Developing A Value-For-Services "Litmus Test": Applied Discovery And The ACC Value Challenge

Monday, May 2, 2011 - 00:00

A few months ago, Applied Discovery made a convincing argument to general counsel to re-evaluate their service providers based on the tenets of the Association of Corporate Counsel's Value Challenge. The Value Challenge, launched in 2008, has fostered discussions among clients, law firms, and service providers to realign legal costs with the value received by the client. The Challenge is based on the concept that law firms and service providers can greatly increase their inherent service value by improving costs, tightening efficiencies and promoting transparency, all the while maintaining strong profitability. A provocative premise, the Challenge urges law firms, service providers and legal departments alike to fundamentally rethink their relationships based on the value their clients ultimately receive.

When chosen as the ACC's exclusive alliance partner for electronic discovery in October 2010, we realized that our own internal commitments were already aligned with the Challenge and have worked with the ACC to promote the value-based premise as much as possible. Along these lines, when the ACC created the "Covenant with Counsel" - a list of promises that clients and outside counsel can make to each other to structure their relationships in alignment with the Value Challenge - we saw an opportunity to further the vision with our own response. On April 11, 2011, we proudly announced that Applied Discovery fully supports the ACC Value Challenge and its goal of better aligning legal cost with value. As such, we are the only discovery provider that has unilaterally pledged to uphold the ACC Covenant with Counsel in all matters.

Based on the fact that the ACC Covenant was originally written for law firms, our team has made a few small adjustments to the original document to better suit a vendor perspective. By way of example: "Understand that you seek neither elegance, new law, nor perfection unless these provide value," when translated to a service-provision perspective, becomes "Understand that our clients do not seek novel technology or processes for their own sake, but to achieve value consistent with their objectives." Translated, this means that we promise not to fall into the trap of using new technology simply because the novelty is interesting to us; on the contrary, we employ and improve existing tools as a baseline, implementing new technologies judiciously as needed.

Our full list of Covenant-based, provider-specific commitments are as follows:

1. Learn our clients' business and strategic objectives and apply that understanding to their matters.

We understand that the value we provide is not in the amount of work we do, but in our ability to help our clients achieve their objectives. We commit to making sure we understand those objectives and keep them in mind during every project.

2. Give honest feedback on whether objectives in a matter are realistic and attainable.

We understand that our clients rely on us to advise them on what can be achieved, how quickly, and at what cost. We commit to helping our clients set achievable and realistic objectives.

3. Use the most appropriate staffing and tell our client if we don't have the needed expertise.

We understand that our clients are best served when we apply the right staff to each task. We commit to providing the appropriate level of experience at every step.

4. Designate one professional to serve as our relationship manager whose time will not be billed for this role.

We understand that our clients need an advocate and the ability to communicate with a resource they know and trust. We commit to always providing that resource at no charge.

5. Proactively offer value-based alternative fee structures.

We understand that not all matters are alike and that clients prefer to be billed on a basis that makes sense to them. We commit to providing numerous pricing models and creating new ones as necessary.

6. Provide budgets and estimates for specific engagements up front and advise immediately if there may be any material changes.

We understand that clients need predictability and do not like surprises. We commit to flat-fee pricing wherever possible and to providing easy-to-understand budgets and regular updates in all instances.

7. Understand that we are responsible for our budgets and estimates and that our experience forms a basis for accuracy.

We understand that our clients count on us to understand what our projects will cost. We commit to working hard to be as accurate as possible with our estimates at all times.

8. Seek to reduce our costs creatively and constantly and share those savings with our clients.

We understand that our clients are under cost pressure at all times. We commit to finding efficiencies and cost reductions wherever possible and sharing the benefits with our clients.

9. Understand that our clients do not seek novel technology or processes for their own sake, but to achieve value consistent with their objectives.

We understand that, while using innovative technology can help our clients, it is not its own end. We commit to only recommending or using new technologies to help our clients achieve their own objectives more efficiently, effectively and/or cost-effectively.

10. Train our staff efficiently and effectively without imposing additional and unwarranted costs.

We understand that having the best professionals in the business is our responsibility, not our clients' responsibility. We commit to provide the best training possible to our entire staff at our own cost.

11. Never reinvent the wheel: we will look first to past work product and encourage efficiency and continuous improvement.

We understand that reusing work product and leveraging tried-and-true processes is often the best way to achieve objectives in the shortest time and at the lowest cost. We commit to leveraging past work while continuously improving our processes and technology.

12. Discuss any client or issue conflicts with our clients up front.

We understand that our clients expect trustworthiness. We commit to being up front about any conflicts and working to resolve them as quickly and painlessly as possible.

13. Use technology to our mutual benefit, including billing.

We understand that using technology is often the best path to achieving our clients' objectives and also often the best way to simply communicate billing information. We commit to leveraging technology to the extent possible.

14. Meet deadlines and keep in touch.

We understand that our clients face firm deadlines and require frequent updates. We commit to doing whatever is necessary to meet all deadlines and communicating regularly about all project matters.

15. Commit to pro bono and diversity activities.

We understand that our clients value charitable activity and diversity. We commit to participating in activities that serve our communities and promote diversity.

16. Work hard to retain and reward personnel who embrace these concepts, and ensure every employee walks this talk.

We understand that having the best professionals in the business is our responsibility and that our clients benefit the most when they all commit to providing value. We commit to ensuring that all personnel work hard to fulfill all our value-related commitments at all times.

In addition to upholding these tenets, Applied Discovery takes the Challenge a step further in proposing that clients should establish their own value-for-services litmus test when assessing e-discovery vendors. This means outlining specific criteria ("manages projects start-to-finish," for example, or "clearly communicates expectations and cost projections at the outset," "has flat pricing and flexible billing," etc.) and gauging vendor responsiveness. Vendors aligned with the core premise of the Challenge will respond positively. For ourselves, we have come to define value as partnering with clients to achieve their objectives, with thorough cost assessments and efficient project management as methods for aligning cost with value at the very onset: in the bidding stage. Within this framework, we prioritize clear communication with our clients as a means of establishing expectations, work flow and key priorities, as well as managing staff matters and technological processes, both in the bidding process and initial stages of a project.

The ACC Value Challenge was born of clients' increasing awareness that billing should be based on value received, rather than hours billed, a fact that resonates most in a recovering economy. It is the Challenge's premise that service providers need to realign their focus to first understand the client's overall objective in order to then determine the most effective way to reach it even if it means fewer billable hours to do so. In the case of e-discovery, in some matters, discovery is highly strategic and an important element of the case. In others, e-discovery is simply the process that the client must go through as a party to the litigation. Sometimes cost is the most important element; sometimes it is speed. Sometimes it is crucial to see if there is a smoking gun as part of an early case assessment; sometimes the only goal is fulfilling production requests defensibly enough to avoid sanctions. In all cases, our promise is to work with our clients to understand their objective, determine the most effective way to reach it and then execute. It is the Applied Discovery premise that this approach creates an inevitable win-win: more efficient, focused efforts on the part of the provider, and better, cost-effective results for the client.

In closing: Applied Discovery unilaterally commits to uphold the ACC Covenant with Counsel in all matters. We challenge our current and future clients to establish their own "litmus test" criteria when assessing vendors, and fully commit to upholding our pledge in our working relationships with you in the present and future.

Jon Resnick is an Attorney and Worldwide Vce President Field Operations and Marketing at Applied Discovery, a division of LexisNexis. He oversees the largest client development and data collection and forensics consulting team in the e-discovery industry. Joshua Kubicki is the Senior Director for Legal & Corporate Practices at Applied Discovery, a division of LexisNexis. Mr. Kubicki's expertise is legal project management, legal services unbundling and supply chain management and the overall integration of business and technology with legal practice and process.

Please email the authors at jon.resnick@applieddiscovery.com and joshua.kubicki@applieddiscovery.com with questions about this article.