The annual Canadian Lawyer Corporate Counsel Survey in this issue has a strong focus on alternative fee arrangements. AFAs are what everyone — law firm management, in-house counsel, law associations, legal consultants, and anyone else who cares about the business of law — is talking about. The thing is, while everyone is talking about them, few can actually pinpoint what an AFA is. Is a discount an AFA? Some say yes, and some say no. Is a flat fee an AFA? Same thing. “What some people put in the category of AFA doesn’t actually create incentives for efficiency. That’s when I question whether they are truly changing the landscape and should they be called AFAs?” says Peter Gutelius, assistant general counsel at RBC, in the “Seeking alternative arrangments” story about the survey.
Gutelius says what he and other corporate counsel are looking for from their service providers is more efficiency in getting the work done. That, rather than discounts on hourly rates, will bring prices down. That sentiment was echoed by McCarthy Tétrault LLP CEO Marc-André Blanchard at a recent “fireside chat” with the Toronto chapter of the Legal Marketing Association. From the law firm point of view, firms “need to differentiate yourself in the eye of the client,” he says. It’s not just about industry expertise but about “being more efficient.”
Blanchard was “chatting” with Daniel Desjardins, the senior vice president, general counsel, and corporate secretary at Bombardier Inc., who had penned an open letter to law firms earlier this year. His missive, which caused some waves, essentially called on law firms to act more like businesses. Blanchard, whose firm is one of the largest in Canada, agrees. “We are one of the last industries to get to predictability,” he says. “Where we need to change are the processes in our firms.”
McCarthys was one of the first Canadian firms to embrace project management, which has become a mainstay of the industry, particularly on large matters at large firms that deal with big public or private organizations. He admits project management doesn’t work in every case but says the firm has learned from it’s mistakes and holds true to the process. “Project management is the real thing.” He challenges other law firms across the country to stop holding back on innovation because, as Desjardins points out, much of the legal services he uses are global. Canadian firms have to be able to compete with not only the firm down the street but with every firm, everywhere. And sharing success stories will make all Canadian firms stronger, says Blanchard. “If we share best practices, we can all become the best service providers in the world.”
It’s also not just about other law firms. “We need to compete with the accounting companies,” says Blanchard. And to do that, it’s incumbent on managing partners and relationship partners to build trust with their clients. “We want to become a trusted adviser long term with clients,” he says. That means spending time with clients, understanding the legal departments’ needs, as well as the aim and direction of the company. If you understand the clients’ priorities, resources, and focus, your firm can be part of their strategy and plan your firm’s service plan around “where the client is going.”
For example, Desjardins says if your client sells software, work with them to provide a legal solution so their customers can be compliant with laws and regulations in all regions where they sell it. “If you know your client you can support them in where they’re going.” He says Bombardier goes to its clients to do the same thing.
Not every client relationship will work this way but for the biggest and most important at every firm, it’s the best bet. “We need to up the game,” says Blanchard.
