alt.legal: Know Thyself, Corporate Counsel, and Know Thy Spend

A lawyer who has really done it all and has some important advice for in-house lawyers.

Here’s an unconventional legal career path: graduate from Yale and then UW law, start off as an associate at a boutique Silicon Valley firm until 2001 (does anyone even remember the dot-com bubble anymore?), then be one of the eight founding OGs at a legal e-billing technology startup (before legal startups were cool), then become partner and practice group leader at a law firm (baller!), then back to that startup as in-house counsel until they were acquired by a legal technology behemoth (my dear monstrous Thomson Reuters, where I met her at a workshop).

Her name is Bernadette Bulacan; she’s now a director of the Market Development Group, a subject matter expert for corporate counsel and All-Around Badass.

We chatted through a broad gamut of topics, from how in-house lawyers should shop for outside counsel like they would anything else (i.e., like an informed customer), to what single practice she would brainwash a stadium full of corporate counsel to adopt, if she could.  Read the interview — filled with interesting insights about how in-house counsel do what they do, and ways they could do it better.

First off: I always want to know about interesting career paths. Tell me about yours.

I started practicing at a small boutique called Venture Law Group, with offices in Silicon Valley and in Seattle. Soon thereafter, the firm imploded. The firm basically was a transactional practice for venture capital into high-tech startup companies, and the VC market kind of shut down in 2001. So early on in my career, I did become very sensitive to the business of law. After VLG, I joined a company called Serengeti, an e-billing matter management system. It was also VC-backed. Shortly after I joined, the VC shut us down.

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Yikes.

Yeah, it’s not a great track record, right?

You kept shutting places down!

Yeah. Well, a few days after the VC shut us down, some of the other investors felt like this company still had legs, so they asked if we’d be willing to continue and we’ll figure out a way to fund it. I said sure, and I stayed on for a few years. Working with this startup, I learned a ton about business and great life lessons, and especially the needs of the small and medium-sized market, where Serengeti wanted to play.

But then, I actually went back to practice, because I still felt like a baby attorney. I eventually became the leader of a practice group at Graham and Dunn, where I led the Entrepreneurs and Emerging Companies group. I was really glad I worked with Serengeti, because I always stayed cognizant of how to deliver value to these types of companies.

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Eventually, I did go back to Serengeti, and long story short, we sold it to Thomson Reuters. After the acquisition, I was given a couple of options. I ended up starting this Market Development Group (the MDG) where I go around consulting with corporate legal departments and present at events on how to look at their data, how to manage their outside counsel, and what that looks like.

At Above the Law, we always pontificate about how things have changed, but it’s true that a lot of change is still yet to come. If you assembled all corporate counsel in a giant stadium, and you could brainwash them with a single thing to do differently to be better at their jobs, what would you say?

I would grab them by their collars and shake them and say, “You have the power of the purse strings!” You know, it’s funny to me, because they are the consumers, the purchasers, and if they made decisions about purchasing their outside counsel legal services the way they do purchase everything else, they’d be in a way better place. But the average corporate counsel doesn’t fully appreciate that they have the power of the purse strings. If they did, they’d be more demanding to get more value from their dollars and use data to make some shopping decisions.

What do you mean by that? What are some of those differences? Why do they enter into a weird twilight zone when it comes to retaining outside counsel?

So there are smart ways to use your budget and your legal spend. Just go through the act, even if you don’t actually do it, with an alternative legal provider. It’s asking for things, like “Can you put a budget together for this matter? Can you put together a list of things on this matter that you did well and didn’t do well, so that next time I purchase these hours from you we can make it better?”

Also, maybe it’s time to take a look at Mediumlaw. There are these medium-sized law firms that are stuffed with Biglaw refugees, and they have the same chops as their counterparts in Biglaw, but they just wanted a different environment and smaller law firms, and their rates will reflect that. But they’ll still provide the same quality of legal advice.

Corporate counsel sometimes get into this weird rut of using the same firm over and over. It can be a good thing to stay with the same firm, but there are ways to use data to measure whether you’re getting good results from good people at that firm.

These seem like common sense behaviors, but there are factors that apply pressure away from that common sense.

Yeah. Corporate counsel need to just look at the type of work and find the right law firm to do that work. What are those things that are repeatable, where you’d like a dedicated team? You’re not going to be able to afford a dedicated team at a high-end New York firm, but there are fungible tasks that carry a little less risk that are repeatable, and you may be able to retain a dedicated team of lawyers right-fitted at a medium law firm. And frankly, that’s the bulk of the work that a lot of in-house departments deal with.

Well, some corporate counsel just decided to hire more headcount in-house and do it themselves.

Well, I’d say that’s kind of a smart activity. We do see more work going in-house. We see corporate counsel staff count increase, and see more legal spend internally than externally. Law firms need to ask themselves, why is this happening? Why are we not losing work to other law firms, but to internal resources? What makes that valuable and more interesting? The answers are pretty obvious: someone more conscientious, more effective, understands how risk averse the company might be — someone with deep relationships within the company.

For more on Bernadette’s career and views on hiring outside counsel, this interview continues on the next page….

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