Burrowing through some old files, I stumbled on notes I took at a Fulcrum conference that in May 2000 focused on partnering. Tom Brooks, then the administrator of what was then AT&T’s legal department, spoke about their efforts. My notes covered these actions.
AT&T sent an RFP process to 15-20 law firms in each of several geographic areas. AT&T required its firms to bill within 30 days or suffer a 10 percent discount. They locked in rates for 12 months or the duration of a lawsuit. A decade ago, according to my notes, AT&T obtained discounts that ranged from ten to thirty percent (30%!). Brooks said that “alternative billing did not really work, contrary to expectations. He also said that “small firms have been a very viable choice.” My final note was that bills went first to the finance organization where they were audited before going to the lawyers.
My take-away from this is that the tools of external cost control in use today are in many respects the same as those wielded a decade or more before. To be sure, e-billing, offshoring, virtual firms, and task codes were not available to AT&T at the start of this century, but in full play were competitive bids, convergence, discounts, outside counsel guidelines, prompt billing, and bill auditing. Change is gradual; in fact, I believe, new practices account for a smaller portion of managerial change among general counsel than does the broader diffusion and enhancement of pre-existing practices (See my post of Sept. 13, 2006: focus on common good practices, not novel “best practices”; Nov. 6, 2007: focus on execution more than on innovation; and July 11, 2008: execution-as-efficiency and execution-as-learning.).