Considered for the last five years the most innovative initiative to transform the way legal services are delivered and valued, the Pfizer Legal Alliance (PLA) was designed as a long-term collaborative partnership between pharmaceutical Pfizer and 19 law firms. PLA was based on the idea that traditional competitive “beauty contests” between law firms and billable hours approach create a barrier to client–firm relationships and negatively affects the quality of legal outcomes.

Instead, PLA proposed that each firm worked for Pfizer on a flat-fee basis established at the beginning of each calendar year. Besides a cost-savings objective as the first and most obvious reason, this way there was no financial incentive for firms to compete for work within the PLA, making easier for Pfizer to encourage them to work together.

The firms participating in the program could provide legal services to Pfizer on the full range of matters facing the company. Firms were rewarded with opportunities to expand their scope of work on high-profile projects, develop trust and long-term relationships with Pfizer and each other, and deepen their knowledge of Pfizer and the pharmaceutical industry.

Essential communication methodology and tools

The implementation of PLA targeted originally a true collaboration effort based on elements hardly seen in traditional law practice: mutuality of goals, accountability, and firms partnering with each other.  To accomplish it, communication methodology and tools were considered essential. PLA engaged dedicated senior Pfizer lawyers from the Legal and Compliance Divisions as Pfizer Alliance Leaders, each of whom was assigned to a single firm to facilitate collaboration. Each firm appointed a Relationship Partner, who served as a liaison with these leaders and acted as the primary point of contact between the firm and Pfizer. Pfizer Alliance Leaders and Relationship Partners met monthly to discuss top matters, issues related to quality/quantity of work, secondments, educational opportunities, and more.

PLA program even included additions as the Associate Roundtable, a self-governed body that became a strong social network in which the associates can cross-refer matters; or the Junior Associate Program, developed to strengthen the professional development of high-potential law school graduates through hands-on exposure to Pfizer legal matters and a joint JD/MBA programs between Pfizer and a PLA firm for two years.

PLA also included operational tools as such as the “PLA Exchange”, a virtual communications hub that connects more than 700 Pfizer and firm lawyers. The site was updated daily and featured an expertise locator; conversation forums; daily news updates; articles on the PLA, Pfizer, and participating firms; and helpful resources that facilitate feedback and knowledge sharing. It was also developed a template for a monthly report that the firms could generate for their Pfizer Alliance Leaders.

Benefits for all

In summary, an innovative collaborative approach offered many benefits for both parties Pfizer and law firms:

To Pfizer:

•     Predictability of annual legal budget
•     Substantially reduced annual legal spending
•     Evaluation of firms based on how in-house team and other firms rate each other, get valuable input on how Pfizer lawyers are performing
•     Provided with the best combination of lawyers who share approaches and knowledge to come up with the best solution or result
•     Ability to regularly review and reprioritize work, approaches

To Alliance Law Firms:

•     Steady flow of work and more total work/revenue
•     Don’t have to pitch for every new matter
•     If efficient, matters are resolved quickly and are more profitable
•     Much deeper relationship with client and the opportunity for additional work
•     Better insight into company priorities, business and players
•     Law firms bond, share referrals for new business and learn from others’ best practices
•     Use as a model with other clients, use internally as a model for collaboration/team approach
•     Use as a driver of change in pricing and measurement of value away from hours, onto efficiency and results

Not a happy ending?

After five years of unchallenged praises, executives in charge of PLA were fired last march by a new top management team at Pfizer. Not officially stated, some critics point out as the main reason millions of dollars in fines and jury awards due to bad legal results. For those critics, these legal outcomes are the result of some firms working at the Alliance providing “secondee” lawyers to the company after having to admit too much low fees to participate in the program. New management at Pfizer praised the PLA but officially declared they were “assessing,” “streamlining” and “reviewing where the alliance is and how it should continue to evolve.”

It is not the first time we write about what we call the “upper hand syndrome” as an important killer of many originally good collaborative initiatives. Could it be also the case of Pfizer Legal Alliance? Another example of how this kind of collaborations do not need to be altruistic to succeed but they must be win-win to survive?

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