Thelma & Louise. The Odd Couple. Butch Cassidy and the Sundance Kid. Sherlock Holmes. These are some of the greatest buddy movies we have seen. The genre requires two protagonists who take us on a journey. Sometimes the protagonists seem to be at odds throughout the movie (Grumpy Old Men) and sometimes they get along splendidly (The Blues Brothers). Whichever path they follow, we want to go with them on the journey. Although “buddy movies” has been a popular genre for a long time (The Defiant Ones, 1958), there are not many buddy movies featuring lawyers as the protagonists. We may not see them today, because it is hard to convince people that lawyers will trust anyone.
The Age of Trust
Once upon a time, the relationships between outside counsel and their clients resembled those buddy movies where the pair get along very well. Outside counsel worked as buddies with their clients to achieve the clients’ goals. In fact, the relationships were so close that a corporation’s lead outside lawyer would also sit on the client’s board of directors. That structure made for good relationships, although ones that were a bit too close.
Over time, relationships between outside lawyers and their clients fell apart. Initially, the deterioration was driven by the client. Having your outside lawyer sit on the corporation’s board raised some challenging conflict of interest issues (interestingly, the pendulum has started to swing back as boards spend more time wrestling with legal issues). Clients also became concerned about the financial relationships with outside lawyers. Clients still valued their outside lawyers, but they wanted to put distance between them so that clients could objectively evaluate fees. It is difficult to have an open fee discussion when your lawyer also is a director.
Evaluating fees turned into questioning fees, and then micromanaging work, and then simply distrusting outside lawyers on almost every aspect of legal-services delivery. Today, the relationship between clients and outside lawyers seems more like one of nations forced to work together than that of buddies. Russia needs the United States to keep its space program alive and the United States needs Russia to get astronauts to and from the space station. They do not really like working together, but both recognize they benefit from doing so.
The Trust-less Industry
It seems obvious that we will be better off if we turn this situation around. If you are an in-house lawyer, you probably would prefer to trust your outside lawyer. And if you are an outside lawyer, life would be a lot easier if your client trusted you.
In fact, when I meet with in-house lawyers and outside lawyers, the trust issue frequently comes up and both groups say they would prefer greater trust. There — problem solved. Everyone should meet in the middle, shake hands, and get on with it.
Obviously that is not happening, so something must stand in the way. Many have speculated about the reasons for this continuing lack of trust. The billable hour frequently comes up as the culprit. In-house lawyers are fond of asking how they can trust outside lawyers when their incentives are so clearly misaligned? Fair question.
Another possible candidate is the need for speed. In-house lawyers live in a world where “perfect is the enemy of good.” They must constantly get to a “good enough” solution and move on. Businesses do not want to wait until lawyers have vetted all possible issues. Outside lawyers, however, live in the shadow of malpractice claims or, worse yet for many outside lawyers, looking like a fool. If another hour, day or week of work will reduce the chance of missing an obscure argument from one-in-a-million to one-in-ten-million, then do it! The perfect-versus-good-enough tension is sufficient to fuel mistrust about where the other guy is headed.
We can drum up some old chestnuts if those reasons are not sufficient. Outside lawyers think in-house lawyers are not well versed in many legal issues (specialists versus generalists) and in-house lawyers think outside lawyers are arrogant. Outside lawyers believe they will be blamed if anything goes wrong (regardless of the source of the error) and in-house lawyers believe outside lawyers will throw them under the bus (too much micromanagement!).
Whatever the causes, the distrust continues and in recent years seems to be growing worse. According to BTI Consulting president Michael Rynowecer “only one-third of in-house attorneys said they would recommend their primary law firm to corporate counsel peers, down from 41 percent a year ago.” That number tells you, among other things, that trust is low and we will not see that meet-in-the-middle handshake soon.
I could stop here, leaving you with another tale of the legal industry going off the rails. But I do not like to face a problem without trying to find a solution (too many years in the service industry, I guess). So I am going to give it a try.
To solve the trust problem between clients and outside lawyers, we need to build trust. There it is. Perhaps it is not a remarkable breakthrough in human relations that we can use to achieve world peace, but I think it works.
Trust is not about flipping a switch and moving from one state to another, like crossing from Michigan into Ohio. It is a gradual transition that happens in small increments over time. When I talk to lawyers and clients who do not share trust I find that most of their behaviors focus on reinforcing that lack of trust.
The first step, then, is to go in the opposite direction. This sounds easy but it is incredibly difficult when you belong to a profession where each member believes he or she can do it better than anyone else. We have been trained in this belief from the day we set foot in law school. We have been taught to “not trust.”
Do you remember your professors encouraging you to work in groups, share materials, help each other out and generally rely on one another? Probably not (at least not if you went to law school when I did). I recently asked some students whether they belonged to study groups and shared course outlines before finals. “Absolutely not,” they said, “we were told not to trust other students because they might not understand what was covered in class.”
To reverse the equation, you must take one step towards trust, and then another, and another. Expect that along the way, you and your buddy will stumble. So what? When I was a general counsel at a publicly held company, I set up an alternative fee arrangement for a major chunk of work. It was very visible legal work, it had been handled by a lawyer close to my client, and I was moving the work away from that lawyer to someone I thought could do a much better job. The fee arrangement required the new lawyer, at a much bigger and more expensive firm, to do the work for the same amount my client had paid the former lawyer.
Many in-house lawyers would distrust the new lawyer, suspecting he would keep his costs low by farming the work out to someone very junior and keeping a too-tight lid on the hours worked. The in-house lawyers would act on this belief and the outside lawyers would see and feel that distrust. The outside lawyers would respond in-kind and the relationship would deteriorate.
I had to trust the outside lawyer with whom I “buddied up” to value the outcome first and to trust that I would be reasonable if the fee was inadequate. We stumbled a few times as we got into the work, because we both had made some bad assumptions. We talked the issues over, agreed on some changes, and moved forward.
Each day that the arrangement worked, and each time we dealt with a stumble, we built trust. Over a few years, I trusted the outside lawyer enough to have him handle several major matters for my client, and he trusted that when I asked him to work on a fixed fee I would be reasonable if our assumptions in building the fee were wrong. The relationship worked very well and my client and the law firm benefitted from it.
Yes, This is a Kumbaya Moment
It is not magic. The buddy approach in the movies often lays it out very nicely. You have to trust the other person, and then trust them some more, and then work through the problem when something goes awry. Buddies cut each other some slack.
The benefits of building the buddy relationship are enormous. If you are in-house lawyers and you want your outside lawyers to invest in your business, build their knowledge, spend time thinking about ways to become more efficient, and generally help you out, then you need to “invest” in your outside lawyers. You need to trust them and not abandon them the first time something goes wrong.
If you are the outside lawyers, you need to build trust with your clients. You need to show them you care by going the extra mile. Do not bill them for everything and do not expect them to pay you for everything. Trust them to call on you when the real matter you want comes along by sharing with them beforehand. This is not about giving away your services for free, it is about becoming the advisor who values the relationship over nickels and dimes.
You may have expected, or at least wanted, some strikingly new ideas about how to build trust. But the thing about building trust is that we do not need new ideas, we simply need to do the basics time and time again. I know many lawyers will ignore my advice, continue focusing on the moment and not the big picture believing a dollar in the bank today (or not paid today) is worth more than the promise of a better relationship tomorrow. But I also know that as the shakeout continues in the legal industry, those with the most trust will be the most likely to succeed and those with the least trust will be the lawyers who worked at the firms featured in the highlights of “law firms we lost” during the year.