I read the quote more than a month ago and I still can’t quite get it out of my head. It appeared in a brief item by Julius Melnitzer at the Legal Post blog, and I’ll take the liberty of reproducing it in full here (emphasis, as they say, added):
Pfizer, whose general counsel has created the Pfizer Legal Alliance to manage its external counsel relationships, has brought the concept to Canada, and is seeking bids from Canadian firms. The pharmaceutical giant has limited its US representation to 19 firms, which may indicate that it is looking for only a handful in Canada.
Information obtained by FP Legal Post indicates that firms have been surprised by the extent to which Pfizer is focusing on the ACC’s Value Challenge criteria. “They didn’t ask a single question about our legal expertise or the quality of the legal advice,” says one source whose firm recently pitched Pfizer. “A lot of lawyers here in Canada have been pooh-poohing the ACC Value Challenge as a passing fad, but they’re taking it a lot more seriously now.”
A little background: the Pfizer Legal Alliance is a radical approach to outside legal spend by the pharmaceutical giant’s law department. Nineteen law firms throughout the US have been selected to join the Alliance, under which each handles legal work from Pfizer for one annual flat fee that covers everything — from telephone calls to major litigation. At the end of the year, each firm’s performance is reviewed, and the result can be a bonus — or elimination from the alliance.
The ACC Value Challenge is a project by the Association of Corporate Counsel to better align the interests of outside counsel with their in-house clients and to better define and deliver value to those clients. The ACC has identified six “value criteria” for corporate counsel to use when assessing law firms: understanding of client objectives, legal expertise, efficiency and process management, responsiveness and communication, ability to budget and predict costs, and execution.
Now, back to that quote. I’ve been tempted to contact Julius to ask about the tone of voice in which the lawyer delivered it. Bafflement? Possibly a little scandalized? Or maybe just kind of stunned. Surely the client wants to know how smart we are, how accomplished our lawyers, how excellent our credentials. But no, apparently, they just have a series of questions about how well we can understand the client’s business, predict prices, achieve results and communicate to the client’s satisfaction.
With apologies for the generalization, I have to say I’ve been struck by how little urgency is apparent among Canadian law firms these days, compared to our American and British counterparts. I strongly suspect that our good fortune in avoiding the full brunt of the financial crisis and the Great Recession has left our legal sector a little complacent about the scope and depth of the challenges facing lawyers over the next decade. Many Canadian firms still seem to believe that the recent pressures on the legal profession are shallow, recession-driven and temporary, and that everything will be back to normal soon enough. It bodes poorly for the ability of this country’s legal profession to weather the storms ahead if we won’t even acknowledge that the sky is clouding over and that umbrellas would be a good idea.
Here’s a quick illustration of the difference across borders. One of the panels at last year’s CBA Law Firm Leadership Conference dealt with alternative fee structures, and the question was put to the panelists: if a client came to you today asking for a fixed-fee arrangement, how would you respond? A Canadian managing partner basically replied, “Well, if the partnership committee approved it, and it made financial sense for us, and if we could accurately predict the cost of the various elements of the case, etc. … then yes, we’d consider that.” The same question was put to a senior partner from a US firm. His answer: “Yes.” He went on: “We’d figure out later the details of how to make it work. But if the client wants it, the answer is yes.” You couldn’t ask for a better example of the difference between a lawyer-oriented firm and a client-oriented firm, between a culture that thinks lawyers still call the shots and a culture that understands there’s a new game in town.
Pfizer’s initial foray into Canada, searching for law firms that get it, ought to make clear to lawyers here that it’s time to stop hitting the snooze button. Change is here and it’s real, and law firms that continue to conduct business as usual are taking a great risk. Clients, it can’t be said often enough, aren’t impressed by firms’ pedigrees or the qualification of their lawyers or what schools they attended: clients know or assume that all lawyers are at least competent and probably excellent at their jobs and are otherwise pretty much indistinguishable. What they’re seeking are ways to choose among firms, and the criteria they’re using are those that contribute directly to client value.
If you still believe, as a Canadian lawyer, that your “legal expertise” or “the quality of your legal advice” is the difference-maker for your clients, please understand that this is what clients care about today:
Results: deliver what the client needs — no more, no less — on time, on budget, in ways that enhance client value.
Price: ideally fixed, certainly predictable, in no way variable according to how many hours you worked — and oh yes, discounted.
Alignment: know the client’s objectives and adopt efficient systems and processes to help achieve those objectives.
Assurance: never make the client regret, in front of bosses or shareholders, that he or she relied on you.
We have no cause, as Canadians, to be sanguine about the future. Our governments are heavily indebted, our housing market is still frothy, and our health-care system has outgrown our present willingness to pay for it. The hammer has yet to really fall here, and when it does, we’re going to experience what lawyers elsewhere have already gone through. We’ve been given a reprieve of several months, maybe a couple of years, but that’s all.
Make the most of this opportunity to prepare for a far more demanding client marketplace. I can guarantee that Pfizer will not be the last client to leave lawyers baffled, scandalized or stunned by its demands.