April 13, 2009
Gordy Davidson on Succeeding as a Business Lawyer
Last week, I went to a lunchtime student-oriented talk by Gordon Davidson, chair of Silicon Valley firm Fenwick & West, on the topic of "The Art of Being a Business Lawyer and the Changing Business of Law." Gordy laid out 10 tips for being an effective counselor (most of this post is my impression of his talk in my words, not verbatim statements by him):
1) "If "This answer must be wrong," reexamine your assumptions." The goal should be solving client problems, not necessarily answering the questions a client asks.
2) "Do the numbers; the answers might just appear." Lawyers are afraid of numbers, but sometimes crunching the numbers can reveal an easy solution. For example, if you calculate that a particular provision isn't worth very much financially, it should be easy to compromise.
3) "Recognize revenue (and expense) when you see it." Many law students don't know that received cash, recognizable revenue and invoiced amounts are all very different things.
4) "Look for real options; they have real value you can calculate."
5) "Learn the art of negotiation."
6) "Keep your eye on the business reality." Clients can be enamored with their ideas; sometimes a lawyer has to be the voice of reason to point out when they are being unrealistic.
7) "Business sense is as important as legal skill." Clients pay for a lawyer's judgment, not just the lawyer's knowledge of legal rules.
8) "Look for solutions, not just risk."
9) "Save "no" for when you really mean it."
10) "Think about the business consequences of your legal advice and how you communicate it." If your advice requires your client to do things you think the client isn't likely to do, you need to find another solution.
None of these points should be unfamiliar to experienced business lawyers, but Gordy did a great job of providing students with a pragmatic view of life as a business lawyer.
Gordy then turned to a discussion about the changing business of law. He discussed that clients won't pay for training new lawyers. In engagement letters, clients are restricting the firm's use of first and second year associates. Some clients are refusing to pay for any lawyer research, expecting that either lawyers know the answer off the top of their head or will do the necessary research to get up to speed on his/her own dime.
Gordy talked about the firm's fixed-fee arrangement with Cisco to handle all of Cisco's M&A work for a single periodic fee--an arrangement that is working well because Cisco's needs are mostly predictable. Indeed, Gordy said that he would like to do more arrangements like this but clients are reluctant to do so.
The fixed fee arrangement is part of a broader trend away from the billable hour. The alternative fee arrangements can have the benefit of encouraging the lawyer to assess the value of incremental tasks using the same approach the client would, i.e., is the extra effort a good allocation of scarce resources? However, some people think that eliminating the billable hour will reduce lawyer stress, but Gordy doesn't agree. From his perspective, the stress comes from a lawyer's desire to deliver good service to the client, and this desire is the same whether or not the billing arrangement is hourly or on a fixed fee basis.
He discussed the efforts of lawyers to work smarter and avoid duplicative tasks within a firm. He said Fenwick is building out internal wikis to capture the firm's knowledge in a more organized fashion. For example, some underemployed associates are being asked to build out the firm's wiki on cleantech. He also thinks that technology will, over time, reduce a firm's partner-to-associate ratio/leverage.
Finally, he mentioned Legal OnRamp as a marketing tool. It sounds like the firm's experience hasn't been that encouraging. He said the firm had posted about a dozen items to Legal OnRamp but these had not translated into prospective client inquiries.
Posted by Eric at April 13, 2009 10:03 PM | Legal Industry
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