ACC rating index unnerves firms

11 January 2010 | By Matt Byrne

”We’ve got a goal for 2010. We hope to have 10,000 evaluations in by the time of our annual meeting at the end of October.”

These words, spoken last week by Fred Krebs, president of the Association of Corporate Counsel (ACC), may well send a chill down the spine of many a ­private ­practice lawyer.

For those who do not know, the ACC is the world’s largest bar ­association for in-house lawyers. It has around 25,000 members working in more than 10,000 companies and non-profits in more than 70 countries.

As such it has a little muscle. And last year it started using it.

In December Krebs was in ­London, partly for a spot of ­socialising down at the Cavalry and Guards Club in Piccadilly, but also for a board meeting of the organisation’s European chapter.

High on the agenda was an update on the progress of the ACC’s value challenge, a concept designed to measure what its members are paying the firms they use and what they are getting back. Krebs says the initiative has gathered significant pace in recent months.

“The point is to make firms think differently about their ­business model,” Krebs asserts.

The economy has helped out in that regard, but Krebs and his team believe much more can be done. At its 2009 annual meeting in Boston last October, the ACC launched a new system of rating law firms, known as its ‘value index’.

In the value index, in-house counsel are encouraged to rank the firms they use on a range of ­criteria and then post online comments on their experiences, either on the record or anonymously.

In essence the index is a client satisfaction measurement tool whereby ACC members share ­evaluations of the firms they engage. As the organisation puts it: “It is also an instrument to help shape the thinking and dialogue between firms and in-house ­counsel about what constitutes ‘good value’ in legal services.”

Lawyers use a five-point scale where one is poor and five is excellent to rate their outside counsel on the following criteria: understanding objectives/expectations; legal expertise; efficiency/process management; responsiveness/ communication; predictable cost/budgeting skills; and results delivered/execution.

They also answer the important question: would you hire this firm again?

“It’s like a Zagat for law firms,” adds Krebs, referring to the US restaurant guide.

Krebs is hoping to increase the number of these evaluations ­significantly.

“We’re anticipating the pace will increase as we’ll be making ­significant efforts to spread the word,” Krebs says. “Initially our focus has been on creating the ­system. Now we’re spreading the word and getting people ­comfortable with putting data into the ­system and also for folks to ­recognise it can be a useful tool. This is about using technology to expedite and aggregate what our members already do - that is, talk about the firms they use.”

There has been considerable discussion of the value index as well as some public feedback, ­primarily on online blogs.

Krebs admits that some of the feedback from firms so far ­suggests they are not all fans of the index, but as the head of an organisation aimed at promoting the interests of in-house lawyers, that is not his primary concern.

“Certainly some law firms don’t like it,” admits Krebs, “especially as the comments can be done ­anonymously as well as identified. But it’s our intention to provide these evaluations to law firms.

“Some have expressed concern, mainly saying they don’t like the concept of being evaluated. But most want to see how they’re being evaluated and we’re in the process of providing that. We’ve already done it when we’ve been asked by a firm directly, but we’re looking to do that in an automated way. We hope this will go live later this month [January].”

The ACC’s primary goal is to improve the value for money its members get from outside counsel. Firms might not like the feedback, but Krebs and his members believe this is the way of the future.

As Krebs puts it, if anything is likely to drive change it is 25,000 in-house counsel telling you what to do with your $1,000 an hour.

The association of corporate counsel

The ACC was founded in 1982, when it was known as the ­American Corporate Counsel Association.

In recent years its international presence has grown significantly. It now has around 25,000 members, 10 per cent of whom are based outside the US.

Although it remains headquartered in the US, the ACC’s growing international footprint has led it to extend its overseas chapter structure. It currently has a chapter in Israel, two in Canada and one in Europe.

“I’d anticipate by the end of 2010 we’ll have another added,” said Krebs. “We need a critical mass of in-house lawyers when we want to establish a chapter. The European chapter doubled in five years.”