Editor : The Legal Transformation Study (Study) looks to the state of the legal profession in 2020 AD and lists uncertainties and trends that affect planning for the future. Why did Eversheds decide to contribute to the funding of the Study and to publish a report (Report)* titled "The Law Firm of the 21st Century"?
Smith: Our firm has made an enormous journey from being a regional UK firm, to being a UK firm with a strong London office, to a firm with a strong European presence, and to what it is now, a firm with a strong international presence. Our growth reflects the trends of globalization and money moving eastward. We have no intention to open in the United States. It's a very large and diverse market and not one where we feel a need to be.
Our growth to date has been dictated by strategy. Determining our strategy going forward requires taking into account the scenarios discussed in the Study and the views of law firm partners and clients about critical issues as reflected in the Report. We have always put great store in strategy, and have always prepared strategic plans and followed those plans in a uniquely dedicated way.
The Study looks at four scenarios for what the profession will look like in the future (2020 AD), namely, Blue-Chip Mega-Mania, Expertopia, E-Marketplace and Techno-Law. After you review those scenarios, you have to make a choice among them and set sail into the future, unless the wind changes and you have to reset your course.
It's fair to say that we have decided to go with our own variant of the Blue-Chip Mega-Mania scenario - that is that there will be a highly aggregated provision of legal services to major corporations in the hands of a few mega firms, and that clients will want those firms to handle their matters in the various countries in which they operate.
Editor: What is your role?
Smith : My role is to work with global companies, wherever in the world they may be headquartered, to create a working relationship with them and our firm that will meet their needs. I do that by listening to potential clients and finding out what they require. Different clients require services customized to their needs. If you look at the Report, the introduction by David Gray, Eversheds' Chief Executive, says it all. He says that we stay ahead of the game and ensure we don't get left behind by meeting people and listening to them. This is the secret of our success.
Many things have changed in the legal world and in the world as a whole - and the world ahead is going to be different from that of the past. Every global legal practice is now facing up to a series of tough challenges. Our firm must continue to find new ways of providing greater value for clients through applying businesslike project management techniques and expanding our geographic reach. We must intensify our search for talent. We must keep the talented people we have by providing a better work-life balance.
Editor: Does the firm's strategy emphasize one-stop shopping?
Smith : Our premise has always been that we provide a full service to clients. There are certain firms that concentrate on capital markets and don't do the everyday work. We have always sought to provide a full service, from mergers and acquisitions to corporate finance to meeting the everyday needs of clients, be it employment law, commercial law, or real estate.
That was our philosophy when we first started in the UK and has remained our philosophy. We are there to serve all our clients' needs.
This philosophy is not limited to our UK offices, but applies to our other offices and "best friends" firms as well. We have set about finding full-service firms throughout the world that we could initially associate with and in time they become offices of Eversheds International. All those firms undergo exacting due diligence by the firm.
We select firms that are not only full service, but also very strong in their local markets. They must be embedded in the local culture and the local social and political environments, while at the same time having the capacity to deal with international work and, for U.S. clients, to speak English.
Editor: How do you assure that each of the offices is integrated into the firm?
Smith : Our offices have to be more than simply the flags on maps or names on the letterhead that you sometimes find with other global firms. They play an active role in providing an integrated service to our global clients. The way we do that is by constant trainin, and getting people together.
I recently chaired the meeting of our Central and Eastern European group in Prague, which had representatives from Hungary, the Czech Republic, the Baltics and Poland - all from our offices, all in one room. By bringing those people together you're able to generate common ideas and values - and then back that up with training. For example, our RAPID and DealTrack methodologies, which are our project management tools, are taught to colleagues throughout the world.
The GAMS system assures that our global clients are treated in a uniform way by each office. When one of our offices logs on to it, it must answer a uniform set of online questions in order to open or manage a file. That's backed up by internal training and protocols that assure that our clients get consistent treatment by all our offices.
Editor : There is a mindset on the part of some corporate counsel that some global firms do a good job on the more routine stuff, but if it's a bet-the-ranch case, they want a national star to handle it within a particular country. Would they find stars at your firm?
Smith : Absolutely. We just renewed our contract with Tyco for the second year. During the first year representing Tyco, we substantially moved up the food chain. We are not simply doing the routine work, but also the high-end corporate transactions. See press release beginning on this page.
The clients for whom we work on a full service basis don't want to be faced with going out and looking for a new face whenever it is necessary to handle a more challenging matter in a particular country. That is why we have carefully selected the national law firms that become part of our network of offices on the basis of having or acquiring the star lawyers in the country they serve.
If for some reason they don't have a star with the particular characteristics the client seeks, our clients feel sufficient confidence in us to ask us to help them to find the lawyer they need - and chances are that the next time a client looks for a star with those characteristics, they will find a new star in our firmament. Having stars also enables us to retain clients who are initially attracted by a star but stay with us when they realize that we offer an array of other stars backed by methodologies that assure outstanding performance.
A good example of the process whereby we anticipate the needs of clients by reaching out to satisfy their needs is the growth of our relationship with DuPont over the last ten years. Last year, Stacey Mobley, its General Counsel, in a letter referring to our designation as one of the winners of DuPont's Challenge Award stated that we were deserving of recognition for our "outstanding legal work."
We have really grown with clients like DuPont. We have done multibillion-dollar refinancing transactions for DuPont as well as other very high-end corporate finance work. This work is done both by stars recruited laterally and increasingly by homegrown talent - young lawyers that we have trained to become stars.
We are mindful of the need to offer a work-life balance that will permit us to attract and retain Generation X and Generation Y lawyers who also want to have a life apart from the office, quite a different view from that of the Baby Boomer Generation.
Editor : Can your firm adapt to the differing needs and organizational structures of its corporate clients?
Smith : For some global companies compliance is managed by the general counsel. In others, compliance is managed by a chief compliance officer. Some companies want to deal with our offices directly, while others would prefer to deal with those offices through a lawyer in our London office. We pride ourselves on our ability to adapt to the varying needs of clients.
Editor : Eversheds has elected to provide unique systems that enable clients to manage both contentious and non-contentious matters in a way that gives the client the ability to control costs.
Smith : That's right. What you are referring to is our RAPID and DealTrack methodologies, which grew out of DuPont's system of early case assessment. At the beginning of every matter, we and the client jointly consider the commercial and strategic objectives and then agree on a strategy going forward, and a budget for each phase with full cost transparency and the ability of the client to control strategy and costs throughout the process.
In RAPID, we took early case assessment to the next stage, which was to apply it not just at the start of litigation, but throughout the whole life of the litigation. In DealTrack, we applied the RAPID methodology to transactional work. Both involve scoping with the client the work that needs to be done. We itemize the work to be done by us and by in-house counsel on an Excel spreadsheet and then arrive at a prediction of the total cost of Evershed's services.
In scoping the work, we and the client are able to find opportunities to reduce costs. This may be by having the clients' law department assume responsibility for some of the work. Other opportunities may emerge. In an M & A transaction, for example, due diligence costs may be reduced if it turns out that the client is only interested in potential deal breakers above $5 million.
In predicting costs, we can look at other similar matters that we have handled, which we track through our ELITE system, which enables us to not only to compare costs, but also to recapture lessons learned from earlier assignments.
Editor : The Study seems to infer that there are clients that say, "We have to win this case at any cost; money is no consideration, spend anything you want but win." What's your answer to that?
Smith : Most general counsel are under pressure to control costs even in the bet-the-ranch-type cases. We make it possible for general counsel to have their cake and eat it too. With us they can get the job done by the finest talent backed by whatever resources are required and at the same time be in a position where there is complete transparency with respect to cost.
We have found that there are large corporations that have a general counsel who operates with little or no legal staff. Such general counsel appreciate our ability to predict and track costs and to prudently manage the matters assigned to us.
Editor : Is the firm alert to opportunities to improve its performance?
Smith : On major pieces of litigation and major transactions, we will always sit down with a client to talk about how we could have improved our handling of the process. Even though it is difficult at times, we also share with clients our observations about the way they handled their side of the process.
In terms of the metrics, one of the most important tools is "heat" mapping. It's essentially looking at a company's legal spend by country or by practice area or business unit - or however you want to slice and dice the information - to identify on a monthly basis the top areas of legal spend. This enables us to work with the client to identify the highest areas of legal spend and then to look for ways to reduce that spend.
Once a year and sometimes more frequently, one of our partners who has had no previous relationship with a client will visit that client to get a sense of how the client feels about the work that we have performed and how it feels about the firm generally.
Editor : You recently received an award from CPR with respect to the use of ADR.
Smith : That's right. ADR is an important part of our RAPID methodology, which involves continually reviewing with the client what pathways should be followed to achieve the best practical outcome. Obviously ADR may be one way of resolving the case, rather than going to full-blown litigation.
Editor: Do you provide a single electronic bill to clients representing input from the various offices that might be involved in a matter? What kind of detail is provided?
Smith : Yes, we do. With a lot of U.S. clients, it's one bill in U.S. dollars. We use the Tymetrix system modified to meet the needs of our global clients for detailed matter management information.
Editor : I gather that the firm is dedicated to creating a diverse workforce in each of its offices.
Smith : Obviously the demographics and the dynamics are different from that in the U.S. For our firm, diversity is having at all levels in your workforce people who reflect the demographics of the total population rather than just having people from a very narrow spectrum of society. That is our goal throughout our global network of offices.