By Cash Butler and James Johnson.

We had the distinct pleasure of conducting one of our first interviews for the ClariLegal Value Series with Russ Dempsey of AIG. Russ leads the legal team in AIG’s group retirement division, with a focus on financial services and retirement products. Russ is also highly involved with the Association for Corporate Counsel – in particular, the ACC Value Challenge, and a member of ACC’s Board of Directors. Russ’s team at AIG handles a wide variety of legal issues for his division, including contractual matters, dispute resolution, and regulatory compliance with the SEC, FINRA, IRS, Department of Labor, and analogous state agencies.

In terms of use of internal or external legal services, Russ noted that efficiency and bandwidth are key factors in deciding between handling legal matters with in-house resources versus outsourcing such work to outside counsel or third-party support vendors. As an example, Russ noted he recently outsourced a review project; according to Russ, “we did that because of bandwidth…we could do it here [in-house], but it was more efficient just to outsource the work”. Russ stated he evaluates in-house-versus-outsource on a case-by-case basis; Russ noted the decision was “feel-and-touch”, but pointed out the legal department used past and forward-looking metrics to inform discussions on decisions to outsource.

Turning to the primary question, we asked Russ what value meant to him personally, professionally, and within the scope of his work. Russ started off noting the question of value often caused attorneys to stumble, as lawyers often prefer to think in definitive terms while value often doesn’t involve neat, definitive concepts. One definition of value Russ had heard defined the concept as ‘level of quality in context of cost’ – Russ noted while cost can be measured, quality was far more difficult to ascertain. How legal professionals measured, managed, and thought of quality was key to understanding the concept of value, according to Russ, who stated his preference to have both qualitative and quantitative measures of legal services. Quantitatively, Russ noted he measures factors such as responsiveness, turn-around time, and volume, and qualitatively looked at complexity of the work, outcome, and client satisfaction

We were also interested in getting Russ’ view of how the value exchange was viewed and communicate across parties. First, we asked Russ about his view on how outside vendors perceived value. Russ believes the onus was on in-house counsel customers of legal service vendors to communicate the customers’ preferred or sought value to the vendor to ensure both vendor and customer were aligned on the concept of value. In terms of communicating value, Russ emphasized the importance of informing outside counsel about how the in-house counsel intends to evaluate outside counsel’s performance, and ideally these discussions should be conducted at the outset of the engagement to ensure alignment of objectives.

Russ noted those kinds of conversations often do not occur between outside counsel and corporate clients, although he believed the increasing complexity of the supply chain was opening the door to vendors focused on providing value and things were trending in the right direction. Russ hit on the trend of value-based fee arrangements, but noted “getting a fee structure in place…isn’t the hardest part” – instead, communication and managing the process was the critical aspect of the customer-vendor relationship.

We also asked Russ about communication of value internal to an organization. Russ noted how he tracks a variety of metrics, with results consistently communicated both to the company management as well as in the legal department so teams could evaluate their performance relative to themselves and to the entire department. Although Russ noted this level of communication fostered both competitiveness among the legal department as well as defensiveness on occasion, it also engendered constructive conversations to help team members better understand organizational goals and standards – as Russ puts it, “reporting creates transparency”.

Finally, we opened the floor to get Russ’ additional thoughts on value and the value exchange. Russ noted his work with the ACC’s Value Challenge, which was started after 2008 when in-house counsel were obligated by their CFOs and CEOs to do more legal work with fewer financial resources. The ACC Value Challenge runs an awards program (of which Russ is a recipient) celebrating those delivering value in the legal industry. Russ believes the Challenge facilitated and elevated the conversation around value in the legal industry, even 10 years in, by giving lawyers the business skills not taught in law school.

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About Russ Dempsey

Russ Dempsey is a leader in creating greater value in legal services. Russ has several years of experience driving results for clients by increasing efficiency within the legal and compliance departments; by designing and implementing process improvement/project management initiatives; and, by structuring value-based relationships with outside counsel. Russ is currently Assistant General Counsel for AIG, where he leads a legal team that supports its Retirement business.

Russ is a frequent speaker on legal project management and value-based billing practices.

He has been named a Value Champion by the Association of Corporate Counsel (ACC) for creativity in driving value, efficiency and greater predictability in his role as in-house general counsel. Russ has served on the faculty for ACC’s Legal Services Management Workshop since 2014, and is currently a member of ACC’s Board of Directors, where he Chair of the Board’s Advocacy Committee. Russ is also a member of ACC’s Value Challenge Steering Committee.

Russ holds both a JD and an LL.M. in taxation. He received his BA in Philosophy from Marshall University. Contact info: Russ.dempsey@aig.com