Advancing the Legal Profession

Firoz Dattu wants to encourage quality and eliminate complacency within the legal profession. The company that he founded, AdvanceLaw, does just that, by identifying high-performing firms and lawyers for the general counsel of over a hundred large organizations, including Panasonic, MasterCard, Clorox, eBay, Nike, Unilever, and Google.

Launched in 2010, the idea for AdvanceLaw developed because Dattu saw that in-house counsel were reluctant to take risks associated with moving work away from incumbents, even when the incumbents didn’t live up to expectations. Finding new counsel is both difficult and time-consuming, and switching to an unknown quantity doesn’t guarantee higher quality or efficiency. “Historically, when switching costs are high, complacency tends to set in and markets don’t perform as well,” Dattu says. “We wanted to find an easier and more reliable way for in-house counsel to identify top lawyers.”

In the context of a changing marketplace

This focus on finding top lawyers relates to a change in client preferences, as discussed in a Harvard Business Review blog post co-authored by Dattu. The post looked at data showing that general counsel were pulling high stakes matters away from pedigreed incumbents and suggested that the driver was not only cost, but also service. The data revealed, for example, that the pedigreed “white shoe” incumbents exhibited less responsiveness than other law firms.

Unpacking this further, Dattu believes that the growing migration of lawyers across law firms may in part account for GCs’ changing preferences. “If impressive talent is increasingly finding a home outside the most pedigreed of law firms—such as Wachtell, Cravath, and the Magic Circle firms—that would explain clients’ willingness to send important work beyond the usual suspects.”

To test this out, AdvanceLaw recently polled 100 GCs of large companies to find out if their personal experience reflected that “top legal talent is increasingly found outside the Am Law 20 and Magic Circle firms.” The new survey data bears this out, and Dattu will soon publish an article revealing the survey’s specific findings. Dattu clarifies that strong talent is still very much available at the most pedigreed of law firms: “Those firms have done well for a reason. But great talent is increasingly available elsewhere, too.”

AdvanceLaw and performance transparency

This quest for top legal talent is central to AdvanceLaw’s work. GCs that are part of AdvanceLaw access its global network of vetted firms and lawyers. “We work closely with each of our GCs and their in-house teams to figure out how to drive the most value for their companies,” Dattu says. The selection process for law firms in the network is rigorous. To work with AdvanceLaw, a firm “needs to exhibit strong quality, expertise, efficiency, and innovation,” he says. “Most importantly, the firms have to be deeply—not just superficially—committed to stellar client service.”

But transparency is the key to the system’s success. GCs evaluate the lawyers they use through the AdvanceLaw network, and evaluations are shared amongst users. Using performance data to better inform decision making “is an emerging approach you see in a number of different industries,” Dattu says. AdvanceLaw takes it one step further by ensuring evaluation legitimacy. “Instead of an online portal, it’s the personalized collection of feedback and scores directly from in-house counsel we work with, shared in a confidential manner.”

Because of the evaluations, in-house clients are confident that they’ll be able to “migrate from just pretty good lawyers to great lawyers, who are extra-motivated to put their best foot forward.” Dattu says all this is at the heart of AdvanceLaw’s mission: “The GCs who work with us are fired up. They are looking for opportunities to drive value for their companies, while at the same time improving the market and profession through better transparency.”

And the law firms in the group are likeminded. They know that the path to more work is earning strong evaluations and impressing their clients—and, notes Dattu, “They, too, are excited about what this can do for the profession. Historically, a lawyer doing a great job for a client doesn’t have a ready mechanism to earn more work from several other clients. As a general proposition, the tighter the link between top performance and market success, the more excited lawyers are to exceed expectations.”

Lumen Legal has been part of AdvanceLaw’s network, as a non-law firm provider, for the past three years. Lumen Legal provides legal staffing and outsourcing to corporate legal department and law firms. David Galbenski, Executive Vice President of Strategic Initiatives at Lumen, says he appreciates the feedback loop and the increased credibility that comes with it. “AdvanceLaw’s performance transparency allows for faster change within the industry.”

With transparency comes transformation

As transparency becomes the byword in the legal services industry, many changes are taking root. Dattu says data analysis and insights from the CEB Legal Leadership Council, as well as lessons from the ACC Value Challenge, are helping in-house counsel define and measure law firm performance, ultimately leading to better outcomes. “It’s notable that two of the most prominent GC organizations out there are strong advocates of performance transparency and accountability.”

This has resulted in a strategy shift for all parties. Law firms are increasingly concentrating on project management and efficiency, according to Dattu. “Some firms may be posturing, but a large number of firms are genuinely investing in this,” he says, “and it’s making a difference.” This is consistent with survey data AdvanceLaw will soon publish on whether GCs care more about billing rates or about inefficiency. “Everyone talks about sky high billing rates, but that’s not necessarily what frustrates GCs the most,” says Dattu. Leading firms are also beginning to “use big data to analyze historical information and achieve predictive power around both billing and outcomes.”

Data should also help general counsel address what Dattu views as one of their key challenges: how to receive top treatment from a core group of law firms who understand their business, while at the same time staving off complacency. “It’s a delicate balance,” Dattu says. “What I’d most like to see, whether through AdvanceLaw or otherwise, is for in-house legal departments to rigorously collect and use law firm performance evaluation data to inform their selection decisions.” He notes that it is entirely possible to build better relationships with law firms while at the same time reminding them of how they are performing and what the client is looking for. “On the whole, law firms would welcome this level of transparency. It helps them get better.”

Enlivening the legal profession

“AdvanceLaw’s overarching mission is to have a positive impact on the legal profession,” Dattu says. More specifically, Dattu would like to eradicate the “malaise” felt by many law firm partners and associates, where the focus is often on short term results and profits per partner. “This gets at the root of the problem. You have smart, well-intentioned lawyers who chose to enter a service industry. And so many of them are forced to choose between profits on the one hand and client service on the other, and it wears them out, emotionally and physically.”

As Dattu notes, performance transparency fixes this, suggesting that a better tie between good work for one client and revenue generation from several other clients eliminates the tension between great service and financial success. “We have to fix the market, in order to help the profession.”