The death of the billable hour is a subject close to Stephen Allen's heart. Currently Director of Innovation (I want that job title!) at Berwin Leighton Paisner, formerly both a Chief Executive at leading barrister chambers 7 Bedford Row and prior to that Group Company Secretary at Orange broadband services, Stephen has a particularly well-informed perspective on the topic of what in-house lawyers want and how private practice firms should go about providing it. Always one to engage attention with an intriguingly-turned phrase, Stephen came in to talk to the Kysen team this week about "The Value Paradox": how in-house lawyers are undoubtedly tired of the hourly rate as a way to measure the value that private practice lawyers provide; yet the reality is they find it hard to measure value in any different way.
"I have a story for you, a parallel with Lady Windermere's Fan", he told us, "the famous Oscar Wilde play staring Lord Darlington, the man who knew the price of everything and the value of nothing. Imagine this scenario: a head of legal at a FTSE 100 firm invites two firms to give a piece of mission-critical legal advice. The first firm, Erlynne & Co, costs the job on the basis of research and drafting time, delivering an estimate of 70,000 pounds for the work. The client negotiates this down to 50,000 pounds. The firm then takes three weeks to deliver a 150-page report, of which the executive summary contains all the client needs. They tell the client 70,000 pounds worth of time was spend on the work, but finally agree to stick to the negotiated 50,000 pound charge. The client is happy, feeling they received real value for money.
"The second firm, Augustus Lorton, offers straight away to do the job at a flat fee of 50,000 pounds and the next morning delivers the equivalent of the exec summary, (the only bit the client actually valued in Scenario One), in a half page email. The client balks at paying 50,000 pounds for such a quick-turnaround job.
"The moral of the tale? Despite the rhetoric about wanting a change from hourly rates, a typical in-house legal client often finds it hard to see value in the way the job was handled in Scenario Two, despite them getting the bit they said they valued so much - and getting it sooner. This is what I call The Value Paradox.
"The message really is that it's the job of the private practice firms both to find a new pricing model and lead the client in understanding where the value is."
In his role at BLP Stephen has been working hard - indeed innovating - to find new models that get to the heart of how in-house lawyers want to work differently and in a way that works for his firm too. Take a look here for details on BLP's ground breaking deal with Thames Water, where they bought out the in-house legal team in a five year deal to deliver legal services to the company through the former in-house team, through BLP's own team and via subcontracted firms Ashfords and Pannone.
"A triage system is key to the success of how this project is managed, with the emphasis on accurate diagnosis of what skills a particular piece of legal work requires, followed by an astute assessment of who in our collective team does what best - and how to divvy up tasks for maximum benefit to the client and to the various firms involved. We're looking for a "win: win: win" for all the parties involved," says Stephen.
Remember the Orange slogan? "The future's bright - the future's orange"? I've always thought Stephen brought a little bit of that bright future to the profession, when he arrived from his in-house role at the telecoms company. Now of course, since its merger with T-Mobile, the merged company "Everything Everywhere" has a new slogan:
"I am who I am because of everyone."
Maybe there's a point here for the profession, about collaborating to win ...
The Story focuses around a desperate washed-up Broadway producer and his accountant and a play they design to be a flop - to avoid the scrutiny of the Revenue and oversold to investors 250-fold in the confidence they'll never have to pay out (so in fact part Ponzi scheme). You'd think that "Springtime for Hitler: A Gay Romp with Adolf and Eva at Berchtesgaden" couldn't fail to fail, so to speak. Especially with its Busby Berkley style geometric choreography with aerial shots of dancers in swastika formation. But it turns out to be a surprise hit and panic then ensues as its creators are expected to pay out to their investors.
The 1968 film won an academy award for its screenplay and is preserved in the National US Film Registry. It is one of the maddest satires of antisemitism you'll find. Delicious for this. If you haven't seen it, take a look - the 1968 film is much better than the remake or stage play.
Of course on the subject of life imitating art Jimmy Carr went one better. Check out this Youtube clip of a Carr routine where he lambasts greedy tax avoiders. First rule of reputation management anybody? That's right: it begins with the words 'people in glass houses ...'
Thank you to my twitter companions who kept me entertained on a broken down train on Tuesday evening. To stave of frustration and boredom I put out a plea on Twitter (a "twea"?) for any good jokes or other interesting distractions. I was inspired by the response.
@legaltwo kicked it off with: "Did you hear the one about the law firm that embraced technology and client focus? No, me neither ... boom boom :-)". Made me smile out loud and we went on from there.
(I hope it goes without saying that my clients and many of my friends in the legal world, being connected with such new-fangled concepts as PR, are by definition among the early adopters, in the vanguard, the exceptions that prove the rule.)
On seeing @legaltwo's offering @Louise_Restell tweeted me her latest blog post, which touches on this subject of lawyers embracing technology (or rather not). She makes an interesting point that there is a clear need for an official and independent legal advice and guidance site - similar to NHS Direct Online she suggests. The Legal Services Board found in a recent report that "the internet revolution has yet to reach legal services" (what a quote!) and this is making it almost impossible for consumers to find accurate and helpful legal information when they are looking for support. They are swamped by information and just can't see the wood for the trees. Our friends at Prolegal tell me they are exploring a legal diagnostics site. It would be interesting if they could be persuaded to share this for the benefit of all. Watch this space ...
Thanks for the company @Legaltwo, @Tucola, @aahafezi (who was the one person to urge me just to live in the moment and enjoy observing the lovely evening through the train window) @RupertWhite, @Louise_Restell, @HeatherTowns, @MEkowalski, @LexFuturus, @allaboutcosts. You were there when I needed you!