Value – The more it changes, the more it remains the same
The legal profession has commenced a long-overdue discussion of “value” in respect of the legal service provided to corporate clients. To a degree, that conversation began with (or, at least, was enlivened by) the initiation by the Association of Corporate Counsel of its ACC Value Challenge in 2008.
Even after much debate and numerous articles on the subject, misconceptions regarding the term “value” abound. Many law firms and outside lawyers believe that the discussion of “value” actually masks the intent of in-house attorneys to reduce firms’ billing rates (or, at a minimum, their billings). Many believe that they need to divine a single, all-purpose definition of “value” for use in all contexts.
Neither view reflects reality. Many in-house attorneys admit that they would approve higher fees for outside counsel if they believed that their companies received “value” commensurate with a higher amount. The experience of some law firms, which allow clients to reduce the amount of fees on an invoice (even to zero dollars) or to increase the amount billed, reflects this since those firms have reported receiving unexpected bonuses from clients that increased the amount billed by the firm.
How does a firm know what definition of “value” its clients apply? First, it must recognize that no single definition will work for all clients. Indeed, a single client may apply different definitions of value in different situations. The idea that a single definition of “value” is held by the in-house community and is evolving in some orderly (or messy) fashion, as suggested by some recently, does not withstand scrutiny. A single corporate client may elevate cost containment much higher in its constellation of “value-related qualities” for certain matters than it does for other matters or even for most matters.
In short, “value” reflects a very fluid concept. Ultimately, however, it means the degree to which the legal service leads to a measurable, positive impact on the client’s business affairs for which that service was required. Understanding the business goal, appreciating the client’s needs and its preferences in that regard and exploring how the lawyers (in-house and outside) can and will assist the client to achieve its business goals constitute the most effective means of learning that client’s definition of “value” for that specific engagement and of assuring that the client will be a satisfied and continuing client.