro bono, diversity, professionalism & balance

For More Information:

The ACC Value Challenge and its online community are online and open to everyone at:

www.acc.com/valuechallenge

Or email Susan Hackett -hackett@acc.com or Renee Dankner - dankner@acc.com