Two of Baker McKenzie’s top global strategists were in Asia recently to study the region’s growth patterns and how they fit into the firm’s new business model.
David Cambria, the firm’s global director of legal operations since June last year, was more recently appointed to chief services officer to reflect the strategic importance attached to the law firm’s expanding services function, underpinning efforts to transform its operating model to better optimize value for clients and reshape the way it does business.
Cambria was previously global director of operations – law, compliance and government relations at Archer Daniels Midland, a Fortune 50 company and one of the world’s largest agricultural processors.
He arrived in Asia recently with Jae Um, who joined the firm in January as director of pricing strategy, responsible for advancing its approach to pricing past traditional models like billable hours.
In a joint interview with Asia Business Law Journal, Cambria defined the firm’s new legal operations approach as the application of business discipline to the delivery of legal services, “which assists our clients with the ultimate goal of aligning with their internal business stakeholders and initiatives”.
“There has been pressure on corporate counsel to connect legal issues with business outcomes,” he said. “More companies are adding these legal operations roles.
“With today’s regulatory challenges and cost increases, legal departments are struggling to do more with less, so they are tapping into lawyers and professionals to help with data analytics, project management and pricing management. We are seeing a larger acceptance and a desire for legal operations to be present in large organizations.”
Um added: “Legal operations also has a lot of variations to fit the size, shape and footprint of the client company and its legal department.
“I also think there are cultural subtleties, in terms of how the standing of the general counsel can vary from country to country, and relations to the board of management, too,” says the New York-based strategist with more than 12 years of cross-functional experience in legal business. “The emphasis is on compliance and each company has its own priorities.”
Cambria said Baker McKenzie created its services function, then with his input had recognized five “capabilities” that it says enable its frontline legal teams to deliver good outcomes with greater consistency: (1) legal project management; (2) pricing strategy; (3) business management; (4) alternative legal services; and (5) service design.
“The intention of our firm is to better connect with clients, beyond the traditional legal advice, and transfer that to business initiatives,” he said.
“The services function rethinks the way we deliver legal expertise,” added Um, “and how we package this expertise to help business. The five capabilities fit together so we can respond to change, because business needs of our clients tend to shift, and service design and alternative legal services is about reshaping legal services to fit change. Embedding a pricing strategy enables us to shape, package and market our services.”
Um said the global perspectives of Baker McKenzie enabled it to have a broader sense of macro trends and geopolitical shifts, adding that “things differ from region to region”.
“For example, AI, blockchain and big data will touch most commercial concerns in the next 10 years, but not all at the same time,” she said. “Translating these macro trends into trends locally is where the Baker McKenzie differentiation will be, supported by business managers in each market.
“In Asia, there are different rates of very rapid development in the region – commercial opportunities for our clients pop and wane more quickly, unlike in mature economies, so law firms servicing Asia need a customised approach to each client; it’s a challenging environment to compete. We have to arrange multiple models and combine them in new ways for clients.”
Cambria said the strategy had received a high level of engagement and “the desire to understand more [from counsel] in some Asian markets where this sort of material is not readily available”.
Um said the firm’s new pricing strategy is a simple reflection of supply and demand. “We have service delivery teams and client teams very close to market demands,” she said. “Our service delivery is thinking about turning our expertise into market offerings.
“The pricing strategy is thinking about changes in demand and packaging that to suit different sizes and shape business needs. If the client has needs that are not able to be fully scoped by the in-house team, and somewhat open-ended, then billable hours is still the simplest way to deliver legal services.
“But with pricing models, we look at whether it makes commercial sense, whether it needs to be matched and sorted; we need to challenge and talk to clients and understand their business, and then sort our talent and our capabilities to find what is the best model to balance risk and reward.
“The pricing mechanism exists to offer the best services, building in our commercial approach and the ability to package and deliver services. As our clients compete in an increasingly complex environment, their expectations for outside counsel continue to rise. By investing deeply in professional and business capabilities, Baker McKenzie is building for the future.”