Clients will shake up BigLaw

DLA Piper is at the gates of a storm over joke emails, but the real message is about client power

Tim Bratton

Much has been made of what you might call (if you’re a lazy blogger) DLA Pipergate, aka the story of the associates and their jolly email japes about bill padding. Except the jokes don’t look so jolly now they have escaped the DLA Piper servers.

Amusing as it might be to see the joke turned on the jokers, it would be wrong to draw any conclusions about DLA Piper as a firm or its culture from the content of those emails. I am willing to bet that most organisations, not just law firms, have some emails hiding on their servers that would – if taken literally and out of context – show that organisation in a bad light. Anyone doing too much hand-wringing at the email etiquette of others had better keep their fingers crossed that their luck holds.

For me, the most interesting thing to come out of this is an extraordinary article by Mark Harris, CEO of Axiom, on Forbes.com.

I found the article extraordinary because you rarely see law firms turning their fire on other law firms so publicly. Harris pulls no punches in his (admittedly self-interested) view of BigLaw, the charging model, the incentive model, the culture and the conflict those models have with clients’ interests.

But extraordinary does not mean wrong. Perhaps it takes the odd sabre-rattling moment to remind the legal market to wake up and smell the coffee. Despite constant – in fact, boringly consistent – talk of market change, the hourly rate is alive and well, and remains the starting point of most fee negotiations and the cornerstone of law firm metrics.

And in terms of who needs to wake up and smell the coffee, I am not sure the real target of Harris’s article is actually his competitors in traditional law. I suspect he is more than happy to see them continue hourly billing themselves to an inevitable death. As is evident from a couple of references towards the end of Harris’s article, his real target is clients. Clients hold the purse strings, money equates to control and control can effect change. No amount of blogging, tweeting or legal ceremony award-giving is going to change the fundamentals of legal service provision. Only the reallocation of client budgets will do that.

DLA Pipergate says nothing much at all about DLA. It is a high-calibre firm – who really cares if a couple of associates went off-piste for a bit of an in-joke, no doubt after pulling yet another 12-plus hour day? You’ve got to get your kicks somehow. But the real side-message of this episode, as articulated so well by Mr Harris, is about clients and, dare I say it, GCs.

To quote Harris, “If we’re going to see real change, then clients must allocate their business accordingly, as many are starting to do. How does that saying go? Fool me for 100 years, shame on you. But fool me for another 100 years…”

The market may be ripe for change, but it’s up to those of us on the buy-side to make it happen. The next few years really are ‘put up or shut up’ time. Some email joshing is not a crime. But a failure to deploy legal budgets in a way that ensures shareholder value is.

See a full version of this article at thelegalbratblawg:http://legalbratblawg.com/2013/04/07/a-modern-day-aesops-fable-the-gcs-and-their-budget/