It’s not that rules of engagement are new - it’s just that they used to be set by the firm as part of closing the deal as the firm’s engagement with the client. As Max Welch pointed out in a recent article in Law Practice Today: “Historically, if these terms were documented in writing, they could be found in the law firm’s own engagement letter, likely drafted with the firm’s interests in mind. In part because of what many view as a recent shift in the bargaining power between corporate clients and lawyers, as well as an increased scrutiny within companies of the resources spent on outside counsel, the clients have turned the tables and many law firms are struggling to adapt.” Contributing to the shift is the inclusion of additional players on the corporate side (beyond general counsel) in the purchasing decision for law firm contracts, such as the CFO and procurement. These individuals typically work to standardize purchasing agreements and do not view law firms as an exception to this process. The problem is that the typical response from firms is purely reactionary. As new guidelines and requests are put forth by the client, the firm reacts. Often, the firm’s administrators and attorneys are too busy to take a hard look at the problem, so they continue to churn out invoices (after all, everyone needs to get paid) and accept rejections as a cost of doing business - even though it doesn’t have to be.
So what can firms do to be more proactive?
Firms should feel free to assert their boundaries and come to an agreement with their clients that is manageable for both parties. However, simply negotiating an agreement does not address the need to manage the agreed upon provisions, which is the most challenging aspect of OCG for firms to deal with.
This is the “managing provisions” part. In order to do this, firms should focus on organizing their guidelines, creating centralized, easy-to-access summaries and cheat sheets for attorneys to access as needed.
Carl Jung is known for saying “what you resist not only persists but will grow in size.” This absolutely applies to managing OCG at your firm. What if, instead of resisting, we embrace OCG? Since managing OCG, particularly billing guidelines, can be so overwhelming, many firms give up and accept losses associated to non-compliance as a “cost of doing business.” It doesn’t have to be this way.
Put the processes and other mechanisms in place in order to manage billing guidelines in real-time, putting an end to unnecessary rejections that lead to losses for your firm.