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If you’re watching developments in the business world, you know that more and more companies are partnering with their key customers and product and service providers. Growing competition and shrinking profit margins in all industries are forcing businesses to improve controls over their internal and external costs. General counsel, therefore, are turning to their outside counsel for more solutions, but now with a different twist. Over the past few weeks, attorneys at law firms across the country have received letters from major clients suggesting that they attend Partnering 2000: Profiting From Client Collaboration, a two-day conference that will be held at the Tysons Corner Marriott,, Va., this week. Companies including AT&T, Heller Financial, Krupp Werner, McDonald’s, MCI WorldCom, and Whirlpool are telling their outside counsel that they need to learn more about the mutual benefits that partnering arrangements can offer. ARE LAW FIRMS REALLY GETTING THE MESSAGE? At a time when managing partners are calling on their colleagues to tighten their belts in order to invest in new technology, meet rising associate salary demands, and increase marketing efforts, the idea of partnering may not seem very attractive — particularly if you hold the mistaken belief that partnering is simply another term for in-house counsel pressuring their outside lawyers to lower fees. But, as an audience of in-house lawyers was told at the Partnering and Convergence Forum for corporate counsel in Chicago last month: Dispel any notion that partnering involves cloaked efforts by clients to obtain legal services at lower hourly rates. Partnering is not about changing the number of firms a company uses, issuing or winning requests for proposals, or doing business as usual. And it’s not just about getting really great legal service, close relationships between leaders of law departments and law firms, giving most legal work to a few preferred providers, or improving the corporate bottom line. True partnering, as the name implies, is not a one-sided relationship in which one party dictates to the other. In contrast, partnering involves a common vision that focuses on mutual economic benefit. Success is structured upon trusting relationships established at multiple levels of the partnering organizations. A team effort is required to identify and eliminate barriers that hinder the partners from working together to be as profitable as they can be. The partners continually reinvent how legal services are delivered, with the objectives of strengthening relationships, increasing efficiencies, and adding value. As general counsel of Heller Financial, I wrote a letter to the company’s outside counsel, to drive home the point of mutual benefit: The positive outcome of our efforts is that we’re proving every day that partnering truly can be a win-win relationship. We have materially boosted productivity and lowered our company’s overall legal costs during a time of significant corporate growth and change, while at the same time our partnering law firms have substantially increased their revenues, realization rates and profitability. BEYOND THE BOTTOM LINE Obviously, the reason to change how things have been done in the past is to make things better for now and the future. And better is usually measured by positive impact on the financial bottom line. A little-known fact about many successful partnering relationships, however, is that they didn’t start out with a focus on cutting costs or lowering legal fees. Also, most attorneys do not recognize the many additional benefits that partnering arrangements offer that go beyond improving the client’s financial picture. Committed partnering efforts result in better work environments and relationships — between the corporate client and its firms, among the various firms serving the client, among members of each partner firm, and among the members of the in-house legal and business units. In the process, relationship management skills also improve. The immediate personal benefits are greater enjoyment of work and enhanced career satisfaction. Although the tangible value of these benefits is hard to measure, enjoying your work and the people you work with correlates directly to reduced employee turnover, increased efficiency, and improved cost realization. As for direct economic benefits, law firms in partnering arrangements frequently get more repeat and referral business, with a resulting increase in revenue. Commitments from key clients for definite volumes of legal work also provide partnering firms with more predictable revenue, opportunities to build new practice areas, and improved efficiencies in the delivery of legal services — all of which, in turn, improve law firm profitability. And, of course, the benefits can be marketed and utilized to generate revenue, expand business, and increase profits in dealings with other clients. LONG-TERM SAVINGS AND PROFITS Discussing the remarkable success achieved by partnering efforts at DuPont over the past seven years, James Shomper, corporate counsel and manager of law firm partnering, told in-house colleagues at the recent Partnering and Convergence forum that there are “many more companies talking about partnering than those who are actually doing it. In a true partnering relationship, specific programs and initiatives must be continuously improved, client�law firm relationships must be nurtured, mutual trust must be built, and common interests must be delineated. None of these can be mandated or expected to occur overnight.” Partnering is all about forming, nurturing, and building relationships that last over the long term and work to the benefit of everyone involved. While the keys to success can be defined relatively easily, there remains significant resistance within law firms to making the cultural changes necessary to deliver what clients want. Firms whose leaders still regard their work as a profession rather than a business will continue to stumble in their business-building efforts. Another obstacle is that lawyers are not trained to think from a client-centered perspective — and don’t always know how to go about building stronger relationships or performing effectively in a team setting outside of a specific transaction context. Until we admit these deficiencies, take a new look at our mutual needs, commit to accelerated cultural change, and seek out the training necessary to improve our business relationship management and collaborative skills, the highest rewards of partnering will remain out of reach. The good news, however, is that we do not need to “reinvent the wheel” in the process. We can learn much by studying successful businesses — as well as those that have failed. Law firms and legal departments can apply the same resources used in the business world to transform relationships between companies, vendors, and customers. For example, business literature and professional training programs offer a treasure trove of strategies, organizational models, tools, techniques, and the like that are useful in both law firm and in-house settings. PARTNERING — HERE TO STAY Don’t waste time wondering whether making these changes is necessary. There is absolutely no reason to believe that the economic, technological, and competitive factors that are fueling interest in the benefits of partnering arrangements will diminish. At a meeting of law firm marketing professionals in San Francisco in mid-April, Michael Roster, executive vice president and general counsel of the Golden West Financial Corp. and chairman-elect of the American Corporate Counsel Association, said, “The trend toward partnering is definitely here to stay.” In this business environment, your choice is not whether to get on board, but when. If it hasn’t happened already, eventually clients’ in-house counsel will have to confront and respond to their companies’ need to optimize profitability. In turn, law firms will have to respond to client demands to increase the efficiency of the legal services they provide. What is needed now are greater commitments from in-house counsel and their outside law firms to build stronger working relationships, embrace change, and collaborate to improve the delivery of legal services. Partnering holds the key to economic benefits for all. Attorneys who understand what it means to be truly client-centered and are willing to revamp their approach to delivering legal services are gaining larger chunks of their key clients’ legal business. Savvy law firms will take advantage of the many resources available, such as the Partnering 2000 forum, to learn about the latest developments in partnering strategies and tactics and to keep up with changing client expectations. Debra H. Snider is executive vice president, general counsel, chief administrative officer, and corporate secretary of Heller Financial Inc. ((312) 441-7300). Peter C. Jenkins is director of training & special projects at Jaffe Associates Inc. and president of LawPartnering.com ((520) 776-4600). Both serve as chair committee members for the Partnering 2000 forum.

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