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HMS, Gene DeFelice, EVP, General Counsel & Secretary

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HMS, Gene DeFelice, EVP, General Counsel & Secretary

HMS is the strategic source for innovative cost containment solutions that benefit government and commercial healthcare programs. With 33 offices around the country, their clients include health and human service programs, the Veterans Health Administration and managed-care plans.

 

Q: In your best relationships with outside counsel, what are three important things other lawyers could learn from them?

A: 1. Be loyal. The sophisticated ones have this one down in spades. They know how to do this without being obsequious—a true partner. Like a partner, they make me feel like they have my back, they will keep me informed on things I need to know and they will watch out for me when I am about to do something ill advised. I have been blessed with some great long-term relationships with some great lawyers. 2. Ensure the cost value relationship works at all times from the perspective of the client. For example, if the client feels a project has gone off the rails and not delivered value commensurate with the bill, be prepared to radically reduce or eliminate the bill without argument, protest, whining or making the in-house lawyer go through line-by-line justifications until the point where the in-house lawyer feels that commensurate value has been delivered. Regardless of hourly billing, and regardless of whether or not the time was actually spent, the real important point is to deliver value (as perceived by the client) commensurate with the bill. Take time to listen to the in-house counsel to understand why he/she feels that value wasn’t delivered and how value is perceived, and address that perception of value going forward. 3. Delight the in-house lawyers. Don’t just satisfy. Don’t just shoot for a good legal result. Pretend you are inside counsel. The goal is to delight them.

Q: And, of course, the follow-up: what are the top three things that lawyers could learn from your least successful relationships with outside counsel over the years?

A: 1. The in-house lawyer/legal department is your customer and you are selling something. 2. Check your ego at the door. 3. Listen.

Q: How has purchasing legal services changed?

A: There have been many changes in the purchasing of legal services since I became a lawyer three decades ago. The business model has changed and undoubtedly more changes are in store for us as technology reduces geographic barriers, increases responsiveness and improves productivity. There is also a fundamental disconnect with the amount of money that lawyers make and what they charge for their services and the value that is perceived to be delivered in most cases. Some of the changes that I have seen include the following:

  • It is easy to find great lawyers who are subject matter experts, and there is less separating them from each other in terms of substantive performance or subject matter expertise.  Thus, cost and ease of working with an attorney play greater roles in the sourcing decision.
  • There is much leaner staffing.
  • Corporations are less willing to pay for training first- or second-year associates.
  • There is much more accountability in terms of price and budgets and case/project management plans.
  • Clients can much more easily get steep discounts without volume commitments.
  • Clients have a much higher degree of expected responsiveness, often demanding virtually immediate responses.

Q: With all the highly qualified lawyers out there, what factors really influence your hiring decisions?

A: Price, ease of doing business with the attorney, likeability and effectiveness.

Q: Competition is fierce among law firms; what have law firms done effectively to market to you that captured your attention?

A: I notice free CLEs in-house for the legal department with no strings attached, which often builds relationships. I also notice when they provide something of value (summaries of the law, offers to audit contracts and write a report, etc.) for free to build credibility and the relationship. Lastly, I take note when attorneys offer contingent fee arrangements—not just hybrid fees or success fees on top of discounted rates.

Q: What law firm trends are you are seeing that you would like to come to a screeching halt?

A: I would like to stop strangers that I do not know from bombarding me with solicitations the day we are sued seeking to represent us. Also, I dislike spending money on slick, glossy marketing materials that say nothing and remind me of a car brochure as well as cold calling on LinkedIn.

Q: What is your greatest challenge as in-house counsel?

A: My greatest challenge is functioning as a business executive first and a lawyer second.

Q: Lawyers are often worried that seeking client feedback, ascertaining the client’s preferences or learning more about the business will be viewed by the client as an imposition. How would you respond to that concern?

A: I honestly don’t think that lawyers are often worried that seeking client feedback will be viewed as an imposition. I think they may not really want the feedback. It is axiomatic that seeking the feedback from a customer is a good sales tool. You have to really listen and act on the feedback though. Merely asking for it and not listening or actioning it would be worse than not seeking it in the first place.

Q: Any other advice you would like to give law firms?

A: Aside from listening, solving problems and delighting us, please understand and accommodate our bureaucracy and don’t foist your firm’s bureaucracy on us. For example, I have walked away from firms that have sold me the business but they want to enter into a long negotiation on an engagement letter over things like advance conflict waivers, photocopying charges, etc. I typically don’t want to get caught up in discussions on the firm’s internal committees and approvals, including billing committees, etc.

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