Episode 18 – Gregory Ramos: Creating the Sherman & Howard Fellowship Program
Member, Sherman & Howard
Gregory Ramos is a Member in Sherman & Howard’s Corporate and Business Department. One of the firm’s clients loved their legal work but wanted them to develop greater industry expertise in their oil & gas business. The solution? Jointly identify a new law school graduate to be hired by the client, receive legal training from the firm, and then after two years, join the firm as an associate. The experiment was a success and the Sherman & Howard Fellowship Program was born.
Full Interview Transcript
Michael: My guest today is Gregory Ramos, a member in the corporate and business department at Sherman & Howard, a 175-attorney firm headquartered in Denver with 11 offices. Thank you for joining me, Greg.
Gregory: Thank you.
Michael: I originally reached out to you after hearing about the Sherman & Howard Fellowship Program that you launched, and I’m really interested in getting into that. But I thought maybe to set some context, can you tell me a little bit about the firm?
Gregory: Sure. Sherman & Howard is the oldest firm in Denver. We’re a full-service firm headquartered here, as you said, with 11 offices. The vast majority of our attorneys are in Colorado and Arizona, so we consider ourselves a super regional firm in the InterMountain West.
Michael: Okay. And what’s the focus of your practice?
Gregory: My practice is transactional, mostly mergers and acquisitions. I also do quite a bit of technology-related work and corporate governance.
Michael: Okay. Maybe…can you give me a bit of an overview of what is the fellowship program? Then we can sort of backtrack and talk about how did that come about.
Gregory: Sure. The Sherman & Howard Fellowship Program is a program under which the firm will go out and work with a client, and we will help the client to source individuals who we call “fellows.” They are straight out of law school, so law school graduates who hopefully have taken and passed the bar, and we’ll source these individuals to be hired by the client. We work with the client to develop them both professionally, as well as within the client’s context of how they want to develop them, either management or in-house counsel. They work with the client for two years, and then transition into an associate role at Sherman & Howard.
Michael: Okay. How did this first come about? What was the situation? Where did you get the idea and how did you implement it?
Gregory: We were really trying to solve a couple of things. The way that we had traditionally hired law students and hired young associates followed the, I think, the long-term, traditional model of a summer associate program. You bring them in for the summer, you make offers at the end of the summer, they come the next year, and they go through a rigorous training program in-house.
I think with the change in the economy in 2007 and 2008, we, like most of our peer firms, stopped hiring that way. We canceled our summer associate program, we ratcheted back on hiring substantially, and found that after two or three years, we no longer had a good, strong pipeline to hire young talent. And so, that was problem number one, is how do we get that pipeline started?
In the meantime, what we’ve seen from the client side is they were no longer willing to support that model. They were no longer willing to support a model of bringing in brand new, green associates who didn’t know their business and didn’t know how to practice law, and paying for us to train them. So, that’s the problem one we’re trying to solve.
Problem two we’re trying to solve is the traditional problem that Sherman & Howard and I think almost every other firm in the country has, and that is developing broad relationships with your clients, diversifying your contacts with your clients in a way that makes them a better, longer-term client, and less reliant on a single point of contact with the firm.
So the thought that we had…and we had, I think, a relatively unique situation to give this a shot. A good client with the firm who trusted us, who we had built over time to being a fairly decent-sized client of the firm. We were providing a lot of full-service services to the client, so M&A, litigation, employment.
But the client’s industry was an industry that we didn’t understand. They’re in oil and gas. We are not an oil and gas firm. We traditionally have fallen into different industries, including municipal bonds, telecom, but not oil and gas. So we didn’t understand their business as well as we needed to. We had developed a close enough relationship. I have developed a very close relationship with the CEO so we could have frank conversations about what he needed from us and what skills we had. And it was clear, and in a non-offensive way, it was clear that they wanted us to develop our expertise in oil and gas, as well as our understanding of the industry.
So we were presented with this opportunity. How do we work with that, know what gaps we have to fill, know what strengths we have, which is this broad practice based with they’ve already had touches with? Looping in this other concern and issue that we’ve had about hiring, the CEO sat down with me and we talked…I proposed this program, and we talked about how we would make it work. The idea is let’s bring in a young guy who is interested in the oil and gas industry, who they can train both industry-wide, as well as specific, legal, subject matter expertise, and we can provide professional training. We can provide general legal training, too.
So they brought this individual in. We interviewed students from several law schools, focusing on the local Colorado law schools, as well as law schools that have substantive oil and gas programs. So University of Oklahoma, University of Houston, for example. We did the legwork of sourcing the candidates, of doing first rounds of interviews, and we came up with a pool of finalists, and brought those to the client. They interviewed, we mutually sat down and talked about what would work and who would work, and they made an offer, and a young gentleman from the University of Houston who had a family background in oil and gas, and a deep interest in oil and gas, and he worked his summers for oil companies in Central and South America, a perfect fit to bring in.
So we brought him in and he started there as…essentially in the management training program there to learn the business and learn the industry, and learn not just what he has been doing as a summer associate or what he learned at law school, but really, what it takes to run an oilfield in North Dakota, and what it takes to…what the legal and corporate structure of a company that undertakes that business, how that works and how it’s set up.
That was kind of the pilot and that’s how it started. At the end, what we’re looking at is this gentleman is coming over here as a full-time associate this summer, in fact, and he will have personal relations with the client, he’ll understand the client’s business, and he’ll understand not only their current legal problems, but also what their strategic vision and goals are. It helps us address our client’s desire of getting us more and more involved in their industry and their business.
Michael: Yeah. Really interesting is the…I was kind of wondering as you were telling that, how did you already get to the place where you in such a deep relationship given that you didn’t have that industry background? Did they bring you in for some initial engagement, then you kind of grew it from there?
Gregory: Yeah, it’s funny. The initial engagement they brought us in for was in OSHA matter. So there had been a well blowout that resulted in serious consequences. They needed an OSHA expert, which we had in our firm. They were referred to us by their oil and gas regulatory lawyers. And so, that led to a conversation about compensation, benefits, as well as the potential M&A transaction. None of those skills could be provided by their oil and gas lawyers. So I was introduced to the CEO to talk about whether or not we could provide these other services, and was just able to develop a strong relationship with him.
My motto has always been and continues to be in legal marketing “Just show up.” And I would spend a lot of time with the CEO in his office, talking about whatever he wanted to talk about, getting to know him, getting to know his business, what his concerns are, strategizing with him about things to the point where I became a trusted enough adviser and had a strong enough communication with him that it just naturally evolved. That this was a good candidate to try this program with. Especially given the facts on the ground of here we were with some strengths that we could leverage and some gaps that we all could acknowledge we had and could mutually come up with a way to address those gaps.
Michael: Right. Was this a handshake thing or was there maybe a couple of e-mails outlining the particulars? Because you can envision a situation where maybe they love that employee and they don’t want to let him go.
Gregory: Right. It’s all about communication. With this client, it was a handshake. We’re formalizing it. I think we might have wrote a memo at the end, that when we did it with this first initial pilot program, we were now formalizing it so we have letters that go to clients in a certain way. But we try to keep it informal, frankly. We want it to be something that’s relatively organic because we understand that every client is different. Their needs are different, how they approach hiring is different, how they view the role of the fellow is going to be different.
And so, we basically kept it on the handshake level, and everything that’s been in writing has been relatively general. Part of the handshake is after two years, if he’s still employed by the client, he is available for an offer from Sherman & Howard. But we all know going in, and by “we all,” I mean the firm, the client, and the fellow, we all know going in that we’re all free agents. And at the end of two years, one of the three of us may say, “This isn’t for me.” And we also recognize that one of those net results could be the client says, “I want to keep the guy.”
And our view there is, “Okay.” Because it’s still a win-win. We had brought somebody to the table for the client that they loved. We developed a relationship with that young attorney because we were doing all the professional training and everything else that goes along with it, as well as there’s a socialization procedure as well, so that young attorney, while they’re over there, attends all the Sherman & Howard social events as well. So there’s a socialization, as well as professional training and subject matter training that we’re providing them.
And so, what we feel like is that’s still a win. The client keeps them, that’s great because now we have an in-house attorney there who we have a really good relationship with, and the client’s happy because we got them a long-term position.
Michael: Yeah, that makes sense. How much resources go into providing that professional development and training while the fellow is in that first two-year period?
Gregory: It’s not that much. I guess on a marginal cost basis, it’s not that much because we have our own associate training programs. And so, it’s really just adding one more body to those associate training programs. I think the marginal effort goes to working with the fellow on a non-billable basis, so the partners here will work with the fellow on a non-billable basis on certain matters as they come up.
As we look back, it was really something on the order of a handful of hours a month, three or four hours a month that’s non-billable, sitting down with them, teaching them how to write a letter, talking to them about ethics, whatever. It really wasn’t that much, I mean, on average.
Michael: It sort of strikes me that it’s within the same commitment that you would be making to an in-house new associate, or that you might be making to communicating with the client in more of a development focus.
Gregory: Absolutely true. That’s the way we look at it. It’s really the same effort that we would spend with our own associates.
Michael: You mentioned that you’re starting to communicate with other clients around this concept. Have you actually gone forward with other fellows in other organizations?
Gregory: We’ve had several conversations with clients who were very interested in it. The initial one was a pilot program is that it’s running through the end of this summer. We got approval last summer to make it a permanent program at Sherman & Howard.
And so, we really spent last fall evangelizing it with the clients and internally. It’s something that, for many clients, there’s a budget impasse that they need to be planning for well in advance. It just so happened client that we did the oil and gas, the oil and gas client that we did the pilot program with, the CEO controls the budgets. He took a personal interest in it. And so, there was no having to run it through channels.
And what we found is when you’re working with the general counsel to develop the program, the general counsel has a much more formulaic approach and there’s more of a procedural effort to bringing in employees, bringing in new people. Because again, these are employees of the client, not us. And so, it’s kind of a longer discussion point when you’re talking with the general counsel, we’ve found.
Michael: Yeah, that makes sense. I think I recall you were saying previously that you…so as you bring in the fellow into the firm, that creates an opportunity to replace that person with a new hire at the client’s organization. Right?
Gregory: That’s correct. Yes.
Michael: Is that where that is headed with that first client?
Gregory: Also another part of the long-term view, too, is…and the way that we pitched it to the client in this pilot example is at the end of the fellowship, we’ll find you another fellow. And so, the client has kind of a pool of incoming people that they can train in their business and industry, and those people all end up going to their law firm. And again, maybe one or two don’t. Maybe they keep one or two, or one or two don’t work out. But in the long-term view, it becomes kind of a pipeline, and it replaces a part of our former summer associate pipeline.
But it’s also a pipeline for the client where they can get in new, young people, and help to train and evaluate them, knowing that they are helping to put people in their law firm whom they trust and who know their business. And so, in this case, we have, in fact, replaced the fellow for the oil and gas client with another person who grew up in an oil and gas family and is very interested in the business, which is another aspect of it that we found that you don’t see in the traditional hiring program, is you can be very, very directed in who you hire for that client. Because you’re working with the client, and you’re both interviewing the people, it’s a specific industry, and the fellow knows they’re going to be working in a specific industry. And so, you can be very directed and find really, really good fit.
Michael: That’s fantastic. Well, I also wanted to ask you…I saw that you personally received a BTI Client Service All-Star Award, so congratulations on that.
Gregory: Thank you.
Michael: Basically, as I understand it, BTI interviews corporate general counsels directly. And in the course of those interviews, when they call out attorneys that have provided excellent service, that’s how the reward takes place. Is that correct? Did I get that right?
Gregory: Yes, that’s right. This is not something that the firm’s marketing department ever gets involved in. It results from direct conversations between BTI and general counsel of large employers.
Michael: Can you share the story how that came about? Did you learn…I presume after the fact, but the context where that occurred?
Gregory: Sure. BTI doesn’t disclose who the client is, but they disclose enough information, certainly in my case, enough information that I knew who it was and had a follow-up conversation with the general counsel. This was a client that I have represented for over 10 years.
I am in Denver, and the client is headquartered in St. Louis. And so, we had this challenge, it’s also a large telecom company, and we had a challenge of really being competing against a lot of really good St. Louis law firms who were right in their backyard.
I basically undertook what I viewed then and understand now to be a really long-term client development program. Again, working directly with senior management, worked directly with the general counsel, they’re now in their fifth GC since they hired us, and I’ve worked directly with all five of them to help develop this relationship, and done many things just to be there for them, again, to just show up.
In the last 10 years, I’ve been to St. Louis at least 80 times personally. We’ve talked through…we had a similar kind of a conversation with a client where, “Here’s our strength. This is why you hired us. And here’s some gaps that Sherman & Howard has.” And one of the gaps that the client identified back in about 2008 was that we didn’t have an office in St. Louis, and they wanted us to have somebody there. So we talked about that.
And where we ended up was at the client’s urging and obviously with their consent, we hired one of their in-house lawyers to start Sherman & Howard St. Louis office. And so, even though on a cash out the door basis, they were paying more to use her as an outside counsel, and continue to pay more to use her as an outside counsel than they did when she was inside. Sherman & Howard now has a presence in St. Louis that can support that client and supports that client on a regular basis, and not just me flying out there once every six weeks, but really having somebody on the ground who can drive down the street and go sit with the people, with the client, and help them there.
Michael: I was going to ask. Obviously, they felt that was to their benefit to do that. But what is the benefit of having that individual occupying a different role relative to the organization and still serving that organization? How does that benefit them?
Gregory: Well, it benefits them in several ways. When I say “cash out the door,” they’re paying more. It actually changes internally, and this is something that I’ve recognized with this client and others. Internally, it changes how the money works. Because it takes the headcount off of the law department’s budget, and now, they might be spending more for outside counsel, but that can be allocated across all the budgets that her work is…for the groups that she’s working for.
And so, in one way, it kind of helps them manage their internal resources better. It’s also…it’s a demand service. And so, they’re not paying her salary and benefits at the same level all times. They know when they’re hiring outside counsel and they can budget for that, and it’s on-demand. So if they don’t need her, they’re not paying her.
And so, it does have some financial benefit to them. But I think we, the GC and I, both saw was an opportunity to help strengthen the relationship between the firm and the client by having somebody there, by having a presence in town, and being able to be responsive on the 10 minutes’ notice, being responsive with someone who can come in the door and work with them.
It also really helps to have…it’s kind of the same…if you think about it, it’s the same kind of relationship issue that we’re trying to develop with the fellowship program, which is now, we have…and the GC and I saw this at the time, now Sherman & Howard has a person who knows everybody in the company. They have contacts with people in the company. They understand the company, the company’s structure. They understand the business and the industry. Now, this happens to be a business and industry that we already had a substantial amount of expertise in, but it’s bringing somebody to one of their law firms who already knows them. And that’s a key element. I think that’s a key factor to sell to your clients.
Michael: Yeah, that makes sense. The other thing that I was thinking about as you were describing that is something I’ve experienced, too, which is that there are certain sort of realities because of corporate structure, especially in larger companies, that very significantly affect choices that people would make. If you don’t understand that as their law firm, what their constraints are, how they’re incentivized, all those types of things, you might be pushing strongly for a course of action that they don’t want to proceed with. I just sort of wonder, does that make sense? Is that something that you see that the more that you understand their internal reality, the more you can make recommendations that are consistent with the realities that they’re working with it?
Gregory: That’s absolutely true. You talk to 100 GCs in the country, and 99 of them will tell you that one of the top three things that they want from their law firms is to understand their business. It’s so key to know what their drivers are and what their limitations are from a business perspective, and not just to understand the specific legal issue at hand.
Michael: Can you think of an example? I realize a lot of these involve client situations, but an example, maybe, of a time where that sort of understanding enabled you to be more useful than you would if you were just coming in cold?
Gregory: Well, I think a good example is a recent client that we got through an RFP about a year and a half ago, and they were a spin-off of a joint venture between two large multinational corporations. Essentially, what was happening is the spin-off now was a brand-new business. And even though it was essentially starting with $2 billion in revenue a year, it had no back office, it had no headquarters, it had nothing because it was two separate businesses that had been being managed by some very large organizations.
And so, they came to us as part of an RFP saying, “We need some help in putting together a combined business from an IT perspective, from an information technology perspective.” Which is, as I said, is another one of my areas of focus is on the technology side.
And so, we looked at that and said, “Okay. We understand what you’re doing. We understand your concerns about how you are going to integrate this business. We’ve experienced large integrations in these ways, and have seen these things, and we’ve worked through these types of issues. And we can help you work through your issues there,” and we ended up being selected. And what the client told us…and to be honest, our response to our RFP was a three and a half page letter, and that’s what it focused on.
“We feel your pain, we know your pain, we’ve experienced your pain. And these are the concrete ways in which we can address that through that experience.” And the client said, “You guys were the only ones who did that. So we get all of this stuff about your canned marketing materials. But you guys were the only ones who really understood what the issues are that we’re facing. And our CIO tells me about those issues every single day. And here, you’ve already outlined how you’re going to address those, and that’s why we selected Sherman & Howard.” I hope that answers your question, but that’s the kind of approach that I think we’ve tried to take.
Michael: Yeah, that makes sense. So picking up on the things that they’re saying and recognizing the importance of that, and not just going in with the cookie-cutter standard pitch each time.
Michael: It also seems that both these experiences that you’ve talked about, both the telecommunications company and the oil and gas company, it seems that it started from maybe an initial engagement that grew over time because of your willingness to spend time with them and understand the bigger picture.
Gregory: That’s right.
Michael: And so, I was curious about how does that manifest? Certainly when you’re engaging in conversations, you hear about other things that need legal attention, so that gives you the opportunity to mention other practice groups. But it seems like you’re operating at a more integrated way than that, like, “Oh, I know someone. Let me have this partner come and talk to you.”
Gregory: Right, yeah. What I’ve tried to do is really develop client teams. In both of these clients, I’ve developed a client team. By a client team, what I mean is the same group of people, both kind of the general practitioners, the M&A lawyers, the people that are doing the work for the client, as well as the subject matter experts, the employment lawyers, the ERISA lawyers. The same individuals are on tap for everything that happens with that client.
So every single call I get that deals with insurance, for example, I will call the person on that client team who deals with insurance. And so, they’re in contact with the same person. So they’re developing a relationship with that same person. So now, what we have over a long period of time…and I’ll give you the telecom client is a good example because they’ve been a client for over 10 years, and the core people on that client team have all been on that client team for over 10 years.
And so, for over 10 years, every single time an employment law question comes up, they’re talking to the same person at Sherman & Howard. And so, there’s an individual relationship there now. Our insurance expert, there’s an individual relationship there. And so, we have a handful of lawyers who have…not just me, who have long-term relationships with individuals over at that client. Another thing we do for that client, because they’re headquartered in St. Louis, is I take that client team, 8 or 10 people every year, and we go out there. And so, it’s not just me who goes out there 8 or 10 times a year, but at least once a year, the entire group goes out.
And we put on a CLE for their in-house legal department and we have some social events. It’s just a way to help develop those long-term relationships with a broader group here, and get a broader level of context within the firm. And so, what we’ve seen in that context, it’s not just them coming to me and saying, “Hey, I need an employment lawyer.” It’s them saying, “Oh, yeah. I know that employment lawyer. I’ve been working with her for 10 years. And so, I’m going to give her a call directly and get this additional project going.”
Michael: Right. And also, the fact that you’ve been able to make it through five transitions of GC at that company, that suggests that you’re really operating with the whole organization, not just that one lead contact.
Gregory: That’s right. And it goes both ways. You want both the firm to have multiple contacts, but you want those multiple contacts to be with multiple people, decision makers within the company. And I’ve had GCs tell me, “I only really control about 10% of my budget, and the other 90% is spent by lawyers who report to me.” And so, when you’re working with those lawyers and the GC, and you have multiple contacts, you’re really accessing more of the client’s legal needs than you are if you just have a single point of contact with one relationship partner at the firm and one person at the client.
Michael: Do you have any perspective…? Maybe even outside of these two clients we’ve been talking about, there’s a persistent trend with large corporations to drive down costs, control the legal budget. One of the ways they do that is by instituting programs that try to take…neutralize the impact of those relationships. So there are software platforms and bill review things, and all the sort of stuff going on. How do you strike a balance where you recognize the importance of those initiatives, and yet recognize…you’re also going to provide better service if you’re in relationship and have strong relationships?
Gregory: Yes, it’s still the relationship business, and yes, you need to be flexible, and clients are very cost-conscious, and are undertaking programs to help control their legal costs. I think part of it is having good communication with your client and helping them in those processes, and not opposing those processes.
But I also view it, it’s kind of like outsourcing. For everything that is kind of taken away, that’s taken off their plate, there are other opportunities that are exposed. And so, that’s why being flexible is so important. And realizing that the things that they’re taking off their plate, that they’re trying to automate or bring in-house, those aren’t the things where law firms are going to make their bread and butter. If they are, then I would suggest that your law firm is not organized the right way. Because those things that they’re taking off their plate are the day to day things, the mundane things, the simple things.
I think to really distinguish yourself as a lawyer, as outside counsel, as to really bring value to the firm, that you have to bring subject matter expertise, you have to bring judgment and value. And those things can’t be replaced with a computer program or by outsourcing something to India.
Michael: Can you think of an example of a way that you have seen new opportunities emerge and pursued them, or gained new business because of that?
Gregory: Well, I’ll give you one example of something where a client came to us and they said, “We need to fixed legal spend.” What they proposed and wanted to work through with us was a way for us to estimate how much work we were going to do for them for the next three years, and they would just divide it by 36 and pay us that every month.
And you smile and chuckle because you know that’s an impossible task, right? But we did it. What it really did for us was it gave us the opportunity to do a few things, one of which is to have some very detailed and invaluable conversations with your client about what their expectations are, about what kind of work you’re going to be doing, and it also gave us the opportunity to really put some management to our practice.
And I think going through that and by putting management to our practice, what I mean is not looking at your practice as a billable hour. Clients don’t like to look at your practice as a billable hour. I suggest that when we stop looking at our practice as a billable hour, we become better lawyers and we better serve our clients’ needs. And so, that’s what it did. And through that opportunity of talking through that with the client, and working with the client, and understanding how to better manage our practice, we actually got a pretty substantial piece of work from that client that we never got before, and that we’re still doing.
And this was 2007 when we did this program, which, by the way, after a little over two years into it, the client said, “Yeah, we really don’t think this is working, and maybe it works for Sherman & Howard, but all of our other law firms complain about it every month.” So they canned it after two years, that was in 2009. And seven years later, we still have the business that we got out of that because we had these conversations with that client, and because we worked through how we would manage that type of an engagement. They turned a bunch of work over to us that they had at a different law firm, and we’ve held onto that work to this day.
Michael: And so, did they also want to convert your firm back to hourly, or are you still operating under that other…?
Gregory: No, all their firms. They said, “No, we’re done.” They did it for two years. We went back to hourly and we undertook a different billing arrangement with them.
Michael: One of the things that I’ve noticed with my own experience with alternate fee arrangements is that it does allow you to allocate firm resources differently, and also…there’s a certain amount of overhead that goes into this whole process of entering hours and reviewing them, and all that sort of stuff. So you can gain efficiency if you’re just dealing with a monthly payment.
Gregory: You can, but your firm accounting has to allow for that. I think there’s more of a challenge on the law firm side, and properly incenting [SP] and compensating people when you can have alternate fee arrangements. But you’re right. You can eliminate some of the overhead, but then you have to deal with this other challenge.
Michael: Hey, Greg, I really enjoyed the conversation. I really want to thank you for sharing so openly. For folks who want to get in touch with you, any suggestions or the best way to reach out to you?
Gregory: Sure, thanks, and you’re very welcome, Michael. I think the best way to reach out to me is by e-mail or through the firm’s website at Sherman & Howard, and the e-mail is email@example.com.
Michael: Great. Well, thanks so much.
Gregory: Okay. Thank you, Michael.
- Sherman & Howard L.L.C.: http://shermanhoward.com/
- Greg’s email: firstname.lastname@example.org
- BTI Client Service All-Stars Award
- Description of the Sherman & Howard Fellowship Program [1:20]
- How the Sherman & Howard Fellowship Program came about [2:20]
- How Greg formed a deep relationship with a client where his firm didn’t initially have industry-appropriate expertise [9:00]
- Making the Fellowship Program a win-win for everybody involved [12:00]
- Rolling out the Fellowship Program to other clients [15:10]
- Running the Fellowship Program on an ongoing basis with a client [17:00]
- Winning the BTI Client Service All-Stars Award [19:00]
- The value of developing relationships with the client at every level across your team [24:45]
- One of the top things that GCs want from their law firms is for the firm to understand their business goals [26:35]
- Expanding initial engagements into deep company-wide relationships [30:18]
- Respecting and working with clients’ cost-cutting initiatives while still maintaining connected relationships [34:35]
- Complying with requests to do work under alternative fee arrangements [37:16]