Client Agreements and Definition of Value

Client Agreements and Definition of Value

Client perspective is the primary concern for legal work valuation. Quite simply such work must serve the client's interests or it does not possess any value. The degree to which it does serve those interests will determine how valuable it is. Therefore, corporate law departments should ensure that their own opinions regarding value provided to a company coincides with the views of internal clients.

Mr. Lauer writes:

The valuation of legal work must begin and, to a degree, end with the client's perspective. Inasmuch as the law constitutes a service profession and counsel serves to further the client's goals, it follows that the legal service must serve the client's interests or it does not possess any value. The degree to which it does serve those interests will determine how valuable it is.

For this reason, a corporate law department should ensure that its own view of the value that it provides to the company coincides with the view of its internal clients. Do the in-house lawyers place priority on the same types of service as do the "C" level executives? If the latter expect counseling and advice immediately on request but the attorneys focus on responding to contract-related inquiries in order to keep the corporate machine "humming," that disconnect will prove problematic for the law department. The opposite expectations by the executives, if not matched by similar perceptions by the lawyers, will prove just as deleterious to the law department's standing.

Similarly, different companies place more or less emphasis on the cost of legal service. While every company hopes to keep its expenses to a minimum, budget guidelines may constitute more a goal at some firms while others consider such guidelines to serve as absolute limits on the lawyers' prerogatives to the extent the lawyers want to take steps that would entail substantial outlays.

Accordingly, a law department should engage senior management of the company and its internal clients in discussions about the value proposition in respect of the legal service that it provides and manages. How does the law department's work better enable the company to achieve its business goals? Can the department and the legal team do more in that regard?

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