Jeff Carr’s FMC Technologies “End of Year Memo to Law Firms”
December 4th, 2012 by
|To||Relationship Manager||Date||October 18, 2012|
|From||JW Carr||cc||Legal Team Attorneys|
|Subject||End of the Year Matters and Looking Toward 2012|
|As we come to the end of the year, it’s appropriate to both look back and look forward.
Holiday Cheer and Gifts
The FMC Technologies Commitment to Integrity provides that our employees should not accept gifts from any vendor if these could be perceived as creating a conflict of interest. As such, while we appreciate your firm’s generosity, we would much prefer that you support ACC, GCRT, CPR, pro bono or charitable pursuits, or otherwise reduce your costs and overhead.
End of the Year Matters
We place a very high premium on timely submission of invoices. Indeed, that concept is specifically included in the Covenant with Counsel that forms the basis of our B2B relationship. It is important that your billings are fully up to date so that we can close out the year. To that end, please keep the following elements in mind:
New Requirement to Trigger ACES Payouts
In the spirit of continuous improvement, we recently completed an internal review of our ACES procedures and have made a small but important change in our requirements. We have determined that our outside counsel will need to provide us with a “trigger” for us to initiate our ACES payout procedure. At the completion of a matter, when your firm submits their “final invoice” the invoice must be marked as “FINAL.” In addition, when it is uploaded into Serengeti Tracker, you must include – in the Description/Comments field on the Invoice Summary screen – words to the effect of “This is the final invoice for this matter. Please process the ACES payout for any fees that have been withheld.” This will ensure that we are timely in calculating the ACES payout for all the fees that have been withheld. In the same manner, for annual, general type matters, that do not have a defined end, The last invoice that your firm posts for any given year (which will presumably be posted in December) must also be identified as the “FINAL” invoice for that year, in the same manner as indicated above. We are confident that this new requirement will ensure that all ACES payouts are made in a timely manner. Thank you in advance for satisfying this new requirement.
FMC Technologies is firmly committed to partnering with our preferred law firms and implementing cutting edge techniques to foster that relationship. We are also committed to finding ways to deliver appropriate legal services better, faster and more cost-effectively to our common customer, FMC Technologies, Inc. This principle is consistent with our commitment to a focus on the value of services rendered and on legal service delivery systems based on efficiency and effectiveness. Your firm’s commitment to these principles is the essential element that qualifies your firm to participate in the FMC Technologies alliance counsel program and is literally why you are part of our high performance team. We understand that your firm must be profitable to remain healthy, but we ask you to focus on profitability through cost reductions and efficiencies as opposed to top line revenue growth. Our industry has changed permanently and is moving towards a relentless focus on value. We believe that by adopting the disciplines inherent in our approach you will be well positioned to benefit as the legal industry changes.
So, if you’ve not already done so, you will probably soon turn to the issue of your firm’s billing rates for 2013. Undoubtedly, many of your clients have adopted policies prohibiting fee increases without approval or are seeking reductions in current fee structures. As you know, to remain true to our partnering relationship, and our performance-based engagement terms, your firm’s rates really don’t matter that much to us. As we’ve undoubtedly discussed before, the fact that you raise rates has absolutely no bearing on the matter budget. Indeed, should a firm raise its rates by 10% we would expect an offsetting gain in efficiency. If you focus on cost reduction and efficiency without sacrificing effectiveness, our ACES program will help grow your firm’s profit margin on our work as well as work you do under similar structures for others.
As you know, we strive to be your most important, but least significant customer. And in that spirit, we hope you’ll take the time to consider these observations as you contemplate the firm’s organizational, financial and compensation structure. As always, we’re more than willing to get together with you at any level — management, practice group, marketing, or young associates – to discuss creative partnering for long term sustainability.
All the best
Jeffrey W. Carr
Senior Vice President, General Counsel and Secretary