Meet the 2012 ACC Value Champions
By Jennifer J. Salopek
2012 ACC Value Champions
- The Home Depot
- Lucchini S.p.A.
- Pfizer Inc.
- RBC Capital Markets and Morgan Lewis
- Rockwell Collins and Seyfarth Shaw
- Sherwin Williams and Gallagher Sharp
- Target and Nilan Johnson Lewis
- Tyco International and Shook Hardy & Bacon
- United Retirement and Porter Wright
- Whirlpool and Wheeler Trigg O'Donnell
Val'-ue (noun): A fair return or equivalent in goods, services, or money for something exchanged; relative worth in utility or importance
Efficiency. Economy. Effectiveness. Predictability. Value.
These words are frequently heard in conversations about the practice of law, especially since the economic downturn began in 2008, often as desired characteristics or goals of attorney–client relationships. To measure progress against those goals, however, we must have metrics, quantifiable data that permits "fair return" to be assessed, "relative worth" to be demonstrated.
Meet our 2012 ACC Value Champions, an inaugural group that has not only sought value but demonstrated it, in ways that other in-house counsel and their external law firm partners can emulate. As corporations continue to grapple with containing costs, General Counsel are improving the cost efficiency of the legal function, both through how they manage internally and how they partner with their law firms. This year's honorees include five law departments and seven law department–law firm collaborations that delivered substantial value to their clients through value-focused legal management skills. We hold them up as examples of innovative approaches to common in-house legal challenges as well as willing resources for others who may still have questions.
"These law departments and law firms have developed and implemented initiatives to deliver bottom-line results for their clients," says Veta T. Richardson, President & CEO of ACC. "By demonstrating creative lawyering and good, old-fashioned business sense, these ACC Value Champions not only controlled legal spend, but they also improved legal outcomes for their clients."
We received 61 nominations from law departments and/or sections within organizations, along with law firm practice groups, of all sizes and from around the world. They were reviewed by members of the ACC Value Challenge Steering Committee: Jeffrey Carr, Senior Vice President, General Counsel & Secretary, FMC Technologies, Inc., Elisa Garcia, Executive Vice President & General Counsel, Office Depot, Inc.; and Michael Roster, former General Counsel, Golden West Financial and Stanford University.
"We had a large number of excellent entries, so making the final selections was not easy," says Carr. "The ones we selected stood out not only because of significant results, but for their examples of interesting innovations or practices that could be easily replicated by others. As a long-time advocate for change in our profession, I am excited to see so many corporate counsel, and especially GCs and CLOs, along with their firms, effectively proving their value as business partners."
The highlighted programs feature true convergence, in which value-based fees have led not only to greater predictability but to the opportunity to practice preventative lawyering. In-house counsel and their external providers work shoulder-to-shoulder in these arrangements, not only to jointly create and share knowledge but to proactively mitigate risk throughout the corporations. This in turn demonstrates the legal department's value as a business partner, and often as an example to follow, to other departments.
Consider the example of Sherwin-Williams, whose national counsel model to defend product defect and warranty claims for coating products resulted in a relationship that brings external lawyers and internal technical personnel together for technical training as well as conversations about sales-generating activities unrelated to claims handling. Or what about Tyco? Shook Hardy & Bacon, its national counsel for product liability litigation, now works proactively in other areas of practice including prelaunch product and literature evaluations. The legal department at Lucchini S.p.A., an Italian steelmaker, has led the rest of the organization in adopting a disciplined management approach with outside consultants.
Winning initiatives range in scale from the small and defined, such as RBC Capital Markets' work with Morgan Lewis to cut employment law spending, to the large and multiyear, such as Pfizer's evolving alliance of 19 external law firms. They include the formulation of creative tools, such as United Retirement's risk chart, and sophisticated systems, such as GlaxoSmithKline's online sourcing room.
The metrics Value Champions use to assess their progress and measure their success vary as greatly as their industries. For some, such as Home Depot, predictability of annual external spending was a goal. For others, such as Whirlpool, reducing cycle time was important, so much so that early resolution bonuses were incorporated. For Medtronic, the metrics themselves were a goal that led to increased understanding and better forecasting.
Whatever their differences, which are many, the Value Champions have much in common, including a willingness to try new things and open themselves up to scrutiny and assessment. They use fee structures in a variety of ways, but they share carefully crafted goals and rewards that are used to selectively drive desired behaviors. But we've only scratched the surface.
"I think the 2012 ACC Value Champions are just the tip of the iceberg," says Catherine J. Moynihan, director of legal management services at ACC and the manager of the ACC Value Challenge program. "Four years in, the change curve is well along; this is the way the world is moving. This year we received nominations from more than 50 organizations in five countries. Even as we congratulate this year's Champions, I hope we will receive many more nominations next year. After all, these initiatives have realized the ultimate goal: cost savings coupled with better legal outcomes."