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The ‘unimaginable scenario’ facing legal teams

If law departments do not better manage the wellness and workloads of their external providers, they may soon find that those clients significantly up their prices, or even go elsewhere.

user iconJerome Doraisamy 04 October 2022 Corporate Counsel
The ‘unimaginable scenario’ facing legal teams
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In-house counsel tend, Bowd chief executive Fionn Bowd mused, to see themselves as the good guys. In many cases, this is justified, given the working environments created for lawyers in corporate gigs.

However, there needs to be a greater spotlight, she argued, on the role that those same counsel play when it comes to the holistic wellbeing, workloads, pressures and expectations placed upon the law firms contracted by businesses and organisations.

It is a tough conversation, she noted. But it is one “that we do need to have”.


Duty to better manage external providers

Speaking recently on an episode of Legal Lightbulbs, Ms Bowd said that in-house counsel “almost exclusively” come from law firms, and thus are aware of the impact of the choices that they make and the way that they run their matters.

“My view is that, as a result of having that knowledge, there is, I think, at least a moral duty for them to make inquiries of themselves and make inquiries of the firms about how their choices and their behaviours and their workflow management impacts on those firms,” she submitted.

In addition to that moral imperative, there is certainly also a business case to be made for better treatment of a department’s external providers.

“If firms are not able to keep lawyers, because the working conditions and requirements are so difficult for people to live with that they continue to leave, that actually has a significant impact on the client, that is briefing the firm, because you don’t have continuity of lawyers.”

Those lawyers, Ms Bowd said, are “constantly leaving to go in-house or they’re leaving all together”.

As a profession, lawyers generally don’t know what work would look like if enough time was designated to complete it, she said. Lawyers never give themselves, or others, enough time to get work done: “We only give ourselves the exact minimum.”

Consequences for engaging firms at the 11th hour

As a result — Ms Bowd said in agreement when it was put to her by this writer — law firms may soon reach a point where they feel they can get better treatment from XYZ company, as opposed to ABC company, and thus not take on work from certain clients.

This is, she said, the “unimaginable scenario that I think [law departments] are going to find themselves in”, she reflected.

“I think there is going to be a choice between a company that engages in very conscious and thoughtful briefing of a firm, versus a company that doesn’t, and then the company that doesn’t is going to see their work much less favourably received, and that could be reflected in different ways,” she suggested.

“So, it may not be that the firm refuses to do it, but we may start to see pricing mechanisms in place, where there is an extra fee for urgent work or a discount for work that is given the appropriate length of time to do it.”

This could be done, for example, by way of a “dickhead tax” — whereby firms could put up their prices for unreasonable time frames and then reduce them again when work is assigned with a greater lead time.

“We are going to see it because the firms are going to have to do something to help with the circumstances that they find themselves in, in terms of trying to retain people and the in-house counsel are just not going to be able to keep doing things the way they’ve always done them,” Ms Bowd said.

Change afoot

Ms Bowd pointed out that it is rare that in-house counsel would behave badly — this broader conversation is more about rethinking the systems and structures underpinning engagement with external providers.

Too often, law departments will use firms for matter management or overflow management. “When they run out of time to do something and suddenly it’s urgent, they brief it rather than having a better control of their work in the first place and working out what is going to be able to be briefed and what isn’t,” she said.

Such an exodus — or, at least, responses such as amended pricing structures, already happen in smaller law firms, Ms Bowd outlined.

In those boutiques, she said, there is more autonomy and thus willingness to discuss firing clients if working conditions are not in alignment with how the firm wishes to operate. Such boundary-setting, she said, is increasingly commonplace.

“You see it happening more and more now in the smaller firm realm, and it’s really only a matter of time before it happens in the big firms,” she said.

When it comes to work assigned to external providers, what law departments must bear in mind, Ms Bowd advised, is lawyers within larger firms are not just having to deal with work received at the 11th hour by your business or organisation — they are likely dealing with that same pressure from another firm client.

“That’s what it’s like as the supplier. On the inside, you are never not doing one of those tasks,” she said.

“Even if you don’t have one for a big client, you’ll have it for another client instead. It might not be Client A today, but it’ll be Client B. The result is, in the firm, everything is always urgent.

“Nothing ever has a reasonable time frame, and the things that do, of course, they get done quietly on the sides, but there is always this constant.”

Not all law departments

It should be noted, of course, that it is sometimes not the fault of the in-house legal team that it engages a firm and doesn’t give them much notice to complete a given task.

Often, Ms Bowd said, the in-house team itself has been given an unreasonable time frame by internal stakeholders.

As a former in-house lawyer, she mused, “I would get something the minute it arrived on my desk, I would immediately pick up the phone to my external counsel, 30 seconds later, there was no delay, there was no me sitting on it, wondering whether I’d get round to it or deciding what to do with it or whatever. As soon as I got it, I briefed it out because I knew that there was no time.”

In light of such unforeseen circumstances, on top of potential poor time management by the law department, better conversations must be had about workflow and subsequent pricing structures — including and especially different fees depending on the lead time for work allocated.

“That will create the kind of pricing choices where the clients, as in the actual corporate commercial clients, learn to manage their time better and not use the lawyer as their overflow for their own poor planning and they only give them urgent work when it’s really urgent,” she explained.

“And it allows the in-house lawyer to have the conversation about the consequences of that, when the work is urgent to them. It allows the in-house lawyer to take responsibility for their times when they use the external counsel for their own matter management and their own failure to plan.

“It will also help identify those times when it is nobody’s fault, it is just what it is, and therefore this is what the world looks like when that happens. So, unbundling each person’s role and each part of the ecosystem, and then putting it back together to work out how it can be improved.”

Fionn Bowd will be speaking at the inaugural Women in Law Forum 2022 about how she has taken advantage of the opportunities presented by the COVID-19 pandemic disruption, the new solutions to narrow the gender pay gap, and how modern firm structures could accommodate flexible working and parental leave for both men and women. It will be held on 24 November at Grand Hyatt in Melbourne.

Click here to buy your tickets to the event to hear more from Fionn Bowd and a range of other speakers! For more information, including agenda and speakers, click here.

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Fionn Bowd, click below:

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