Client Expectations, MCCA Diversity Scorecard, & Banana Performance

Firms appear to have met client expectations in 2020, perhaps reflecting clients’ appreciation of the challenge of performing while navigating the pandemic (BTI Consulting Survey, noting that the % of clients who would recommend their primary law firm to a peer increased from 49% in 2019 to 69% in 2020).

Still, write-offs have increased during the pandemic, according to 73% of North American respondents in BigHand’s Legal Pricing and Budgeting Report (summarizing data from 800 law firm pricing professionals in North America and the U.K. at firms with 100 lawyers or more).  Requests for AFAs have also increased 28% (Discounts, Write-offs and AFAs are Widespread at Law Firms Since Pandemic, Andrew Maloney, 10/8/21, American Lawyer).  Respondents reported utilizing fixed fees on 23% of matters, capped fees on 27%, collar fees on 29%, portfolio/group fees on 31%, and tiered discounts on 32%.  

41% of respondents reported providing greater visibility into pricing at the start of a client engagement, but only 1% reported providing updates in budgeting throughout the engagement on 100% of firm matters.   Lastly, 75% of respondents employed dedicated pricing experts over the last 18 months.

MCCA Releases DEI Scorecard
The Minority Corporate Counsel Association released its Diversity Scorecard this week, aimed at enabling general counsels and law firms to benchmark a law firm’s DEI progress against peers and the overall industry.

Using 14 years of data from MCCA’s annual Law Firm Diversity Surveys, the Scorecard evaluates law firms on four categories: demographics, recruitment, retention/attrition, and promotion (New Scoring Tool Assesses Outside Law Firms’ DEI Efforts, Jessica Mach, 10/11/21, Corporate Counsel).

General Counsel of 27 companies (including Bristol-Myers Squibb, General Motors, Microsoft, Nike, Tyson Foods, & Verizon) have signed onto the effort, affirming that they will ask their outside counsel to provide their firm’s MCCA Scorecard and will use the Scorecard as a metric to assess the firm’s progress in DEI efforts (MCCA Press Release, 10/11/21).

Banana Performance
“When a firm isn’t on your panel, they’ll do anything in the world for you.  They suck up, so you give them a chance on the panel, and then, [the effort] goes backwards,” laments a banking general counsel (Don’t be a Banana: GCs Complain of Inconsistent Efforts during Panel Terms, Varsha Patel, 10/4/21, Corporate Counsel).  So-called “banana performance” plotted on a graph starts at a high point, then quickly drops and stays low for the bulk of the panel term, before abruptly spiking again when time for renewal.

Commentators have suggested that firms are likely not consciously under-performing, but more likely are being driven by competition to put forth “efforts to woo potential clients that are simply unsustainable over the long-term” (Trendspotter: In-house Counsel Say Exceptional Client Service Too Often Ends at Engagement, Zack Needles, 10/8/21, Law.com).

Recognizing that some partners may be more adept at wooing the client than maintaining the relationship, one GC suggested ditching the partner, rather than the firm, noting that in such cases the “new partner has the drive and is invested.” Another GC half-jokingly suggested writing periodic check-ins into the panel terms.