Bloomberg Law
Aug. 21, 2019, 8:01 AM

INSIGHT: A Chief Legal Officer’s Perspective on Psychology and Client-Firm Relationships

Lawrence Greenberg
Lawrence Greenberg
The Motley Fool Holdings Inc

It is likely to remain true, at least for several years, that lawyers are people, not machines.

That easy-to-forget reality kept informing the discussion among two dozen general counsel and a handful of law firm managing partners as we recently previewed AdvanceLaw’s data-based findings from its GC Thought Leaders Experiment.

Whether we were talking about how AmLaw 20 firms underperform, how service improves under flat fees, or how law firm panels often fail from poor design and management, each finding revealed insights about the human roots of lawyer behavior.

Having signed the Open Letter From 25 General Counsel, I was eager to discuss those findings at the meeting AdvanceLaw hosted and moderated to address leadership challenges for GCs and managing partners. Reviewing reams of data about client-firm relationships may seem a poor fit with the topic of leadership. But understanding common disconnects between clients and law firms is all about leadership, especially motivation.

Behavioral economics and psychology research suggest that, as humans, outside counsel would perform best for clients with whom they have rich relationships and consistent communication. In other words, financial incentives aren’t enough. Consistent with that view, GC Thought Leaders data shows that regular feedback to outside counsel (i.e., talking about how things are going) correlates with significantly better performance (using a five-point scale):

As you can see, each measured variable improves when clients and firms talk, especially cost, quality, solutions focus, and the resultant likelihood to recommend that outside counsel.

That powerful finding reinforces what my peers have already shared about how we get so many things wrong and points to strategies for clients and firms to improve outcomes. Take, for example, DXC’s general counsel, Bill Deckelman, who moved much of his work to non-AmLaw 20 firms when he found that larger firms didn’t necessarily deliver better service, work product, and outcomes. (This is one of the reasons I and 250 other GCs work closely with AdvanceLaw—they help us find top lawyers wherever they are, but not in a stalkerish way).

Or Lee Reichert, chief legal officer at Molson Coors, who hires outside the largest cities, finding that high-quality, reasonably priced, and highly motivated lawyers can be found just about anywhere, if you know where and how to look.

‘Lawyers Are People Too’

Mastercard’s GC, Tim Murphy, also addressed the “lawyers are humans too” theme when he described how law firm summits enrich the client-lawyer relationship. These in-person meetings go beyond what most clients do to build relationships with their firms, but as Tim notes, AdvanceLaw’s data reveals the performance advantage for clients who invest in such summits. In his experience, “Face-to-face conversations build trust, establish priorities, create common vocabulary, and allow everyone to figure out their true goals.”

Did we need statistical analysis to prove this? Apparently. Many of us communicate too little with our law firms, leaving partners (and associates, who are even more in the dark) to guess what we want and infer whether we were happy with results, basing their analysis largely upon whether (a) clients pay their bills—which law firms like—and (b) come back for future engagements—which they also like, subject to (a).

But payment and return engagements are imperfect measures of client satisfaction. They’re delayed feedback; by the time the client pays, or doesn’t, or returns or ghosts, it’s too late for the firm to fix unsatisfactory work, or even for the attorneys to remember what they did.

Further, clients may pay for work they don’t particularly like, and may even return for second helpings, because of inertia and despair about finding and orienting new representation, and from aversion to uncomfortable conversations. Sometimes, lawyer and client can be like the unhappy couple who remain together for years, because neither wants to speak up and hurt the other’s feelings (and think of the children!).

Underestimating the Value of Emotion, Fun

So, if payment is the wrong lever to improve law firm performance, economics and psychology suggest squishier characteristics that may drive lawyer behavior. Tyler Cowen, a prolific economist at George Mason University, says we underestimate the importance of emotion, and even fun in motivating people to innovate and perform. Fun is a social thing—so, how much fun are we having with our law firms and how much fun are they having with us? (Please note that baseball is fun and the season is now in full swing.)

Perhaps more practically, he also says we need to communicate more clearly about the behaviors we reward. Without the right signals, or “social theater,” rewards don’t work, as people do not connect them with the valued behaviors. In any event, money is not necessarily the most effective tool for extracting people’s best efforts.

Adam Grant, an organizational psychologist at the University of Pennsylvania’s Wharton School of Business, has written that employees who have a direct relationship with the beneficiaries of their work are more motivated than those who don’t; the human context inspires them to do their best work.

The AdvanceLaw data may thus show that deep engagement and client feedback will improve law firm performance and client satisfaction. Why don’t more GCs engage more deeply with their outside firms? The legal business model may not help—who wants to spend more time talking to people who charge to listen at six-minute intervals (which may explain some of the effectiveness of flat fees)? And, frankly, who wants to tell grown-up lawyers that they are (hypothetically) arrogant and poor listeners?

As leaders of our organizations, we have a duty to work with outside counsel to do more, though. But what are we, as knowledgeable clients, doing to help our firm lawyers internalize the impact of their work and feel connected to us? Are we helping them see what could be better—or what they have already done best? Are we giving them the chance to provide feedback to us about how we could collaborate better with them, so that we can master our work together?

It’s not enough to dictate orders to outside counsel and expect that a bill alone will incent success. With regular, candid, and constructive feedback, we can promote not just success, but growth as well. Conversely, outside counsel need to engage with us—communicating regularly, understanding our businesses, thinking about holistic solutions to our real problems, and helping us to think about them as people, not automatons that we will replace as soon as the next model of artificial intelligence gets good enough.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Lawrence Greenberg is chief legal officer of the Motley Fool Holdings and a venture partner at Motley Fool Ventures in Alexandria, Va. He teaches courses on business associations and securities regulation at American University Washington College of Law and has practiced technology law in Palo Alto and at the National Security Agency.

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