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					GLOBAL LEGAL SERVICES: Dove Andiamo?
23 September 2010 - Interlex Annual Meeting
E. Leigh Dance, ELD International, Inc.
www.ELDInternational.com




 eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
                          DOVE ANDIAMO?

                         The Great Reset
To what? We don’t know for sure
How much of change is temporary, how much is
  fundamental?
Many forces in motion long before crisis




eldance@eldinternational.com – 23 September 2010
Bright Ideas:
Insights from
Legal Luminaries Worldwide
26 essays by
global legal industry leaders
on where we’ve been and
where we’re going

profits go to : A4ID
Advocates for Int’l Development
www.BrightIdeasGlobalLaw.com




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
DOVE ANDIAMO?

I.     Global Legal Industry Snapshot

II. Client Demand for Coverage

III. Client Drive for Higher Value

IV. How Law Firms are Meeting the Challenge




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
WHERE ARE WE GOING?

 Listen for Interlex: what does this mean for our
  network and it’s success?
 Listen for your firm: what ideas can I share
  back in the office?
 Listen for yourself: how should my practice
  change to suit client’s changing needs?

Write down your thoughts – questions after each
   section

eldance@eldinternational.com – 23 September 2010
ELD International Background


                                         Global legal services consultancy
                                         1993 – present

                                 Projects around the world
                                 • regional and global law firms
                                 • global corporate law departments
                                 • global law firm networks

                                 New York, London, Rome > Brussels




 eldance@eldinternational.com – 23 September 2010
          Disclaimer - Caveat



                                •       ELD is an independent provider
                                •       Independent and smaller law firms are
                                        thriving
                                •       In some ways a different business,
                                        but still affected by these trends
                                •       Italy example: no one escapes change




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

MACRO outlook:

     Developed-world recovery looks weak (de-leveraging
      forces and legacies of the crisis)

     Emerging world is set to grow strongly, particularly Asia,
      with good fundamentals and lack of aftermath issues

    –       Nomura 2010 Global Economic Outlook




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

MACRO outlook:

 Multi-polar world: globalization is not one way,
  west to east -- it is multidirectional

 Dynamic contest for consumers, resources,
  capital, talent, innovation




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot
Legal services buyers: mostly Corporate
   Counsel
Legal services sellers: Law firms and…
Law firm networks




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

     Legal services industry includes 180,000 law offices
     Combined annual revenue of $235 billion
     2009: #1 firm revenue: Baker & McKenzie at $2.112 bil
     #2 firm: Skadden at $2.1 bil
     Consolidating, converging industry

              - Hoovers Legal Services Industry Review, 2010




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

     Global 100 law firms 2009: $74 billion global gross fee
      income (86% of firms were down)
     Big Four 2009: $93.8 billion global gross fee income
     Lots of room to maneuver – different moves based on
      size of firm

                         - Legal Business Global 100 issue 2010




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

In addition to law firms, larger clients increasingly hire:

      legal process outsourcing providers
      compliance reporting systems providers
      investigative/security providers (e.g. Kroll)
      information providers on changing laws and
       regulations,
       and others.


 eldance@eldinternational.com – 23 September 2010
Global Legal Services: Dove Andiamo?




             Global economic crisis


eldance@eldinternational.com – 23 September 2010
Crisis rocked law firm and lawyer security




eldance@eldinternational.com – 23 September 2010
2008-9 : Law firm response to clients




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

Law firm priorities:
 Cut costs
 Protect and defend practices and relationships
Now moving to …
 Structure the global law firm for tomorrow
   - Consistent delivery and knowledge transfer
   - Aligning client and law firm metrics
   - Implementing new business models cautiously



eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot

Global corporate counsel priorities:
     Reduce costs
     Perform better: deliver value to corporate leadership
     More clarity and predictability
     Cover growing/emerging markets
     Stay on top of global compliance




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
I. Global Legal Industry Snapshot


                    ? QUESTIONS ?


eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
II. Client Demand for Coverage
External challenges:
• Ever increasing regulatory activity
• Scale and complexity of mega-projects
• Environmental and social issues
• Legal instability and disrespect for the rule of law
• US-style litigation invading other parts of world
• Judicial challenges by NGOs
• Self-regulation and ‘social media’ (blogosphere)
• Technology



eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
II. Client Demand for Coverage
Internal challenges:
• Abundance of processes
• Consensus-seeking corporate culture
• Stretched cost-targets which need to be achieved through:
-       Higher in-house efficiency
-           More risk focused
-           More effective management and less use of outside counsel
-           A top-quartile mindset in a redefined, lower-cost organization




eldance@eldinternational.com – 23 September 2010
Global Legal Services
II. Client Demand for Coverage
Multi-polar business growth




 eldance@eldinternational.com – 23 September 2010
 Global Legal Services
 II. Client Demand for Coverage
Multi-polar business growth: tipping point

 BRIC +
 In 2009 23 Fortune Top 30 companies,
across a range of sectors, made more than 50%
of their revenues outside of their home market
 Middle market heavily international as well




 eldance@eldinternational.com – 23 September 2010
II. Client Demand for Coverage
Emerging markets growth rate forecasts
                                                      2008   2009   2010   2011
        Real GDP % change
        China                                        9.0     8.7    11.4   10.0
        India                                        6.7     6.6    8.2    8.7
        Brazil                                       5.1     0.5    5.8    5.0
        Mexico                                       1.3     -6.9   4.2    3.5
        South Korea                                  2.2     0.3    4.8    4.6
        Turkey                                       0.9     -5.5   5.5    4.5
        Russia                                       5.6     -9.0   4.5    5.5
        US                                           0.4     -2.5   2.1    2.4
        Netherlands                                  2.0     -4.0   1.4    1.8
        Japan                                        -0.7    -5.2   1.5    1.6
        France                                       0.3     -2.3   1.8    2.4

                                                   Source: Goldman Sachs Economic
eldance@eldinternational.com – 23 September 2010       Forecast, December 2009
Global Legal Services
II. Client Demand for Coverage




    Government regulatory coordination
    and enforcement globally


eldance@eldinternational.com – 23 September 2010
Global Legal Services
II. Client Demand for Coverage
Dynamic of heavy government intervention in business:
 Consistency of legal services delivery across
  jurisdictions has a real value
 Reporting, deliverables, estimates, budgets,
  timing makes inside counsel life easier
 Connections have a value: trusted advisors
 Understanding client’s business has a value




 eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
II. Client Demand for Coverage


                    ? QUESTIONS ?


eldance@eldinternational.com – 23 September 2010
III. Client drive for higher value

Consolidation,
Convergence




The SMARTER Legal Model – Trevor Faure
PracticalLaw.com
37 jurisdictions EMEA – higher client satisfaction, lower
       outside costs, fewer compliance issues & damages



 eldance@eldinternational.com – 23 September 2010
    III. Client drive for higher value




Triangle of Legal Imperatives:
•        Coverage, compliance, client satisfaction
•        Internal headcount
•        Net cost (including legal fees, fines, business
         losses)


    eldance@eldinternational.com – 23 September 2010
    III. Client drive for higher value

                                          Royal Dutch Shell
         Five quick ways to lose Shell as a client:
•        Accept a mandate from a business person directly without
         involvement from Shell Legal
•        Underestimate cost of a matter and only notify Shell when invoice is
         issued
•        Accept a mandate and then drop it later because of a pre-existing
         client (conflict) you didn’t think would be a problem
•        Change the partner in charge of a litigation case right before trial
         without informing Legal
•        Bill for deal ‘t-shirts’


    eldance@eldinternational.com – 23 September 2010
III. Client drive for higher value

Disaggregation, increase efficiency


                                                   and


                                                   and




eldance@eldinternational.com – 23 September 2010
III. Client drive for higher value




  Let clients be your catalyst to change




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
III. Client drive for value


                    ? QUESTIONS ?


eldance@eldinternational.com – 23 September 2010
IV. How law firms are meeting the
challenge
                   ACC Value Challenge:
1. Meet. Talk. Act.
Discuss and brainstorm ways to improve relationship
• Improve staffing both outside and in
• Consider alternative fee structures by sharing expectations
and criteria
•Communicate and clarify inside counsel’s needs and priorities on each
assignment
•Increase the transparency and predictability of legal services
provided

ACC = Association of Corporate Counsel


 eldance@eldinternational.com – 23 September 2010
IV. How law firms meet the challenge
                   ACC Value Challenge:
2. Set Parameters
Clarify expectations and agree on details at start
• Define the scope and key components of assignment
• Identify project leaders and key contacts inside and outside
• Set expectations for timing, deadlines, deliverables, format
• Determined methods and frequency of communication
• Agree on staffing
• Agree on fee structures, estimates, and billing approach




 eldance@eldinternational.com – 23 September 2010
IV. How law firms meet the challenge
                                     ACC Value Challenge:
3. Break it down
Engage team members in project through clear steps and regular
    communication


4. Set targets and goals for those involved
Measure performance, provide feedback, tie compensation to goals


5. Develop a tool kit
To increase efficiency, cost predictability, improve staffing, incentives




 eldance@eldinternational.com – 23 September 2010
IV. How law firms meet the challenge
                                    ACC Value Challenge:
6. Value Billing
Work together to figure out ways to align client and law firm incentives
and interests. Improve communications so law firms can provide more
transparency .


7. Track progress and share
Encourage creativity, identify progress, celebrate successes, replicate


                        Source: ACC Value Challenge




 eldance@eldinternational.com – 23 September 2010
IV. How law firms meet the challenge
Bids/RFPs/Panels – online developments




www.practicallaw.com
www.procurelaw.com
www.legalonramp.com


eldance@eldinternational.com – 23 September 2010
IV. Legal services seller innovations
 Fee arrangements that align client and law firm
    goals and incentives
 Alternative fee arrangements: 30%




eldance@eldinternational.com – 23 September 2010
III. Meeting client demand for higher
value

More focus on service delivery – but not
        at expense of legal advice
Use data, standard practices, technology
  tools, reporting, and communications:
  give the client the tools




eldance@eldinternational.com – 23 September 2010
III. Meeting client demand for higher
value

       Dealtrak
       Rapid Response
       Global Account Management System




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES:
IV. How law firms are meeting the
challenge

                    ? QUESTIONS ?


eldance@eldinternational.com – 23 September 2010
Global Law Firm Networks
Opportunities and Threats
OPPORTUNITIES:
     Increasing lawyer focus on differentiation and adding
      value
     Firm management recognizing value of firm affiliations
     Clients want a trusted adviser referral
     Prove value of Interlex, tell stories, communicate
      internally, track and distribute referrals
     Prepare anecdotes, decide what works for your firm




eldance@eldinternational.com – 23 September 2010
Global Law Firm Networks
Opportunities and Threats
CHALLENGES:
 Increasing reach of global law firms
 Other memberships within firm dilute focus
 How to increase participation among more
  lawyers in your firm
 More law firms are investing in excellent liaisons
  in more places
 Lots of networks out there




eldance@eldinternational.com – 23 September 2010
International law firm networks




eldance@eldinternational.com – 23 September 2010
GLOBAL LEGAL SERVICES: Dove Andiamo?
23 September 2010 - Interlex Annual Meeting

E. Leigh Dance, ELD International, Inc.




 eldance@eldinternational.com – 23 September 2010

				
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