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How You’ll Know When Your Firm’s Been Fired

Posted in Law firm practices

UPDATE: This article won the BigLaw Pick of the Week award!

I sat in on a meeting recently when a major corporation’s General Counsel, CFO, and COO made the unanimous decision to fire a law firm that had been serving the company for over two decades. There had been no catastrophic we-bet-the-company-and-lost kind of screw-up, no egregious failure of expertise, no utterly dropped balls — just steadily increasing client dissatisfaction.

This firm was shown the door solely on the basis of the same five-count indictment that has become increasingly common:

 

  • Too many surprises
  • Too many blown budgets
  • Overlawyering and overbilling
  • Failure to respect client internal deadlines
  • Indifferent communication and poor responsiveness to client needs.

Quietly Into the Dark Night

This firm was not told it was being fired. It was not ceremoniously stripped of its buttons and epaulets in full view of the whole regiment in the noonday sun, not told to pack up all its litigation files for immediate dispatch to another firm. It was not even initially told anything was amiss with the client relationship. It was given no chance to protest, argue, defend or negotiate.

The fired firm was just quietly going to be choked off, using a tactic the GC called “the long tail,” meaning don’t jerk ‘em around or humiliate ‘em, just gradually turn down the wick until the light goes out.

Ear to the Rail

As a group, lawyers are remarkably conflict-averse, prone to avoidance when confronted with uncomfortable situations, emotionally-charged interactions, or the need to deliver hard news. Accordingly, managing partners, relationship partners, business team heads and practice group leaders should never assume that no news is good news. They should keep a moist finger in the air and ear to the rail, ever alert to any of the five classic signals that the door is slowly closing on their firm:

1. Drought and Denial: If you’ve long handled a high volume of similar matters and the pipeline is presently full, it may take a while to realize that no one is loading the front end anymore. If the client denies any change in the relationship when you ask about the flow becoming a trickle, you may be getting let down easy. “We’re just going through a flat spell” or “we are re-distributing the cases across our firms” may just be a “humane” way of saying goodbye. Get the facts and call the question.

2. New RFPs: If you suddenly start receiving RFPs (requests for proposals) for types of work long handled solely by your firm on a no-bid, just-keep-sending-it-over basis, it’s a sign you no longer enjoy most favored nation status. It’s possible a firing decision is being cloaked in the mantle of due process and hiding behind the claim that the client is just “leveling the playing field” (satisfied clients don’t feel any particular need to level the playing field).

3. Quibbling: Any change in the tenor or content of your working relationship should trigger a concern that the status quo…isn’t. Any quibble that seems disproportionately trivial – billing disputes over minor amounts, pointless protocols, sudden challenges to how your firm manages work – may go beyond suggesting that you are in disfavor. They may signal that you are done – and the client is making a record to rationalize a decision already made.

4. Radio Silence: A sudden drop-off in client responsiveness either to your voicemails or your emails might just be a sign that the client, like you, is overloaded. But your clients are supposed to need you. If they are delaying in getting back to you or declining to talk to you altogether, it could signal that they don’t need you.

5. A Blossoming Decision Tree: If a client conversation starts with “if it were up to me, Joe…” push the panic button. One way clients can avoid the pain of delivering bad news is to claim that the “upstream” decision-making matrix has become complex and convoluted, requiring lengthy reviews that cause lengthy delays (in everything, from time-sensitive decisions to payment for outstanding invoices). The client figures that if you don’t hear anything or can’t get a decision for an abnormally long time, you’ll get the point and just go away. Or even not get the point, but just go away anyway.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

  • http://www.rainmakervt.com Mike O’Horo

    Pam, this is superb, and should be required reading for anyone who sells anything.

    • pwoldow

      I certainly appreciate your feedback, Mike. I must say that frankly it surprises me how ideas that have the common sense force of logic seem novel to people steeped in traditional modes of thought. Hopefully, posts like this illustrate the Buddha’s maxim: when the student is ready, the master appears. In this case, maybe the paraphrase should be: when the heat is on, the wake up call resounds more clearly.

      • http://www.rainmakervt.com Mike O’Horo

        I chalk that up to the fact that virtually every law firm leader came of age, and was (it seems) irrevocably shaped by, 25 years of a level of demand — and the pricing power that goes with it — that would be the envy of every one of their corporate clients. Under such sustained optimal conditions, it’s easy to see how people would form habits and expectations so deeply ingrained and internalized that they’re unaware of them. Awareness is step one of any attempt at change. Mass denial has a way of slowing awareness.

  • http://www.tipsforlawyers.com/ Chris Hargreaves

    Great summary here of the signs to keep an eye out for in a hotly competitive market, this could happen to even the most welded on clients in the blink of an eye.

    Also – the image of somebody with both a moist finger in the air and their ear to the rail made me laugh….

    • pwoldow

      Chris: You are so right that the disconnects can happen so quickly. And, if there are any changes in the legal department leadership, the chances of disconnects or outright changes to the outside counsel crew will be rapid and often silent.

      Thanks for stopping by.