Challenges Of The Future Law Office - Bringing Client Service Closer To Client Needs Better addressing the broader needs of internal clients will continue to be a priority for in-house counsel.

Saturday, October 1, 2005 - 01:00

Charles A. Volkert
Robert Half Legal

At its best, the practice of law has always been about serving the client's needs. But as lawyers' roles and duties have evolved, the gap between the type of service that attorneys provide and the actual needs of clients has widened. Recognizing this, both law firms and corporate legal departments have recently been devoting considerably more time and effort to enhancing the quality of client service.

Future Law Office 2005: Client Service - Challenges and Strategies, the most recent white paper in Robert Half Legal's ongoing research project, examines key trends and developments in the legal profession. According to our research, the push to improve client service levels is likely to continue to command attention in the future. In-house counsel are responding in a variety of ways that allow them to better serve executive management and other internal clients.

Combining Legal And Business Advice

While recent years have seen increasing specialization among lawyers, this has not come without a price. As their focus has narrowed, many attorneys have lost much of their traditional panoramic business perspective. As a result, a growing number of law firm clients as well as internal corporate clients say they are no longer receiving practical advice that takes into consideration their legal needs as well as the unique realities of their business and industry. Our research shows they want attorneys to provide a combination of legal counsel and business guidance.

Corporate legal departments are addressing these needs by striving to better understand the business side of their companies. This involves gaining a deeper knowledge of their organizations' history, culture, industry, competitors and current challenges.

Many general counsel now encourage attorneys to make site visits to various law offices or locations to build relationships with selected company managers throughout the enterprise. Asking questions about a business unit's operations and even attending routine meetings offers lawyers a feel for a division's major priorities and needs. This knowledge allows them to make insightful analyses and offer helpful recommendations.

Some departments are restructuring to better accommodate client needs. They may designate a single "client service" representative who coordinates services and ensures that legal work is assigned to the appropriate attorney or practice group within the company. Multi-national companies that employ a large number of attorneys frequently base lawyers specializing in distinct practice areas in geographically dispersed company offices rather than centralizing them in a single location.

Supporting Regulatory Reform

Nowhere has the growing need for enhanced service been more pronounced for corporate legal departments than in their support of regulatory compliance. As legal departments of both public and private companies assist their companies in complying with governance mandates, most notably the Sarbanes-Oxley Act of 2002 (SOA), in-house counsel have sharpened their focus on process, procedure and ethical rigor.

In-house counsel are contributing to compliance efforts by establishing ethics oversight boards, protecting "whistleblowers" and amending the company code of conduct. They also are playing key roles in handling an increase in regulatory inquiries, investigations and litigation resulting from the legislation.

Corporate governance issues will continue to be a central issue for legal departments in the future as compliance is ongoing. Lawyers with private companies and nonprofits also are paying close attention to accounting regulations. As SOA becomes the benchmark against which every company's financial reporting, disclosure and corporate governance practices are measured, many of these organizations are implementing similar procedures even though they are not yet required to do so. In some cases, this is in response to pressure from outside stakeholders, including industry regulators, lenders, insurers, government entities and accountants for proof of sound internal controls.

These ongoing regulatory needs are yet another reason in-house counsel will continue to redefine their relationships with other departments in their companies. In fact, legal departments will likely become centers of ethical leadership as they institutionalize compliance initiatives, many of which are still informal.

Requiring More From Outside Counsel

Corporate counsel today look to their law firms for more than just specific advice about discrete legal matters. They want broader, more strategic business guidance.

For example, as corporate clients continue to send business functions offsite to domestic or overseas vendors, they will turn to outside counsel for guidance in properly setting up and managing these contractual relationships. As a result, many law firms are expanding their service offerings to include outsourcing-related law. Legal departments expect outside counsel to work throughout the life of an outsourcing agreement - which can last up to five years - to continually protect the company and arrange a solid working relationship with the outsourcing vendor.

Lowering Departmental Expenses

For most corporate legal departments, offering effective client service includes keeping a tight control over the cost of their operations. Even though some companies are expanding in response to improved economic conditions, many in-house counsel continue to be under tremendous pressure to cut costs and conserve resources.

At the same time they are expecting more of outside counsel, some departments are addressing the need to reduce expenses by consolidating the number of law firms they use and retaining more work in-house. To prevent resulting workload bottlenecks and avoid staff burnout, more and more departments are bringing in project legal professionals for special projects and litigation. Project attorneys may be brought on board to help conduct patent research or due diligence; to assist with an employment termination suit or an intellectual property dispute; or to work on the legal aspects of business expansion into a new region or market. An independent project attorney might also be called in to temporarily fill a vacant position while the company searches for a full-time employee, or to handle the duties of an employee on an extended leave of absence.

Just as other areas of the company send business functions overseas, legal departments also are outsourcing or "offshoring" certain tasks in order to reduce costs. Initially, companies sent commodity functions, such as document editing and proofreading, to foreign providers. But as domestic labor costs increase and budgets shrink, the definition of "commodity" work is expanding in some areas to include intellectual property work and litigation research. Outsourcing is not always the best option, however. Factors that lessen its appeal include set-up fees and security costs, as well as quality control and other infrastructure issues.

Attorneys were asked, "For which of the following might your law firm or corporate legal department use project lawyers"? Their responses:*

To work on large projects that require more resources than currently exist - 70%

To work on cases requiring a specific type of expertise - 51%

To fill in for full-time lawyers who are on extended leaves - 37%

To reduce costs associated with case work, trial preparation, etc. - 34%

To evaluate an attorney for a full-time position - 24%

Other circumstances - 1%

None/do not use project attorneys - 15%

* Participants were allowed more than one answer.

Source: Survey of 200 attorneys among the largest law firms and corporations in the United States and Canada. The survey was commissioned by Robert Half Legal and conducted by an independent research firm.

Attracting And Retaining Top Talent

For corporate legal departments, a pivotal factor in enhancing service levels is building a team of the most skilled attorneys and support staff. To meeting growing workload demands, corporate counsel are focused on recruiting and retaining the industry's best talent - legal professionals who can assume increasing levels of challenge and responsibility. In an era of global competition, rapidly changing practice areas, increased mobility and greater emphasis on work/life balance, this task is more challenging than ever.

Compensation is critical, of course, but departments must also create an attractive workplace culture if they expect to attract and keep the most highly skilled professionals. Legal staff prefer law offices that emphasize professional development through such avenues as in-house training, continuing legal education and mentoring programs. In fact, attorneys polled in a recent Robert Half Legal survey cited advancement opportunities, professional development and training, and flexible work schedules as the three best ways to motivate and retain legal teams. Compensation or cash bonuses were ranked significantly lower by survey respondents.

Attorneys were asked, "Which of the following incentives, both monetary and non-monetary, do you feel are most effective for retaining and motivating your best workers?" Their responses:*

Advancement opportunities 86%

Career development or training 83%

Flexible work schedule 75%

Non-cash recognition 57%

Stock options or other equity bonuses 56%

Spot bonuses 43%

Good culture/work environment 7%

Competitive salaries/higher pay 6%

Annual cash bonus 6%

Nature/challenge of work 5%

Benefits package 3%

Effective management/mentoring 3%

Other 3%

*Participants were allowed more than one answer.

Source: Survey of 200 attorneys among the largest law firms and corporations in the United States and Canada. The survey was commissioned by Robert Half Legal and conducted by an independent research firm.

Some departments are offering alternative work arrangements, such as part-time or flexible hours, to address employees' growing desire for a better work/life balance. A survey conducted by the National Association for Law Placement showed that 96 percent of firms make part-time arrangements on either a case-by-case basis or as affirmative policy.

Other creative policies vary from department to department and range from such incentives as childcare at reduced rates and a more liberal vacation policy to the ability to volunteer for company-sponsored civic and charitable activities. Many organizations stress participation in case and project teams and boost morale by making sure individuals in every role know they are critical to the success of the department.

In the coming years, raising service levels will continue to be a priority for both law firms and corporate legal departments. For in-house counsel, this will revolve around supporting regulatory reform, offering more business-oriented advice and attracting and retaining the right staff to help them ensure internal clients receive the attention and legal assistance they require in a timely manner.

Charles A. Volkert, Esq. is executive director of Robert Half Legal, a leading staffing service specializing in the placement of attorneys, paralegals, legal administrators and other legal professionals with law firms and corporate legal departments. Based in Menlo Park, Calif., Robert Half Legal has offices in major cities throughout the United States and Canada. This article is based on Future Law Office 2005 - Client Service: Challenges and Strategies, the most recent body of research of Robert Half Legal's Future Law Office project. This ongoing project examines key trends and developments in the legal profession. For a free copy of the comprehensive white paper, please visit www.futurelawoffice.com or call 800-870-8367 to contact the Robert Half Legal office nearest you.