I’m Back — Advising Business People on How to Take Charge of their Companies’ Legal Health

I’m back from a hiatus in my blogging after two months of traveling back East on family medical and elder care duties.

This blog, like my law practice, remains focused on a dilemma faced by business owners and executives:

How to manage legal and regulatory exposure where your attorneys (outside firms and in-house counsel alike) offer the specialized expertise in law that you need — but insert waste into their charges and staffing practices — and make little effort to prevent liability before it happens.

I first really understood this problem only after I was invited by a corporate client to leave the practice of law to be general manager of a division.

Litigation and regulatory demands soar. A hostile legal climate requires the highest standards of legal analysis and representation — with harsh consequences if you get it wrong.

Meanwhile attorneys’ fees and in-house legal budgets refuse to go down (see here and here). Ten days ago I received this promotion from a legal budgeting consultancy:

As you prepare next year’s [legal] budget, think beyond ‘last year plus five percent‘.”

Such a low bar on cost control and management no longer surprises me.

Because I’ve worked on both sides of the lawyer / client table.

On the lawyer side of that table — I tried cases to Manhattan juries, did deals in New York and London, and advised corporate executives on pending business decisions.

Even more important — on the client side of that table — I served as general manager of a division at Whirlpool Financial, and then as an executive at GE.

Here’s what I learned.

First, if the medical profession treated physical health the way that we attorneys treat a company’s legal health — all doctors and all nurses would work in the emergency room. No annual check-ups, no flu shots — not even a high school health class.

The legal industry is not big on prevention.

Second, law firms and in-house counsel pay for and assign talent to attorneys’ work in wasteful ways that no general manager would tolerate anywhere else in the business.

Billing by the hour instead of committing to a price upfront, duplication of effort, and assigning (and charging for) inexperienced lawyers onto teams doing your work — these are staples of the legal business model. Most lawyers see nothing wrong with this — and neither did I — until a change of roles enabled me to lose my attorney’s blind spots on cost control and management.

It doesn’t have to be this way.

FMC Technologies — a Fortune 500 company — cut total spending on law firms and in-house budget from $14.3 million per year down to $9.5 million over ten years.

Here’s the kicker: FMC Technologies achieved this 1/3 cut in spending while the company’s revenues grew four-fold.

Unsurprisingly, it did this under the leadership of a guy who’d run his own business before he’d returned to the practice of law — not a lawyer whose experience was confined to law firms or an in-house legal department.

Business law and regulatory compliance are ultimately a cost control and management job. That’s what this blog — and my law practice — are all about.

I’m glad to be back.