Society 54 gives you direct access to what In-House Counsel and other purchasers of legal services want from their lawyers and law firms. The CLIENTSpeak transcript below is from a recent interview we conducted with Justin Ergler, Director of Alternative Fee Intelligence and Analytics at GlaxoSmithKline on our CoachIN Podcast. Justin’s experience and insights provide invaluable first-hand knowledge to readers and listeners.
Welcome to the CoachIN Podcast. I am extremely excited to welcome a very special guest, Justin Ergler from GlaxoSmithKline. Justin, how are you today?
I’m going great. Thanks for having me.
We appreciate you taking the time to join us. I know you have a very hectic schedule and a very impactful role at GlaxosmithKline. Can you tell us a little bit about what you do there?
Yeah. The primary focus of my role is engaging our law firms in alternative fee arrangements for the services that they provide to GSK legal. GSK does it a little bit differently than most clients in that we are almost exclusively on flat fees with our firms, which means no hourly rates, no shadow billing. Nothing behind the scenes there. We agree to a flat fee for a defined scope of work as best as we can define it.
We set a payment schedule for that flat fee, whether it be an equal monthly invoice or it be milestone payments depending on the nature of the representation with the transaction. If it’s a litigation and we pay based on that.
Now if there are material changes that occur during the course of the matter, we make adjustments. My primary focus of my role is when we have the need for outside counsel, it is selecting the right outside counsel to engage for that particular matter and then getting that fee arrangement in place.
I also, a big part of my role is relationships, with not only the partners and our relationship partners who are great at our firms, but with those business professionals at the law firm so that we can talk about the business aspects because the lawyers, that’s really not what they want to do. They didn’t go to law school to talk about fees and payment schedules and things like that.
Developing those good relationships with my business counterparts at our law firms allows us to have frank and honest business conversations, which can oftentimes cut to the chase and make things much more efficient and allow the lawyers to focus on the lawyering.
That’s fantastic and I think that that shift is one that we’re seeing in the industry. That a lot of companies are going to and it’s great to hear that you guys have adopted that. It sounds like it’s going extremely well from your side. Can you dive into how it’s made your life easier? Made your company work more efficiently? Made the relationships more smooth?
Yeah. I think with the transition to flat fees, really we put the ball in the law firm’s court when it comes to profitability. When it comes to things like that. For us, it’s made it a lot easier because our attorneys aren’t expected to be diving into line item by line item, hourly rate invoices and how many hours did so-and-so spend on drafting this motion and why did the partner review this motion twice before it was submitted? Et cetera.
It gets our attorneys out of that game. Now, on the flip side, for the law firms, again, I’m not naïve to think that they don’t still track their hours internally for internal purposes, but again, they’re able to staff appropriately. They’re able to put their best people, the more efficient they are on a flat fee matter, the higher their profitability is going to be. GSK as a client has made the conscious decision years ago that we’re okay with our long terms being very profitable. If they can build a better mousetrap, they’re able to submit and win business against other firms with competitive flat fees, if they’ve invested in technology, invested in LPM and things like that, it allows them to reap a good upside on a GSK matter, well then good for them. We’ve gotten a good deal in the marketplace.
Now it’s all up to them. On the flip side though for the firms, if they weren’t efficient, if we lay out a body of work and they come back to us and they say, “Hey, we’re way over on hours here.” That’s not good enough. They’re not going to get more money for that. They need to point to, “Hey, look, we both assumed that we would only be deposing two experts in this litigation. We ended up having to depose eight. Or we anticipate having to depose eight now.” Okay, that’s a material change in work. That material change, we can talk about a fee adjustment there.
The law firms have to, not only is there an upside for them, but if they haven’t invested in technology, they don’t understand their costs. They haven’t invested in those business professionals that can crunch the numbers and say, “Yes, we can do it for X dollars,” then they have the potential to not do well on the flat fee engagement.
Overall, I think the trend of law firms and investing in those business resources, those business focused resources, those project management resources, and also technology to do things smarter, better, faster. I think overall, it has been good for the firms, albeit a transition from what they, most of the lawyers, especially the older partners have been born and raised on. It’s a different world now for them. But the ones that have said, “Hey, you know what? We’re going to change with GSK, GSK’s one of our key clients. If they’re changing and we’ve got to change with them if we want to keep working with them.” The ones that have made that conscious decision, I think by and large are quite happy with the way we do things.
Yeah and I think, that trend I think you’ve seen more firms in the industry now that are understanding that this shift is happening. There are those that will probably be the consistent deniers to a point until they understand that their feet are on the edge of the ledge and they’ve got to make a decision. At that point, a lot of competitors have already made that shift and are moving at a rapid pace of efficiency and leveraging technology to make their clients more happy and bring that client satisfaction up.
I will say that when we made this shift to the flat fees, and also we have a selection process that we created at GSK that’s a bit different than other clients as well, when we made the transition to a new selection process or a new selection methodology, and the flat fees, we had a panel. A body of firms that we consistently went to. That panel shifted over the years because there were some firms that didn’t get it. They didn’t change with us. They put their heads in the sand and their work with GSK has significantly dwindled or gone away completely.
Then there are other firms that maybe didn’t have a big footprint with us, but they said, “Hey, GSK, we’re coming with you. We want to show you what we can do,” and their footprint has grown considerably. Where we made the changes, since then, there’s definitely been a shift in the portfolio of law firms that we use, but I’d say we’ve been pretty consistent in the firms that we use over the last, I don’t know, four years or so. It’s been a pretty consistent bunch.
Without going into too much detail or revealing things that you may or may not want to, is there anything within that selection process that you think stands out when you’re looking at firms? Yes, the technology and the ability to move to flat fees, but is there something, be it an internal process or a communication level or the ability to spot business problems. What’s involved in that selection process that makes the firm stand out? Whether they’re a large firm or a smaller boutique firm?
Probably outside counsel, selection initiative. OCSI for short. The way it’s different is most clients have a preferred panel and every two or three years they’ll run a big RFP. They’ll select “X” number of firms to be on that panel. They’ll get preferred hourly rates that they’ll negotiate. From then on out, in-house attorneys, when they have a new matter for outside counsel, they’ll select the firm they want to use off of that roster and they’ve already got negotiated rates and they’ll go from there.
GSK, we don’t have a rigid preferred panel necessarily. Now we do have go-to firms that usually when we have a new matter, there is the list of usual suspects that are invited to pitch. The focus of the OCSI program is that we have a unique litigation. It is a product liability matter in XYZ jurisdiction. We look and figure out between generally three to five firms that we want to invite to pitch. We define the scope of work that we anticipate. How many depositions? What’s the volume of documents and so on and so forth, and how do we see this playing out as of now, knowing that there’s things we don’t know.
We send that to firms. We send them a standardized template and they send back to us not tell us about their product liability practice area. Tell me about all the attorneys at your firm. No. We want to know who is going to be on this team. Who is going to be the lead partner? Who are the co-partners? Who are the associates on this team? We want to know that if we hire you, who will we be working with on a day-to-day basis?
Then we ask them for the experience of those attorneys. Tell us where, the phrase I always use is closest to the pin. Right? If you represented a peer pharma company in a similar product liability matter in that jurisdiction, that is close to the end on-point experience, so we want to hear about, so here’s your team. Why is this the team you’re proposing? What in their backgrounds makes them the most appropriate attorneys for this matter?
Then we’ll ask them for their key impressions. You told us about your previous matters you’ve handled for either GSK or other clients. This specific matter, what are your key impressions to this? What are you seeing as some potential roadblocks? What would your approach, your recommended approach be here?
Then, based on that body of work and the assumptions and tasks that we’ve laid out, we ask them for initial flat fee offers, based on the phases of the matter as we see it. As we see it transpiring over the life of that matter. We also asked the firms for their input on is there anything we missed in our assumptions that are cost drivers? “Hey, GSK, you told us you want a bid if this thing were to go to trial. You didn’t specify how long you’d anticipate the trial being. We would anticipate it would be a three week trial.”
Another firm might say, “We anticipate this being a five week trial.” Once we get all these submissions back, from again, generally between three to five firms, the managing attorney for that matter will have a review of the RFP submissions. If there is a firm or firms that although they’re a great firm overall, they don’t have the same level of on-point experience as the other firms that were invited, we sometimes will short list. Then we look at those assumptions and we see if there’s any conflicts between the firms in those assumptions or any assumption that a firm had that we said, “Oh, gee, yeah. That’s really good. We want to add that.”
At that point, those short listed firms will get a revised set of assumptions, so again, the focus of that or the key point there is that all the firms are working off of the same scope of work. They all understand the same scope of work, so we’ve created a level playing field. The firms then submit revised bids based on that new set of assumptions. Then we take it to an auction, where the firms get to see how their fees by phase compare with the other short listed firms.
One set of options are we have the final fee offers from each firm. The managing attorney, and often times in this case, or head of litigation et cetera, will review the overall proposals and we’ll make a selection based on a score card of the best overall value proposition provided. That combination of the fees, obviously, or we wouldn’t be running the option, right? But also, from a qualitative standpoint, a substantive standpoint, how do we score the team? How do we rate their experience? How do we rate their key impressions, et cetera?
Then there’s also a diversity component. GSK is big on inclusion and diversity, especially in the legal department. We look at the composition of that team. It is the staffing that they’re proposing. Does it have a proper amount of diversity? Then we look into the diversity of thought there, not just at the junior associate ranks. We want to see a mix throughout the team. At the partner level. The whole way down through the junior associate level.
Those things are all rated on a one to five scale. It spits out a final score at the bottom and the highest score wins. Only about 50% of the time is it the lowest priced firm that wins. But, generally, since we’ve been doing this process for about nine years now, the firms know that in order to have a good shot, they at least have to be pretty competitive on fees, so the firms generally end up very, very close to one another, which from a business guy’s standpoint, that’s the best case scenario for me. At that point we’ve effectively taken cost out of the equation.
We can go to the managing attorney and say, “Pick the firm that you think is going to knock this out of the park and everybody pretty much equal in fees.” In a nutshell, that’s how the process works. From start to finish we generally run these in about a week.
Wow. I’ve seen plenty of scenarios like that, but I think the way you laid it out to your point, you made the point towards the end there is, that from a business standpoint, when you get firms that close on price, you may not be the lowest priced firm. If you can make a case for one, your diversity of team, diversity of thought approaching the matter, to your assumptions or any additional points that you pointed out in your response, that either GSK overlooked or here’s an assumption or here’s how we would approach this matter. It looks like it’s a little more of a sliding scale, I guess, is the only way to explain it, where you could not necessarily be the lowest price, but your understanding of the needs of GSK are so spot-on. Closest to the pin, in your words, that that fee doesn’t necessarily break your deal in competing for this matter, correct?
Correct. Yeah. I guess one thing on the backend here, we make a selection at that point, but the other firms that weren’t selected, they’re given the opportunity to contact the managing attorney for a brief feedback session on, “Hey, based on your proposal, here are the parts that I liked. Here’s where the firm that we selected won the day. We liked your team, we thought their experience looked pretty good, but your key impressions, you nailed it in. The firm we selected, they had a novel approach that really resonated.
The firms can take that feedback back and the next time they’re invited to an event, they are going to focus more on those key impressions and make sure they do a better there. Sometimes it’s just, again, since we’ve been doing this so long, we had a survival of the fittest convergence if you will on the firm’s goal that they need to bring it order to have a shot. The most common complaint I get now from the managing attorneys is, “Justin, I could pick any one of these firms and I think they would do a great job. They’re all close in price. What am I supposed to tell these people?”
Sometimes that’s just the case. “Hey, you had a great proposal, but the firm we selected, there was this one thing that they had that nobody else had.” Maybe it was they had represented GSK in a similar matter just last year and nobody else had that. Sometimes it’s difficult. To be honest, there have been numerous occasions where the firms were all equal on the substance and the financials and the diversity of the team is what won it for one firm over the others. There’s no stronger message from a client in my mind, to push and push it in diversity than to tell a firm, “Hey, if not for your lack of diversity on your team, you would have gotten this two and a half million dollar matter.”
That’s a pretty powerful message to state that.
Absolutely and I think that piece of it too, and I then I love the mission of survival of the fittest because to me, and we talk a lot about client experience and client journey and in the active listening piece, especially when seeking feedback. Because one, there are some that are very adverse to seeking that feedback from their client, for one reason or the other. Then two, it’s what you do with that feedback. Are you taking that feedback actively and circling back with your team? Circling back with firm leadership. Circling back with your business team, your LPM team, BD team, whatever that is and saying “Hey look. Here’s why we didn’t win that. How do we fix this moving forward?”
Absolutely and again, there are firms that they’ve done that, and they were invited to a few events. Didn’t win, got the feedback, took it onboard. Got more feedback, took it onboard and then they started winning. There’s one firm in particular that is now one of our most used firms that started off, the reason why they’re one of our most used firms is because they were invited to the OCSI events, and they really tried to go and get it on what GSK was looking for in outside counsel. Now when they’re invited, they’ve got a pretty good shot at winning because they are zeroed in on the proposals, they know they can be competitive on price, they know they have to throw us their A team, and they’ve become very successful with us.
I love hearing that too because it really is all about how you can be consistent, how you can be persistent, and also making the changes. Some of those changes aren’t going to happen overnight. If you lose a deal like that because your team isn’t as diverse, you either have to start working with attorneys within your firm that would fulfill that need for your client. Maybe they don’t have experience with that type of client. Maybe that’s something that they need to work it up to or maybe there is a lateral recruit that you’re looking at that has that experience, that does fit that mold. Would obviously, win the deal for you in the future, but that’s not an overnight change. That’s not something that changes overnight. It’s really important to clients that their attorneys are not only listening, but also looking at the long term implications of those changes as well.
I think one of the million dollar questions that floats around the industry and firms are always talking about it as … When you look at a team, you talk about your preferred counsel and obviously that does shift from time to time. Inevitably, firms are always wondering how do I get the attention of a client and how do I make our strength of service or our strength of knowledge or our expertise or the history that we have working in this industry, how does your team hear about these new firms? I think there are some that lean on the leadership, content creation, or something that really stands out. The referral source is really their go-to route. How is it that you all go about hearing about these new firms so if there’s a … Let’s say there’s a particular type of litigation that the smaller firm excels in within your industry. Is it something that you guys engage in the thought leadership article creation, videos, podcast or is it more referral or is it a blend of both?
I think it’s a blend, really and a lot of it depends on the attorney. I know in our litigation group, they’re big on things like lunch and learns where maybe a firm that we haven’t used much or haven’t used yet comes in and gives a lunch and learn to our in-house litigators. Did they impress? Then hey, let’s give them a shot at a selection event and see what they can do.
I think it’s a mix there. In the legal industry, word of mouth and referrals are always going to be, in my mind, the strongest thing because if you try out somebody, and they say, “Hey, we use this lawyer at this firm, and she was outstanding,” that’s going to speak louder, I think, to most attorneys than reading an article or something like that. I would definitely say it’s a mix of both.
It varies sometimes again, from practice area to practice area and attorney to attorney. I think that once you do get your foot in the door, I think investing in those business resources is very important because in-house counsel, just like everybody, as we said earlier, has a lot on their plate. Making yourself easy to do business with. More and more, there’s folks like me, a client. Now the attorneys have to deal with folks like me, right?
If you’re a firm that we use consistently, and you come in, very competitive on fees, but you’re always coming back to us complaining about material change, when really, it’s questionable. You’re always coming back asking for more money, you’re not able to stick your fee. Things like that. You’re making yourself difficult to do business with. The next go around, if a managing attorney has a decision to make, and there’s two firms that are equal, one firm is always streamlined, everything goes smoothly and such. The other firm, we’ve always got problems with and I have to go talk to Justin and then that takes time out of my day, right?
You’re going to pick the one that’s easier to work with. You really are. I’d say making yourself as easy to do business with if possible is important. I’d say along those same lines, limiting surprises to your client. It’s one thing to come and say, “Hey, I need more money because we see this thing ripping.” It’s another thing to come and say, “Hey, six months ago this thing happened and now I’m under water.” Those are two very different conversations.
Internally, that means that the in-house attorney has to go after more money, too. How easy are you making your firm to work with is very important. Is there anything else I would say? I think growing more and more is being able to look around the corner for your client, right? Clients hire law firms and clients look for law firms based on their expertise. If there’s something that, especially if it’s a new area for a client, are you thinking about not just addressing the issue your client has today, but are you helping that client to see around the corner about what might happen? What might be the issues of tomorrow? Or a year from now or three years from now. How are they preparing themselves to avoid as much risk as possible in that new area for that client?
I think that’s something that really endears firms to GSK and to other clients as well.
That last point I love. Focusing on client service and running client teams, but one that I hear from in-house counsel consistently, over and over again…I understand that you understand the legal-ese of this, but let me know and talk to me about the business implications because then, and it goes back to don’t create more work for me, but if you can give me your thoughts in a business case that if it’s either a written memo or if it’s a communication that we’re having with our board members, that I don’t have to translate what you’re trying to say.
You’re giving me the business case and the business impact and the things that are going to be easily translatable or transferrable to a C-suite member where I don’t have to spend, if I’m in-house counsel, I don’t have to spend extra time and do extra work to translate your legal dissertation about what this is. I need something that’s on the ready-to-go that I can take into a conversation without having to make that translation. Is that something that you’re seeing more firms have that business approach versus that legal approach?
Absolutely. I mean, for our in-house attorneys at GSK, our general counsel is very keen on our outside firms becoming partners to the business. Still acting as lawyers, right? But being partners of the business and sometimes in companies, legal departments are known as the people that say no all the time. Right? How could they be partners of the business while still protecting the company? But being able to talk that business language is very important, and as you said, that law firm or that outside counsel, that partner, is able to translate that, so that it’s ready to go to that presentation to the board et cetera, that makes in-house counsel again, a lot easier. It makes your firm a lot easier to work with. But also, more and more outside counsel is liaising with our in-house counsel directly with those business clients.
What is your relationship like with those business, your clients’ clients, if you will. Yeah, I think that is definitely a growing trend. I only see it getting bigger. It’s the same as everything else. There are some firms that I think are out ahead, and there are some firms that are still not there yet.
Agreed, and I think that’s where you’re going to start seeing some separation in the pack from a client experience standpoint because it’s becoming so critical in the engagement of outside counsel to your point of how you’re making it easy for us to work with you. I think those firms that get it, are starting to pull away from the pack and those that again, going back to the resistance to change, those that are refusing, that have that approach are going to find themselves looking at a lot of tail lights in the distance.
One thing along those lines too, when we talk about firms that are engaged in a high client service acumen, do you see a trend or do you guys enjoy having firms, you mentioned the lunch and learns, but just a client service check-in standpoint, 1) do you and your team enjoy having firms say, “Hey, we’d love to come visit. Sit down and talk about your business goals. What’s going on?” and 2) Then with that, if that is the case, is that something where firms can differentiate themselves by having a business professional be at a legal project management or a finance person or a business development person who sees the forest for the trees from a business standpoint. Does that differentiate them in that client visit?
I would say a lot of clients, I would probably say the answer is yes. At GSK, when we have our firm relationship meetings, our expectation, and it’s communicated to the firms, our expectation is that their business people will be there. If we’re going to schedule the meeting, don’t tell us this date and then say, “Yeah, but my business person can’t make it.” Then we need to find a new date.
I think we demand a bit more. We have their business professional there and oftentimes will bring their head of inclusion and diversity because they know that’s very important to GSK legal. Their client value officer, there’s many different names for those roles or their chief ranking officer. They expect those people to be at those lunch meeting along with that relationship partner, and those key lawyers that do work for GSK.
GSK is not necessarily a differentiator, but I mean, even in those meetings, you can tell the firm’s that are bringing their business person there simply because GSK told them to and then there are firms that would be bringing their business person regardless because that person is an integral member of the firm.
I think to that point, there are a lot of firms that feel like there’s this obligation, be it from a business standpoint, be it from a diversity and inclusion standpoint, that if they show a good aesthetic, then that’s going to check the box for clients. I think that that truth is showing through that your point, yes, it’s wonderful that you’re acknowledging these things are important to us, but if you’re just showing, basically if you’re standing up a cardboard cutout just to make it look like you have a business professional in the room. They’re just there to show face. That’s almost, to me I would think if I’m the client, that would do more damage than good because it shows you’re pandering the response. If you have somebody, that is engaged with the firm, that is part of the conversation, that has helped driving strategy, that has helped driving the client service. That is where the impact is made.
Are there trends in the legal industry, from an outside counsel standpoint that you would love to either see end or continue? Are there things that firms are doing that you’re like, “Oh, good God. Knock it off.” Or are there things that you’re saying, “This is great. We need more of this.”
The obvious thing that I would like to see continue and expand is the utilization in investment in the business side of professional services, LPM and technology. We’ve been talking about that the whole way through this year. What would I like to see end? I guess going hand-in-hand with that, I would like to see more proactivity from firms in communicating about the matter with folks like me, about the matter and how we’re doing, rather than wait to tell me when there’s a crisis and they’re underwater on a matter and as I said earlier, that met up with the problems I’ve had internally. It’s a problem for us now. If they tell me once then they’re way under on a matter and there is good reason for it, there was a material change in work, right?
We’re going to have to go to finance and they’re going to have to perhaps get our reserves adjuster. We’re going to have to do things like that and there’s going to be a lot of questions around that. The more proactive we can be, the better there. I’d like to see the reactive nature of fee discussions come to an end and turn this into a more proactive discussion, whether it be in the form of quarterly reports or for some matters, large matters, maybe monthly reports on what is the status of this? Where are we? The answer might be everything’s green. We’re good to go. It might be, hey, coming up in a month there’s going to be a hearing. This could go one of two directions. If it goes left, we’re okay. If it goes right, we’re going to have to talk about a material change fee adjustment, it’s going to dramatically change the matter.
Giving that heads up to the client, it helps them to not only be ready for it. Again, have their finger on the pulse of the matter, but also it allows us to brief our business clients, our friends in finance, et cetera so that nobody’s caught off guard and the whole universe of that representation, if that makes sense.
Absolutely. Let me ask you this, why do you think firms are so hesitant or I guess fearful would be a good word for it as well. Why do you think they’re so fearful about communicating those changes? That seems like it would be a business no-brainer. But at the same time, it’s something that consistently comes up in conversations of “Hey, you guys need to communicate when changes happen because the impact flows downstream.”
Why do you think firms are so hesitant or fearful about doing that?
A few reasons, I would say that I’ve seen. You said it would be a no-brainer in business moves, right? These are lawyers. You know what I mean? There’s some of them that think more like business people. There are some of them that think like lawyers, right? That’s one reason.
Second reason is all lawyers, both in-house and outside counsel, not all, most I would say that I have come across, hate talking about the money. They’ll talk about the substance and the nuance of this motion and that motion until the sun goes down. But having to go back and talk about, “Hey I need more money here. And in-house, having to say, “Hey, I’ve looked at your proposal and you’re going to have to come down a lot because you’re simply way too high.” Basically saying, you weren’t worth what you’re asking for here.
Those are difficult conversations to have because immediately after an in-house lawyer would say that, the very next thing out of his or her mouth might be, “Oh, yeah and I need you in Des Moines, Iowa on Tuesday for a deposition. Am I right?
Those are difficult back-to-back conversations to have. I think there is that fear there, coming and asking for more money or on the flip side, telling somebody that they’re not going to get as much money as they think they should. Those are difficult conversations to have, but again, that’s where the smart firms and smart clients have transitioned those conversations to people like me, and my counterparts on the law firm side. Those are conversations that we’re more used to having and more comfortable having.
Quite frankly, when you have good relationships on the business side, at the law firm and the client side, I think personally the business folks are more frank and transparent with one another. Not in a bad way, that lawyers aren’t transparent, but we’re willing to give some of the harder feedback, or the news maybe that you probably didn’t want to hear. I think it flows a lot easier from business person to business person, generally, than it does from lawyer to lawyer. They still have to work with each other, on a day-to-day basis. Often times in very, very stressful situations. If you can allow them to focus on the lawyering, and allow the business people to focus on the business, then everyone’s doing what they’re best at.
I think that’s where you’re seeing … The firm’s that we’re using more and more and it has nothing to do with me, but the firms that have made themselves easier to work with in that business sense, those are generally the firms that have seen their footprints grow. I think our attorneys like working with them. There are great lawyers everywhere, right? There are a lot of great lawyers. We deal with great firms. Those small differentiators, I think are very impactful.
Those conversations, you can look at it with various array of different reasons, but I think that business to business conversation is so much easier to have. That way, the things that need to be fixed can continue to be fixed and you’re being attentive to the client’s needs. You’re being, you’re communicating as you should. It really comes down to the gold rule basically. If you put that same person who doesn’t want to communicate in a scenario where somebody didn’t communicate something important, then how would they feel? How would that impact them and how would that transfer everything in their day?
It’s that golden rule effect. If you know something’s going to impact your client and potentially their clients as well, think about how you would feel. Then exercise that activity and do what you need to do to take care of your client and remove that hesitancy or that fear.
It’s really communicating those changes, setting the expectation and then it’s really a service recovery standpoint at that. It’s really saying, “Okay, here’s what’s happened. Here’s where the break is and here’s what we’re going to do moving forward and here’s the expectation that we need to reset. Is everybody okay with that? How do we get back to good on this?”
Right. Absolutely. As you said, there are always things that are going to come up and I think again, back to the fearful thing about going to a client and saying, “This big change or this didn’t go our way so it’s going to be more money.” Those are hard conversations, but they’re conversations, quite frankly, that need to be had. For all the reasons that we talked about earlier. They’re conversations that need to happen. If the business folks can after the day facilitate that swell of information and that exchange of information, it just makes everything run much more smoothly and much more efficiently.
Sure. There’s nothing worse than a problem that is underneath the surface that you’re not communicating about and you’re trying to fix it before somebody catches it and then it blows up in your face. It could potentially ruin a client relationship frankly. It’s better to be over communicative and have those conversations.
Right and part of our firm relationship meetings, it’s not just all the rosy feedback because we solicit feedback from our managing attorneys that have used those firms significantly over the course of the last year. Can you rate their performance over the last year? Can you tell us the highlights? The well likes? What you’d like to see them do differently? To your question earlier, what you’d like them to stop doing. Is there an issue with a particular partner that needs to be communicated?
In those relationship meetings we don’t normally give the rosy feedback and how much we love you. Right? We’ll also say, “Here’s the difficult part of the conversation. Here’s some of the feedback that we’ve received that maybe isn’t so glowing.” Something that you need to take back and address. Again, it’s those difficult conversations that are hard to communicate sometimes from the in-house attorney to the outside lawyer, because again, you’ve got to work together on a day-to-day basis.
If you have somebody else that could facilitate that flow of information, it not only gets it out there, because often times the partner might have no idea. Now they’ve received that feedback. Now they are aware of it. Now it’s incumbent upon them to take that back internally, communicate that message internally and make the necessary changes.
Sure and I think that’s the one thing that I constantly convey to firms that if your clients are giving you feedback, positive and negative, that’s a good thing. Especially if they’re giving you negative feedback because if you think of yourself as a consumer, if you have a bad client experience, in any kind of purchase whatsoever, especially a high dollar purchase, you’re not going to go back, if you’re not giving them feedback you don’t care. You’re not bought in. They relationship is not established. The likelihood of you sending them a “Hey, thanks for the memories. We’re moving on to another firm.”
I joked in a presentation one time about sending a break up mix tape. You’re not going to do that. You’re going to walk away. You’re going to find another firm. You’re going to replace that firm, but if your client’s giving you even constructive criticism or some maybe not glowing positive feedback and that’s actually a great thing. They want you to be better. They want that relationship to enhance.
I think every point that you made is very relevant and impactful to firms in how they manage their relationships moving forward. Again, I think these conversations keep coming up from the clients saying, “Hey, here’s what we expect and I love the way that GSK handles a lot of these things and a lot of it is unique to me and I hope that it resonates with other clients and other firms.”
It really is. It’s all about communication. It’s all about transparency and it’s all about really understanding the relationship needs to be a two-way street. Let’s engage and make it better for everybody.
One conversation we have with firms is how are you leveraging your younger partners and your elder associates in the client relationship and what visibility are you giving them? What advice do you have for firms and how to leverage those types of people within the client team?
I think one thing at GSK that we definitely look for, obviously, we want these partners. Absolutely. Everybody does. But, how are you showing GSK that you’re developing your junior and mid-level and senior associates who are going to be our lawyers of tomorrow? Are you getting them in front of your client so they know who they are? Or are you keeping them back in the home office and they never see the light of day?
I think it’s very important, definitely it is different from firm to firm the way they showcase associates to us and the way that they have their succession planning. There’s one firm in particular that’s done it outstandingly well in the patent litigation space. We had a lawyer there for many, many years and a very trusted advisor to the company. It got to the point where he retired, but they had groomed junior partners, senior associates, et cetera, so GSK was very comfortable.
The work didn’t leave that firm and new work continued to flow to that firm, even after that senior partner left because that senior partner had gotten into more of a an oversight role towards the end of his career. We really were comfortable because they had worked with us. They knew all our attorneys and we knew their attorneys. The new, more junior attorneys. It was a very comfortable transition.
we’ve seen it happen at other firms where there was one or maybe a couple of partners that were our key partners for ages, but they really didn’t have behind them those folks coming up that they were showcasing. When those partners left, or if that partner jumped to another firm, the work went with him. Or the other workers went to another firm, right?
I think the best advice I would give is how are you showing GSK? How are you getting your relationship partner or partners of tomorrow in front of your clients so that there is that comfortable feel and ease of transition as either an attorney moves toward retirement or from a firm continuity standpoint, that attorney would move to another firm. Are you going to lose that work because we don’t know anybody else on the team and we’re simply not comfortable with people we don’t know.
Even if you try, if you have somebody that is your main relationship partner that works with you for years, and years and all of a sudden, announces that they’re six months out from retiring and oh, by the way, here’s the new person that you’re going to be working with. That, to me, doesn’t really set up a really good relationship moving forward either because it’s like an after thought. If you’re not looking at it as a true engaged relationship between the firm and the client … It’s respectful to say, “Hey look,” it’s not like they decided all of a sudden this is what I’m going to do. They’ve had a good vision of the future. If they’re not one, to your point, consistently bringing additional team members, especially young partners and elder associates, but if they’re laying out that path, well ahead of time. There’s familiarity, then you all of a sudden don’t feel nervous.
Imagine going to a doctor and your doctor walks in one day and says, “Oh, by the way, I’m retiring tomorrow. Here’s your new doctor. Good luck.” That just feels weird. It’s the same premise when you’re talking about engaging in the succession planning with your firm with those relationship partners as well.
Right and there’s also the history there, right? Your example about doctors, yeah, hey, I’m retiring tomorrow. Here’s your new doctor. You’re going to have to explain your whole medical history to this new doctor. On the client side, “Hey, here’s your new partner,” when she had six months to get up to speed on GSK. That’s no good. But if there’s a transition, not only does this relationship outgrow a relationship partner know what’s going on currently but knows the history and the background so do these junior partners with senior associates because they’ve been around and servicing this client for a number of years.
Yeah I think that’s an often overlooked element of the client relationship and I think obviously those firms that do it, do it very well. I think that those that don’t can take a very strong lesson from those that do because it is really, really integral to the relationship between the firm and the client for the duration of the relationship which hopefully is decades long because you want that connection and you want that level of service.
I completely agree with that familiarity with the client and with the history is absolutely beyond critical to maintaining a solid relationship.
Well, Justin, I greatly appreciate your time today and your insight on everything. This has been a fantastic conversation and tons of take-aways for firms to really benefit from GSK’s approach to engaging outside counsel and the things that make a difference. I think there are a lot of times that a lot of different pointers are shadowed within the industry and a lot of things are brought up. You hear it from the client directly and sometimes they don’t make as big of an impact.
I appreciate you taking the time to share all these insights and hopefully there are a lot of firms that take notes and start making some changes that they’ve got some deficiencies at this point.
My pleasure. I certainly appreciate the invite. Thanks so much for having me.
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