Canadian Lawyer InHouse

3 CANADIANLAWYERMAG.COM/INHOUSE JULY 2015 www.canadianlawyermag.com/inhouse Director/Group Publisher: Karen Lorimer karen.lorimer@thomsonreuters.com Editor in Chief: Gail J. Cohen gail.cohen@thomsonreuters.com Editor: Jennifer Brown jen.brown@thomsonreuters.com Staff Writer: Shannon Kari Copy Editor: James Kang Art Director: Steve Maver Account Co-ordinator: Catherine Giles Advertising Sales Representatives Legal Suppliers: Kimberlee Pascoe Tel: (416) 649-8875 E-mail: kimberlee.pascoe@thomsonreuters.com Law Firms: Joseph Galea E-mail: joseph.galea@thomsonreuters.com Grace So Tel: (416) 609-5838 E-mail: grace.so@thomsonreuters.com Steffanie Munroe Tel: (416) 315-5879 E-mail: steffanie.munroe@thomsonreuters.com Canadian Lawyer InHouse is published 6 times a year by Thomson Reuters Canada Ltd., One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 (416) 298-5141. Fax : 416-649-7870 Web: www.canadianlawyermag.com/inhouse LinkedIn: www.goo.gl/9tytr Twitter: @CLInHouse Editorial advisory board: Sanjeev Dhawan, Hydro One Networks Inc.; Jonathan Lau, Alcohol and Gaming Commission of Ontario; Fernando Garcia, Nissan Canada; Lynn Korbak, Morneau Shepell: Joe Bradford, Bradford Professional Corp.; Dorothy Quann, Xerox Canada. All rights reserved. Contents may not be reprinted without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Canadian Lawyer InHouse disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Publications Mail Agreement #40766500 ISSN 1921-9563 Copyright © 2015 H.S.T. Registration #R121349799 To subscribe or change addresses Call (416) 649-9585 Fax (416) 649-7870 or e-mail Keith Fulford at keith.fulford@thomsonreuters.com RETURN UNDELIVERABLE CANADIAN ADDRESS TO: CIRCULATION DEPARTMENT One Corporate Plaza 2075 Kennedy Rd., Toronto ON. M1T 3V4 Indexed in the Canadian Periodical Index By Jennifer Brown Editor's Box SEND YOUR news AND story ideas TO jen.brown@thomsonreuters.com The value (and profit) of relationships I n early May, this headline from Australasian Lawyer arrived in my inbox (and I wasn't terribly surprised): "Alternative fees 'a failure,' say in-house lawyers." It's not that I think AFAs can't work, but more because it seems there is still too much that hasn't changed between the law fi rm model and what in-house clients are dealing with internally. In fact, according to the 2015 "In-house Report: Benchmarks and Leading Practices," conducted in Australia and New Zealand, the disapproval rating for AFAs was on par with hourly billing. Ouch. Could it be that it's the human side of this that still isn't computing? The relationship component in which the law fi rm partner understands wholly the challenges of the in-house client and tries to act accordingly, instead of trying to maintain billings? The sentiment was reinforced during our 10th Annual Canadian Lawyer InHouse General Counsel Roundtable held in Montreal this spring (see page 18). All the participants said they have dabbled in alternative models, but none seemed too keen about any of the outcomes. What I thought about most after our discussion was something L'Oréal general counsel Nadia Petrolito said. I have heard others say it before but it seems to be an elusive magic bullet for many: "I think the best cost-saving method is to pinpoint the right lawyer. Forget about RFPs, or all these alternative ways of paying and retaining lawyers. If you can pinpoint the right lawyer to help you, that's the best cost saving method I've ever had." Sounds simple, right? Perhaps, but those lawyers are golden to someone like Petrolito. The relationship is probably also highly valued by the law fi rm lawyer she calls. Understanding the demands of business has to be the primary focus for law fi rms. Why do law fi rms still think they don't have to act and serve the way their clients do to their own customers — with the customer and budget in mind? Roundtable participant Daniel Desjardins, SVP and GC of Bombardier Inc., drew the comparison between Bombardier developing 30-year maintenance contracts for train systems and the need to budget for those contracts. The customer asked Bombardier for a fi xed price with only an increase to refl ect infl ation over the 30 years. That means Bombardier has to price today the cost of maintaining that train over time with no scenario for unforeseen circumstances. So imagine his frustration when he asked one law fi rm to produce a budget for a matter and their response was: "It's very complex to do a budget," it was absolutely the wrong thing to say. "Let me talk to you about complexity," he replied. "I don't buy this. I mean, what we've got to price is way more complex than what they have to price." While he concedes some law fi rms are "getting really good" at handling this, others clearly are not. His suggestion is law fi rms should stop chasing the next fi le and take a hard look at the ones they have solid work with and how they can improve the relationship. After all, if you take Petrolito's example the best model for everyone is a relationship that delivers value on both sides.

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