Bloomberg Law
March 10, 2015, 3:57 PM UTC

Seeing Through A Request for Transparency

Daniel Steinberg

Editor’s Note: The author of this post is the director of marketing for Viewabill, a company that manages billing activity.

By Daniel Steinberg, Director of Marketing, Viewabill

“Transparency” can be a high-voltage word when it comes to the delicate area of attorney billing. In the stress of the moment, lawyers sometimes interpret a request for transparency as an implication that they’re intentionally hiding something, or that there’s something wrong with their work.

“The initial feeling is one of shock, and indictment. Are we not doing the work?” said Rick Howell of Perkins Coie to a roundtable group earlier this year.

Such a reaction is understandable when “transparency” has so many connotations and human nature is to assume the worst.

“When we reach out to firms there’s a real pushback to transparency of that data”, said Dan Baker, Global Legal Operations Lead at LinkedIn . “I think it’s maybe because they don’t understand the reason we’re using it.”

So why are clients requesting transparency and what do they do with the information?

Contrary to some law firms’ initial fears, many clients are just looking at big-picture data.

“I’m not looking for, and I don’t have time, and I don’t know anyone who has time, frankly, to go through line information of what’s going on in a matter”, said Baker. “The aspect someone in my seat is looking for is simply accrual information. We’re looking for hours and spend.”

Justin Liu, a panel participant at the roundtable and Associate General Counsel at MGM Resorts International agreed: “[We look to] the reports that encapsulate the information in a useful way, on an aggregate scale.”

Visibility is a hot topic in legal circles today, but often the goal is merely to enhance predictability.

“Frequently, we have our business and finance folk, and sometimes even members of our board of directors asking us how much a certain legal matter has cost us to date, or what we’re spending on a litigation”, Liu said.

With insight into pre-bill activity, departments are even able to allocate more resources to their outside counsel. According to Baker, “If I’m able to get more information, more accrual data, and I can put that into a forecast, I can then budget for more. I can pay my firms more.”

While managing legal spend has historically been the primary metric of legal department success, at Viewabill, we’re starting to see a more evolved approach to transparency — one where the attorney-client relationship is a better barometer than legal spend. Legal departments are under pressure to take on a more business-oriented approach towards managing risk for their organizations and are looking to outside counsel for support.

Michael Haven, Chief Litigation Officer at NetApp , described an incident to the panel where he requested one of his law firms provide him with transparency into NetApp’s legal spend with them. The firm, whom NetApp had been working with for over 10 years, refused.

“We had some very difficult conversations with the firm,” Haven said. “We told them they were no longer a good fit because they were refusing to adopt the technology…and they knew that as long as they continued to take that position, we would never pay for their services billed on an hourly basis.”

Viewabill tells law firms that adopting measures to improve how legal services are delivered provides benefits for the law firms, too. Not only because it allows for differentiation, but also because it encourages more profitable operations.

“We’re relaying information on as frequent a basis as the client requests,” said panelist Michael Hourwitz of Venable. “And, frankly, I know it may seem like the opposite, but from the firm’s perspective, we welcome that. Because it forces us to be more disciplined, and that discipline means that we will be more efficient and more effective.”

For some law firms, this realization takes time. “After that,” said Howell, “it opens up a whole new set of avenues that we can pursue, particularly around what tools are also available to them to help them manage their matters, once they know there’s some transparency with the client.”

The legal industry is no longer a zero-sum game. With better and smarter communication and collaboration, law firms and legal departments are raising the tide. And that’s where transparency comes in. It’s not an attack; it’s an offer to improve the industry. Together.

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