The head of legal at NRMA Motoring & Services has called on law firms to drop the hard sell and listen to in-house lawyers more.
Paul Rogerson, who left his role as the head of compliance at Westpac to join the NRMA earlier this year, told the LexisNexis Practice Management Conference in Sydney yesterday (24 May) that law firms need to spend less time "cross-selling", which involves one private practice lawyer talking up the capabilities of their firm in other areas and attempting to get more work, and spend more time listening to client concerns.
"Find out from the client what is front of mind for them, and suggest how you can potentially solve those issues," said Rogerson. "Rather than saying, 'You can deal with Fred over here, he is a fantastic M&A lawyer, and you can deal with Mary over there, who is a fantastic litigator'.
"If you are trying to sell the client something, what your client is hearing is 'why? Why are they trying to sell me something that I don't necessarily need or want?' Find out from your client what they want or need, and see how you can meet that need for them."
When Rogerson asked the audience of mainly private practice lawyers if they engaged in it, many audience members nodded, with Hunt & Hunt partner and chairman Maureen Peatman stating "we are all asked to do it", and then agreeing with Rogerson that it doesn't work very well.
Rogerson, who has extensive in-house experience in the banking and finance sector with previous roles with ABN Amro and the St George Bank prior to joining Westpac, said that law firms have a much greater opportunity to put the client first when compared to large retail banks, because they have significantly less clients to please.
"Banks always talk about putting the customer at the centre of everything that they do," he said. "When you have 10 million customers, you can't possibly be fussing over all of them."
Rogerson related the story of when he was at ABN Amro, a well known national law firm would call him or a senior member of the in-house legal team, asking if there was anything they could be working on for them over the weekend. He said this practice gave it a distinct advantage over its rivals.
"Every Friday afternoon they would ring you up and wrap up the week about where the matter was at, and if there was anything else that you wanted done over the weekend," he said. "They were happy to do it, because they got paid for it.
"It was that sort of level of client care, and they are all indoctrinated to do this, that gave this firm a very positive vibe and distinguished itself from its two main rivals. I have several friends who are all in-house counsel, and they have all responded favourably about this firm's practice [of calling on a Friday afternoon]."
With his legal team at NRMA currently going through a tender process, Rogerson said it was the value of relationships, not how many awards a firm has won or the quality of its work in areas that might not be relevant to the client, that was a key point of differentiation as he went through the process of selecting which external legal advisers to use.
"I was staggered by the amount of lawyers one firm put forward, and they told me all about the wonderful things they have done, and how certain lawyers were in Chambers Top 500 for this, that and the other, " he said. "I was thinking, 'Why do I need to have 15 lawyers?'"
He went on to make the point that many in-house counsel are wary of firms that big-note their lawyers in an over-the-top manner.
"Many of these lawyers are the desperate and dateless, looking for things to do, and they think they can possibly pick-up a bit of work and make a bit of money," he said.
"But the truth of the matter is, that doesn't cut it... All of your competitors have those sorts of people, so what makes you different from anybody else?
"What can make you different is the quality of the relationship."
Beware the "time lord partners"
Rogerson spoke about the need for law firms to offer alternative billing arrangements to clients. He relayed a story about when he was at the St George Bank and had engaged a firm that "they needed to be tough on" for a fixed fee of $60,000 for a particular piece of work.
"If they do it for $20,000, [the firm] they still get $60,000, because what we are buying is their expertise, and I am happy to pay $60,000," said Rogerson. "I used to watch the bill come in every month, and I could see how things were rounding up, because the special counsel would charge for two hours' worth of work, while the supervising partner was charging for 2.5 hours to review the advice.
"This led me to conclude that either the general counsel should be fired, or the partner was what in-house counsel would describe as a "time lord" - someone who can turn five minutes into five hours without any trouble."
Rogerson said that under this fixed-fee arrangement, he noticed that those sorts of exorbitant costs would diminish over the duration of the project being worked on.
"This sort of thing happens all the time, and I didn't really care, because we would remind them they were chewing through the billable hours at a great rate of knots, and you are more that half way through the cost [$30,000], but not halfway through the task," he said. "So be careful, because when you get to $60,000, we are not paying another penny."
* Lexisnexis publishes Lawyers Weekly