1) A N E W Y O R K L A W J O U R N A L S P E C I A L Law Firm Management R epor t www. NYLJ.com MONDay, MAY 9, 2016 The Full-Service Client Partnership Model: A Primer for Law Firms By Michael R. Caplan Michael R. Caplan is chief operating officer of Goodwin Procter. He previously served as global chief operating officer for the legal department at Marsh & McLennan and global director of operations for the legal department at Goldman Sachs. BIGSTOCK T he billable hour. Competition from unexpected sources. A consolidating industry. The market for legal services has shifted in fundamental ways, and its evolution presents challenges for law firms. But change also offers opportunities. Law firms today need to think differently, and importantly in this market, look to differentiate themselves. The client/law firm relationship is constantly changing. Clients are increasingly focused on firms who “invest” in their risk and their business. Those who invest will master these relationships institutionally and will stand apart. Some suggest that great work at a competitive price is all that clients want from their law firms. All AmLaw 100 firms do great work, but great work is not a differentiator. Price is also not a differentiator. The key differentiator is something law firms talk about all the time but rarely master—a true strategic relationship with clients. It sounds simple, but aligning this relationship—the priorities of lawyer and client—is essential for any firm that hopes to succeed in today’s market. When law firms treat client relationships as strategic partnerships, flexibility, transparency and communication are paramount, investment in risk and reward is shared, and all firm resources are leveraged for the client’s benefit. Only then does the relationship grow and prosper. In the current market, law firms need to manage client relationships by providing advice through two key sources: traditional lawyering, 

2) MONDay, MAY 9, 2016 or the practice of law, and through legal operations, or the business of law. Lawyers are the primary resource for their clients, but a firm’s professional staff—its operations, pricing, technology, knowledge management, human resources and marketing experts—can be an untapped source of value, and proactively sharing their expertise with clients (delivering non-legal services) is essential to broadening and deepening the law firm/client relationship. Combining the practice of law with the business of law allows firms to provide clients with a full-service offering and a strategic opportunity to collaborate and innovate as partners. This full-service client partnership model can manifest in several ways. Sharing PMO Strategies. Corporations have long relied on their program management offices (PMOs) to tackle large-scale technology projects and other key initiatives. Law firms are starting to realize the value of PMOs as they manage multimillion-dollar initiatives for data security, technology, space, cloud infrastructure and ongoing legal matters. Corporate legal departments face the same project management demands around people, budgets and deadlines for IT and other projects. Firms and in-house legal departments need more efficient ways to manage risk and optimize their data, and PMOs offer a welcome resource for organizations looking to complete projects in a timely and cost-efficient manner. Establishing a PMO begins by developing a set of standardized processes for all projects to ensure consistency across reporting, resourcing, timing and budgeting. With a standard methodology in place to manage projects, prioritize objectives and create best practices, organizations can bring more efficiency to each project, manage costs and ensure consistent alignment with evolving needs. Law firms and corporate legal departments have similar PMO processes and challenges, and sharing best practices to promote operational efficiency and consistency can help drive a relationship from client/service provider to a There is no magic bullet that guarantees success, but the cornerstone for all fee arrangements is trust. Trust is essential during both the development and execution phases. more strategic partnership. It can also lead to a greater understanding of a client’s businesses, goals and pressure points. Firms whose professional staffs are working with clients to help establish PMO plans and solutions are thinking proactively and differently. Consulting on Operational and Technology Support. Enterprise legal management (ELM), the practice management strategy of corporate legal departments, uses software to manage internal legal documents and workflows, generate electronic bills and invoices, and guide decision-making through reporting and analytics. When a company needs help with legal operations and technology, calling its law firm is rarely the first choice, or even the second. But given the similar market challenges firms and legal departments face, law firms have a significant opportunity to add value for clients by proactively sharing knowledge and offering support in this area. This can take many forms, such as helping with a vendor analysis for e-billing, or advising on matter, knowledge or document management, or assisting with the development of outside counsel billing guidelines. Law firm pricing managers, IT managers and COOs are ideally positioned to help clients with IT planning. This can include consulting on RFPs, providing roadmaps, introducing clients to other clients with similar goals and/or to those who have already implemented comparable systems and technology. And firms can help with templates and process throughout. Creating Best Practice Panels for Outside Counsel. One of a legal COO’s primary challenges is to articulate his or her department’s value in business terms to the company’s CEO, CFO and other leaders. As a result, legal COOs are always eager to hear about ways to increase efficiency and cost control in their spend for outside counsel. Facilitating introductions to their peers by arranging panels, meetings and other gatherings gives legal COOs the opportunity to discuss needs, share best practices and consult with those who might have already encountered (and solved) a particularly vexing issue. The information and knowledge imparted at these events can help legal COOs navigate the ELM sector, make strategic investment 

3) MONDay, MAY 9, 2016 decisions, and help their organi- law). Goodwin hears consistently zations evolve to the next level. from clients on the value of this Most important, though, the law approach: firm organizing events like these •  ati Gill, Global Legal COO and M is helping the client’s legal COO be Senior Director of Government successful in his or her job. This Affairs at Teva Pharmaceuticals: creates a deeper bond with the Legal technology platforms have client and leads to a strengthened become critical enablers for correlationship. porate legal groups in global Sharing Risk/Reward Investcompanies. Having a partner ment with Clients. Alternative with an intimate understandfee structures, like the traditional ing of our business needs is of billable hour arrangement, are extreme value for Teva Legal about more than just price. Any Group. Goodwin Procter helps fee arrangement should involve us navigate the multiple offerings shared risk and reward, detailed available on the market—billing, project management and advance matter management, document planning, closer alignment between review, etc. They advise on prolaw firms and clients on goals and cesses, vendor selection and objectives, and consistent two-way overall implementation. Led communication. by Chairman David Hashmall, Partnered investment in risk/ Goodwin Procter is an important reward for law firms means proacpartner. COO Michael Caplan tively pitching it to clients rather brings indispensable corporate than passively responding to it. It is experience and sees applicable work that needs to be done together, solutions through our eyes—a with full transparency and as part tremendous help to integrating of a trusted advisory relationship. the right platforms and customThere is no magic bullet that guarizing them to our needs. antees success, but the cornerstone •  avid Allen, Senior VP and DepD for all fee arrangements is trust. uty GC at MassMutual: Trust is essential during both the Firms that focus on operational development and execution phases. aspects of their relationships It ensures a win-win engagement with corporate clients are differthat incorporates the interests of entiating themselves. For years, both client and law firm, and results MassMutual and Goodwin Procter in value and predictability. Strategic have worked closely together on alignment, accurate scoping, active transactions, litigation and divertracking and matter management, sity initiatives. Recently, the relaand consistent and timely commutionship has been enhanced as nication are also critical. a direct result of both entities’ These are just some of the ways concentrated efforts on effiGoodwin Procter is engaging with ciency. Quite simply, Goodwin clients to provide a full-service demonstrates that they “get it” approach that leverages both by empowering their COO, Mike lawyers (the practice of law) and Caplan, to build the operational professional staff (the business of bridge with their clients by partnering and consulting on new challenges in the rapidly evolving legal service delivery model. This places the firm at a strategic advantage in terms of our selection of counsel. •  arren Guy, Global Legal COO D at McGraw Hill Financial: Goodwin’s ability to collaborate in the legal operations space only enhances their overall effectiveness as a complete legal services provider. They remain excellent partners to us. The benefits accruing from the full-service client partnership model also include enhanced business development efforts, increased collaboration among a firm’s attorneys and professional staff, and, as a result, a stronger institutional culture. Law firm partners will always lead the client relationships and business development work, but the smart ones know that the folks on the assembly line putting on the tires are just as important as the people selling the car. If the tires are not on right, the salespeople and the organization are going to suffer. And for law firms looking to succeed in today’s market, full-service performance for clients is truly where the rubber meets the road. Reprinted with permission from the MAY 9, 2016 edition of the NEW YORK LA JOURNAL © 2016 ALM Media Properties, LLC. All rights reserved. Further W duplication without permission is prohibited. For information, contact 877-257-3382 or reprints@alm.com. # 070-05-16-12