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1. The ACC Value Challenge Reconnecting Cost with Value www.acc.com/valuechallenge INSERT EVENT INSERT DATE INSERT PRESENTER Rev. 2/2009

2. What is the ACC Value Challenge? • The ACC Value Challenge is an initiative designed to bring together law firms, law departments, and other legal community leaders and service providers to discuss how to: • Reconnect the cost of legal services to the value provided; • Assure better and more efficient relationships; • Help improve client service; • Focus on practical improvements to legal service processes that increase value to the client.

3. Why Now? Why should we change longtime service models that have served us for decades/with which we’re comfortable?

4. Dissatisfaction and Rising Costs are Not New The In-House Perspective – A“Tipping Point” … “inelastic” firm costs, despite law departments’ increasing efficiencies - steady 6-7% increase/year … associate salary increases – firms choose pay scales … PPP - profit per partner – an unwelcome driver that controls behaviors in the leveraged law firm model … the $1,000/hr partner (usually worth every penny)vs. the $350/hr associate (usually not that valuable) … The waste of time and relationship arguing over bills rather than focusing on results

5. If they’re currently profitable, should firms care? … what impact will the economic downturn have on firms? … where is client and partner/associate loyalty in today’s firm? … firm managers know they can’t sustain current returns. … fees can’t continue to rise without repercussion. … continuing / increasing problems with firms’ primary asset: the talent pool - both partners and associates. … increasing competition from vendors / off-shored services. … the difficulty of aligning behaviors/business culture to reward lawyers for client service rather than hourly billing or book. … clients who are turning to corporate procurement practices to manage firm costs. … making the practice of law something lawyers love again.

6. Who’s to “blame”? • All of us – it’s about responsibility for change, not finger-pointing • In-House Counsel must own the challenge: … we asked for the billable hour; we got it in spades. … many IHC would rather live with problems they know, than aggressively manage risk or change. … “No one ever got fired for hiring biglaw.” … IHC are often “of” the firms they manage. … IHC, too, often resist establishing business processes. … Lack of skill/experience in executing needed changes.

7. The ACC Value Challenge A (R)evolution in the inside / outside counsel relationship (Defined as: Revolutionary Thinking – blowing up the box, combined with Incremental Progress via Evolved Practices over Time)

8. The Project Drivers • This is not about blame; it’s about responsibility to do better. • While lower costs will result, this is not a cost-cutting project; value is not cheap. But it’s always worth the money. • Proposed change must be institutional / large-scale • A focus on value re-defines quality; it does not sacrifice it. • Tools, education, resources to equip lawyers • Momentum and acceptance to create comfort zones • Departments/clients reward performance (and risk) • Firms deserve to profit; new models must combine incentives for profit, efficiency, quality, value

9. Anticipated Outcomes • FOCUS ON VALUE: Firms will win work from clients based on value: value is defined in the eye of the beholder. • HIRE THE FIRM, not the lawyer. Create relationships/loyalty. • INCREASED RETENTION: Associates and mid-levels focused on counseling and client service / success evaluated on efficiency, client satisfaction and performance. • MANAGED COSTS: Managing the clients’ spend more efficiently: better budgeting/predictability/accountability. • PROFESSIONALISM / CAREER SATISFACTION: Rediscovering the inside / outside relationship based on defined goals and excellence, rather than arguing over bills.

10. Current Activities: • Develop models: create conversation platforms • Collaboration between individual decision-makers, practice groups, vendors, and firms/departments • Regional / ACC Chapter discussion groups in 2009 • Creating practical tools for immediately implementation • Aggressive Metrics: Measure / Move the Needle • Re-focus the AmLaw 200 to rate value (not just size and profit) • Establish an ACC Value Index to promote scores for “value firms” • Improve Law Firm/Client Relationships through Covenant / Sign-Ons • Empower a New Culture and Sustain Our Momentum: Yes, we can!

11. The ACC Value Challenge – Talk! - Meet! - Act! Open Discussion Topics Could Include: • Evaluation Practices / Metrics • Alternative or Innovative Billing Practices • Shared Knowledge Mining • Retention/Engagement Process (Setting Expectations) • Communication Techniques • Retention, Promotion, Compensation, Team Building Tactics • “Global” or Coordinated Service Delivery Options • Internal Process Improvement • Innovative Staffing Ideas • Value and Values: pro bono, diversity, professionalism & balance

12. For More Information: The ACC Value Challenge and its online community are online and open to everyone at: www.acc.com/valuechallenge Or email Susan Hackett -hackett@acc.com or Renee Dankner - dankner@acc.com