It’s not uncommon to hear general counsel complain about law firms not understanding the broader business context in which legal decisions are made, but Teri Plummer McClure,  Chief Legal Officer and Senior Vice President of Human Resources  at UPS, sounds particularly frustrated.

In a recent conversation with Big Law Business, McClure said she has actually stopped sitting through some law firm pitches altogether. "If they don’t know or haven’t taken the time to understand our business, then I really don’t have time to sit through that pitch,” McClure said.

In the final installment of a two-part series, McClure discusses why UPS has parted ways with certain firms, some do’s and don’ts of marketing, and her favorite charities.

Part II Excerpts:

We spend time educating our attorneys, and outside counsel, on the business objectives. We try to help them understand how their advice is being utilized.

We went through a process where we pushed our firms, and kind of set the tone for what we needed to be effective and reduce our costs. Some firms were willing to work with us, and some firms quite frankly were not.

I will tell a firm in heartbeat, “I don’t want you building your growth plan on increasing your billable hours to me.” That can’t be the objective. Our two objectives are at odds with each other.

It frustrates me to no end when a law firm comes and does a pitch for us, and the only thing they talk about is what the law firm does. I refuse to sit through most of them these days.

Below is an edited transcript of the final installment of our two-part series with McClure.

Big Law Business:  What are some examples of specific things that are amenable to volume discounts?

McClure: A lot of our package claim litigation, for instance, is very process oriented. It’s typically resolved in the same manner. We have very clear terms and conditions, so it’s just volume — people’s packages sometimes become damaged, and so we have to deal with that.

Then we have a body of trademark work that we do. We have a strong portfolio of work, and the nature of the work is pretty consistent year-over-year, so that we have some nice fee arrangements.

But with our two largest law firms, we have pretty extensive fee arrangements for the work they do for us, both on a business contract basis and business law basis, as well as from an employment and labor perspective.

Because of the history and the volume of work, and the understanding of how the business operates, I think firms have a better sense of what it takes to handle a case. So they’re much more comfortable giving us that flat fee arrangement, because they have a benchmark they can measure against.

Flat fee arrangements or alternative billing arrangements are less efficient when you’re going out and bidding on a matter by matter basis, because there’s just no history by which a firm can measure the amount of work that’s going to be needed for a particular matter.

Big Law Business: With a bigger proportion of your work being farmed out to firms, obviously you’ve got to work harder than others to keep those costs down. Besides alternative fee arrangements, what are you doing?

McClure: We spend a lot of time looking at project management processes, and how to utilize technology. A lot of it is education, too. We spend time educating our attorneys, and outside counsel, on the business objectives. We try to help them understand how their advice is being utilized.

So it’s a multi-pronged approach to attacking costs. Looking at the bills is sort of the first step. There are a number of things we do to try to manage and control those costs. We have a partnership with our law firms in doing that. We challenge them to be more creative in terms of how they approach our work.

Big Law Business: In other interviews, GC have been outspoken about law firms being behind the curve, in terms of their business models. Do you agree?

McClure: I think it depends on the firm. We went through a process where we pushed our firms, and kind of set the tone for what we needed to be effective and reduce our costs.

Some firms were willing to work with us, and some firms quite frankly were not, because what we were trying to accomplish was inconsistent with their business models. They were trying to increase their billable hours and grow their business that way. That was not consistent with the direction we were headed.

So some firms moved out of our core counsel network. Those that decided to work with us and look for creative options to help us accomplish our goals, while they were meeting their own needs, are the ones that have been with us and continue to be with us.

I think there are firms out there that are sensitive to these issues and willing to work with you. It has to be a partnership. It can’t be one-sided, in terms of dictating by in-house counsel. We’re trying to maximize efficiency and minimize cost, but help firms understand what our goals and objectives are.

I will tell a firm in heartbeat, “I don’t want you building your growth plan on increasing your billable hours to me.” That can’t be the objective. Our two objectives are at odds with each other.

We can be more efficient. I can help you better utilize the resources you have. I’ll even go out and tell people how great you are. But your growth model can’t be based on billing more hours to me, except to the extent that you find ways to be more efficient so we can pull work from other firms and give it to you.

It’s an ongoing, constant conversation, but I think there are firms that are getting the message and are learning that they need to change how they approach their growth strategies. We’re looking to work with those firms.

Big Law Business: If a firm wanted to start a relationship with you, what’s the best way?

McClure: The best way is for them is to see where our business is going, and identify opportunities where they can add value to what we’re doing. It frustrates me to no end when a law firm comes and does a pitch for us, and the only thing they talk about is what the law firm does. I refuse to sit through most of them these days.

If they don’t know or haven’t taken the time to understand our business, the direction our business is headed, new business opportunities we might be pursuing, and then show us how they can add value, then I really don’t have time to sit through that pitch.

Big Law Business: When we spoke with Lucy Fato, GC at McGraw Hill Financial , she said she thought firms were still behind on diversity. Is that something that’s important to you? Do you think inside counsel have a role to play in pushing firms forward?

McClure:  Absolutely. It’s always been a priority for me. I’ve served on a number of initiatives, like the Leadership Council on Legal Diversity , where we’ve been trying to work with in-house counsel and the senior partners of major firms to talk about better ways we can both address this issue.

It’s important for our company. We operate around the world, and in very diverse communities. We need our company, and our law firms, to reflect the diversity of these communities.

So we’re very adamant about that. It’s a commitment UPS has, and certainly it’s a commitment that I carry through the legal department. We do look at those issues, and we talk to our law firms about those issues. They know the importance.

As a matter of fact, at our last legal department meeting we just had a month or so ago, we had an afternoon session with the key relationship partners, talking about the importance of diversity to us, challenges they were having, and how we could all work together to make a more meaningful impact, not just in our businesses but in the profession itself.

Big Law Business: Who are some lawyers or business people who were mentors to you?

McClure: Early in my career, when I was in private practice, I worked for a gentleman by the name of Tom Kilpatrick . He’s currently at Alston & Bird. He was instrumental in allowing me to try my first lawsuit.

He was one of those lawyers who was a good teacher, a good role model, but he also turned loose the reins and threw me out there and let me do my thing. I’ve always been very close to Tom. He’s been a great mentor for me.

When I came in-house at UPS, they relied heavily on outside counsel, and one of the outside counsel who was the senior labor and employment counsel for the organization was a gentleman by the name of Bill Brown  out of Schnader Harrison Segal & Lewis in Philadelphia.

The entire 20 years I’ve been here, Bill has been an incredible mentor to me as a lawyer. He was also a member of the UPS board originally, before the company went public, so he has a good history with the organization.

And he was previously one of the first chairmen of the EEOC, so he has a great civil rights background that I always appreciated. He continues to be someone I call upon on a regular basis to talk with about issues and challenges.

Big Law Business: We’ve found some GCs have negative, and surprisingly strong, opinions about law firm invitations to lunch, dinner, or sporting events. Care to chime in?

McClure: You know, it works with some. It’s not something that I’ve done, largely because I’ve just been too busy, particularly when early in my career here I had two kids. My evenings and my weekends were for family. 

So I was not interested in wining and dining with any outside counsel. Quite frankly, my time was just too valuable. I think relationship building is important, but I’ve developed more relationships through initiatives like the Leadership Council on Legal Diversity, or some of the pipeline diversity work that I’ve done.

I do work with some charities in Africa and I’ve found I’ve developed relationships based on common interests more so than wining and dining at law firms or events or something like that.

Big Law Business: Of the organizations you’re involved with, which is closest to your heart?

McClure: Closest to my heart is an organization called Heart for Africa , which does mission work in Swaziland. UPS has been gracious and been a supporter of it as well.

And then I also sit on the board of The Task Force for Global Health . We take donations of vaccines from major pharmaceutical companies and help get those vaccines to needy communities around the world. So those two are sort of closest to my heart.

Big Law Business: When you’re not working, what do you do for fun?

McClure: Exercise. My husband and I have a plan to retire healthy. Exercise and a good book.

Big Law Business: What’s the best book you’ve read or movie you’ve seen recently?

McClure:  I go to the movies every week. I actually just saw a great movie last weekend— Woman in Gold . It was about a lawyer who took on a case to get a picture returned from the Austrian government to a Jewish family who had lost the picture during the Nazi Holocaust. It was a really well done movie. And a true story.