What do the stories "Qualcomm Meets a Stern Judge" and "Banking Giant Pioneers Adviser League Table" have in common?
The first is about
Southern District of California U.S. Magistrate Judge Barbara Major coming out swinging against lawyers involved in the by-now famous and tremendous discovery fiasco by Qualcomm, involving its failure to turn over hundreds of thousands of documents to Broadcom. Among other things, Major had this to say:
- [This constitutes] "gross misconduct on a massive scale"
- "If there isn’t some kind of sanction, there’s no deterrence. How can this possibly be tolerated in the age of digital evidence?"
- [Absent an explanation,] "the inference is that Qualcomm intentionally decided not to search for these documents"
- And my own personal favorite: "At best, the documents reveal a massive responsibility deflection and an incredible breakdown in communication of leadership between [the] client, the attorneys and among their counsel."
Henceforth whenever anything goes wrong hereabouts I intend to ascribe it to a "massive responsibility deflection."
She reserved a ruling on sanctions just as, apparently, Qualcomm has reserved deciding whether some malpractice litigation might be in order.
Now, I don’t know what the real story is at the bottom of this all but unbelievable imbroglio, but one of the smartest observers I know of this scene proposed to me that it was a foreseeable breakdown "where everyone’s responsibility is no one’s responsibility." He may be right; and people may be suffering severe court sanctions, at the very least, as a consequence.
The second story reports:
"Banking giant UBS has launched a radical review of its global legal advisers in an attempt to slash costs and become one of the first top financial institutions to formally grade law firm performance.
"The review, UBS’ first in five years, is set to shrink the bank’s cross-border panel. […] The Swiss-based bank said the move is in response to increasing legal bills which now account for 1% of UBS’ total annual revenues."
Now, 1% of UBS’ revenue ~ US$400-million. To put this in perspective, if you or I could start a firm today dedicated solely and exclusively to UBS’ total legal spend, our firm would be around #65 on the AmLaw 100.
And there’s more: For several months, at least 100 of UBS’ in-house counsel have been scoring outside firms on a 1 to 5 scale across seven criteria including speed, quality, and cost. As UBS’ GC, Peter Kurer, put it in what would be pluperfectly obvious in any other relationship, "the bank’s legal bills were too large not to be analysed and that it was important that both firms and clients take steps to improve efficiency." Once the point scoring system accumulates sufficient data, it will begin to come into play in determining which firms stay on the panel and which are invited off.
Now, what do these two pieces have in common?
The clarion call embedded within each demanding highly professionalized and full-time management of critical activitiess within your firm:
- Qualcomm’s "massive responsibility deflection" calls for your firm to have a dedicated General Counsel.
- UBS’s tightening up of its panel criteria and partial quantification of the basis for selection calls for your firm to have a vibrant and energetic partnership among your CFO, your Director of Client Relations (you have such a person, of course, do you not?), and key relationship partners to the client, all in service of delivering not just legal services of impeccable quality but client service of impeccable quality.
If you are still enamored of the antique notion that talented and whip-smart lawyers can handle all these challenges in their "spare time," when they’re not serving clients, be prepared to find yourself on the wrong side of an angry US Magistrate Judge, or of a calculating and determined General Counsel with a budget sizable enough to vault one of your competitors into an altogether different league, leaving you proud, comfortable, and irrelevant.
