Corporate counsel look for help from specialists
Published: April 27, 2012
Tags: Corporate Counsel
Corporate counsel may not need to be wined and dined by law firms seeking their business.
But they do like meat and potatoes, in the form of substantive reasons why a particular lawyer will help them solve a problem.
In-house lawyers shared tips for wooing corporate clients at VLW’s Business and Law Breakfast Forum in Richmond on April 25.
The companies represented have in-house staffs of generalists adept at handling routine real estate, employment and compliance matters, but turn to outside counsel for special expertise.
Law firms should look for ways to show they understand the industry and regulatory environment in which a particular company operates, panelists said.
“Expertise is number one on my list,” said Steven Edmonds, General Counsel for NewMarket Corporation, based in Richmond. The Fortune 1000 business is a holding company for Afton Chemical and Ethyl Corporations, who develop technology and products that improve fuel performance. They sell globally and needed export control counsel.
It’s a highly specialized field, and the company interviewed six or eight law firms, “some of the best in the world,” Edmonds said. He was looking for something more than a generic, we-can-do-it-all pitch.
“Full-service firm” is the modern marketing mantra, but corporate lawyers have to try and pierce that veil.
“Everybody says they can do everything,” Edmonds said, but “don’t try to be something you’re not.” He wants to know “who’s going to be on the team, not just the partner in charge,” and what specific expertise each team member brings.
“I’m looking for an expert legal team, not an entourage.” Edmonds said.
“None of us are looking for gifts or entertainment. That’s absolutely no use in this process,” Edmonds said.
The corporate lawyer may wish he could assemble his own team, like a “fantasy league” law firm, and pull in this pitcher from this firm, and that batter from that firm, according to Eric Margolin, General Counsel for CarMax, a Fortune 500 company based in Richmond.
Chris Lagow is Deputy General Counsel for Norfolk-based Portfolio Recovery Associates, one of Forbes’ Best Small Companies. As a company that buys and manages consumer accounts receivable, PRA faces “a lot of scrutiny by state and federal regulators of all colors and stripes,” and its in-house lawyers “tend to be generalists who focus on compliance,” Lagow said.
They also get hit with class-action lawsuits, which attract attention from outside lawyers. The law firm brochure with the solicitation on firm letterhead, saying “I see you were sued,” and “I can help you,” doesn’t make much of an impression on Lagow. By the time he gets that pitch, he’s probably already at least a week into a relationship with another firm.
“I look for smart, and I look for normal,” Lagow said. That means not only is the outside lawyer clicking with the in-house lawyers, he also is able to work with the company’s business people.
“The call you don’t want is, ‘how in the world did you hire this guy?’” coming from your non-lawyer colleagues, Lagow said.
“Competency attracts,” said Kathleen Argiropoulos, General Counsel for Airlines Reporting Corporation, but it’s “customer service” that keeps clients.
A private company, ARC serves the airline industry. It has a “data warehouse” with 2.5 billion units of transactional data, that allows the company to answer questions like when’s the best time to purchase an airline ticket.
Argiropoulos said she has one law firm that handles much of ARC’s outside work. The partner in charge takes responsibility for delivery of the product and actively solicits feedback from her corporate client on how to meet ARC’s needs.
Communication about billing is a common test of the relationship with outside counsel. Hourly billing still predominates, panelists said, although several have experimented with alternatives, such as premium payments for successful outcomes and discounts for lesser results.
“The timeliness of bills is becoming more important, as we’re trying to close out books faster and faster each month,” Argiropoulos said. “When we see things to challenge, how you respond makes all the difference.” A recent bill from a law firm in Brussels seemed unusually high, even after the Euro-to-dollar conversion. When questioned, the billing lawyer quickly realized the billable was for a different client altogether.
“But if you’re constantly challenging the bill from the lawyer, there’s probably a disconnect,” said Margolin. The in-house lawyer may be willing to have a conversation with the outside lawyer in order to “reset expectations,” or just “consider voting with your feet.”
A law firm can score points by using its lawyers to offer substantive legal education to in-house counsel. Edmonds cited a law firm that developed a two-day conference aimed at general counsel in the chemical industry. The first conference attracted 10 or 20 GCs, but buzz about the program drew 30 GCs this year.
“You’re providing something we want,” Edmonds said.
Virginia Lawyers Weekly’s next Business & Law Breakfast Forum is set for Sept. 13.
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