When it comes to deciphering what the term “value” means to a client and an attorney, both the experience and the cost of providing a legal service are essential to defining the term.
That’s according to a few firm leaders who addressed the significance of providing valuable legal services at a conference hosted by the Illinois Supreme Court Commission on Professionalism on Thursday.
The second annual Future Is Now conference, which was attended by nearly 500 people and held at the Art Institute of Chicago, centered around themes of impending changes in the legal profession, including the future of technology, diversity among other changes.
Two of the 10 speakers at the event — Josh Kubicki, chief strategy officer of Seyfarth Shaw LLP and Nicole Auerbach, founding partner of Valorem Law Group LLC — shared some of their insights on how the way firms work, and how they bill for that work, will continue to change.
Kubicki and Auerbach gave talks addressing different “values” in the legal profession; Kubicki weighed in on what it takes for a firm to deliver a good experience for a client, while Auerbach shared her firm’s story of offering alternative fee arrangements when it was largely unheard of nearly 10 years ago.
At the time Auerbach and three other partners left their jobs at large law firms to form the Valorem Law Group in 2008, the group’s vision of launching their own firm was to offer alternative fee arrangements as an alternative to billable hours. At the time, she said, it felt like they were “all alone in the environment.”
In the nearly 10 years since the group began pursuing that vision, Auerbach said, the firm has had no trouble finding clients who were looking for an alternative to the billable hour.
Their vision didn’t catch on quickly outside their firm, but rather moved at a snail’s pace, she said. However, Auerbach noted, even a snail moves.
“If you look at the websites of pretty much every large law firm, midsize law firm and a lot of the smaller law firm and you look to see if they say they do alternative fee arrangements that in fact you will see that they do,” she said.
Auerbach cited a BTI Consulting Group report that showed that in 2015, $21 billion of legal spending used alternative fee arrangements, which was up from $12 billion in 2012.
Looking ahead, Auerbach said, she thinks alternative fee arrangements are here to stay and will move at more than a snail’s pace, in part because of the demands of future generations of attorneys. In particular, Auerbach cited Generation Z, those born in the mid-1990s to early 2000s who are not yet in law school, who she said will have a low tolerance for “things that don’t match their desired lifestyle.”
One of those things, Auerbach theorized, will be the time pressures that the billable-hour model puts on attorneys.
“Everybody knows that when you have somebody who has more and more things to do on their plate and they want to successfully do it, they have to learn to be more efficient … and they have to learn to be more creative, but the problem with the billable hour model is that it doesn’t reward efficiency or creativity, it actually, I would argue, punishes it, because only more hours harness more revenue for the law firm. Being efficient will only reward you with getting more work to do,” she said.
Auerbach’s talk followed a presentation from Kubicki, who oversees Seyfarth Shaw’s practice and business development and marketing.
The focus of his talk, titled “Capturing and Delivering the Ever-Elusive ‘Value,’” addressed how to meet client demands in a competitive legal market.
While the actual work an attorney produces and the price of it are vital to the value a lawyer or firm can provide to a client, Kubicki talked about what makes a good legal work product beyond those two factors.
One of those important additional factors, he said, is the client’s experience.
He cited an example of another service sector — coffee shops — as one that demonstrates how a customer’s experience can be a driving reason as to whether they return. Kubicki cited what he called the “poster child” example of the experience economy, Starbucks, which he said has gotten its clients to keep returning for sometimes more expensive coffee than at some of its competitors because of the experience they offer, Kubicki said.
How a lawyer or law firm can go about creating that experience is something Kubicki has worked with firms on as a consultant before he was at Seyfarth Shaw, he said.
He shared the example of one former client, a founding partner of a 15-person firm, who was trying to win over a longtime client who was shopping around for proposals from other firms and had concerns about the one the partner had submitted.
Kubicki said one of the first things he convinced the attorney of when they began working together was that the client’s experience stretches beyond the direct attorney-client relationship. The experience touches various other parts of the firm, other people and processes, which he called “ecosystems,” who are often involved in getting work done, he said.
The essential question Kubicki said his point boils down to is: “How easy are you to do business with?”
In the case of Kubicki’s former lawyer client, he said the two mapped out the firm’s entire interaction with the client, from what technology it used and internal filing processes to paralegals who worked on matters. They created a “customer journey map,” which, when completed, Kubicki said they were able to show the client a custom-made plan for how the firm would handle their work.
The lawyer was able to resubmit her proposal and won the client’s work without making a major adjustment on her price, Kubicki said.
Kubicki said attorneys who want to focus on improving their client’s experience should remember that others are often involved in the process.
“Remember, it’s not just you. It’s not just them. If you can design that experience I guarantee you, you will actually be one of the few lawyers who can define, capture and deliver value,” he said.
More information on the other conference talks can be found at 2civility.org or on an app the Commission on Professionalism launched for the conference, called The Future Is Now.