In-House Counsel Challenging Firms on Value, Service

Article in Corporate Counsel by Catherine Dunn
http://www.law.com/corporatecounsel/PubArticleCC.jsp?id=1202577469900&thepage=1









The 2012 Chief Legal Officer Survey from Altman Weil polled more than 200 general counsel on how they approach cost control and efficiency, along with how they view their relationship with outside counsel. Asked how serious they think law firms are about changing their model for service and fees to provide greater value to clients, the respondents weren't impressed.

"CLOs continue to express deep skepticism about law firms' willingness to change their service delivery model, rating firms' seriousness about change at a median 3 on a 0 to 10 scale for the fourth year running," according to the report.

IN addition CLOsalso  identified a number of service improvements and innovations they'd like to see from outside counsel. Their top picks included: greater cost reduction (according to 58.9 percent of respondents); non-hourly based pricing structures (53 percent); more efficient project management (53 percent); and improved budget forecasting (following closely with 52.4 percent).

Top legal officers also said they have become more proactive on cost control matters during the past year. The vast majority of respondents—71.1 percent—said they negotiated with outside counsel for price reductions, and nearly 63 percent said they have improved the efficiency of internal procedures.

And it's not just about making adjustments to the existing in-house/outside counsel relationship—according to the survey, many in-house counsel have been moving work away from firms: "In addition, 47 percent of law departments shifted work from law firms to in-house lawyer staff; 41 percent shifted law firm work to lower priced firms; and, 36 percent reduced the total amount of work sent to outside counsel. Ten percent of CLOs reported instituting a law firm convergence program."Within legal departments, CLOs addressed internal costs not only by improving procedures, but also by shifting work to paralegal and other paraprofessionals (36 percent); using contract attorneys (35 percent); and outsourcing work to non-law-firm vendors (25 percent).  "This is the first time in three years that the survey has found more departments decreasing than increasing their law firm spend," the report's authors note.