Robert Half Legal’s recent survey lends further support to clients seeking greater value for their dollar.
Corporate counsel seeking more value from outsourced law services
February 2, 2010
January 20, 2010
Why Some Firms Are Increasing Rates in a Buyer’s Market
Certain firms are increasing their rates for more experienced associates. In a climate in which alternative (fixed) fees are becoming more and more popular, I view this uptick in rates as a hedge against potential cost overruns in fixed fee arrangements.
While we’ve seen a shift in economic power from attorney to client, I’ve encountered more general counsel who are less concerned with merely negotiating lower rates than they are with a more holistic approach to cost control – an approach that not only reduces costs, but also manages expectations and improves performance.
Our clients want to reduce fees and expenses, but if the tradeoff is a decrease in quality or an increase in administrative oversight (of less experienced associates), any short-term economic benefit will be far outweighed by more fee volatility and a contentious relationship. Some, therefore, are willing to pay for more experienced attorneys as long as there are corresponding increases in predictability and efficiency.
January 4, 2010
Predictable New Year!
It’s January, the start of a new year, and a time to say good-bye to 2009. But if you’re like most law department managers looking at 2010, perhaps ”happy” is a stretch goal. “Sane” would be nice, and really goes without saying, so I apologize for even bringing it up. How about “predictable” - predictability in the nature, timing and level of legal fees and expenses? (Read More)
December 11, 2009
Advantage: Smaller Companies
A colleague recently asked me what middle market companies can do to streamline their internal legal function. By ”middle market”, I mean $1 - $5 billion companies, which typically spend about .5% of their sales on total legal costs. Generally, companies in this range have anywhere from 5 to 30 attorneys and assistants. Of course, these relationships will vary by industry and, for that matter, for each specific company. For those of you in this position, you’re in the driver’s seat. (Read More)
December 9, 2009
In This Buyer’s Market, Focusing only on Cost Reduction is Short-Sighted
I participated in a panel discussion during Corporate Counsel’s Controlling Legal Costs conference last week. A colleague made the point that slashing costs with no holistic or cohesive plan may well do more harm than good. Carol Ann Petren is Executive Vice President and General Counsel for CIGNA, and she went on to point out that aggressive staffing cuts can increase outside counsel fees and expenses or result in higher liability exposure. I could not agree more. Focusing on cost minimization rather than performance optimization is a recipe for disaster. (Read More)
September 3, 2009
Why the Billable Hour Won’t Go Away
The August 24th Wall Street Journal article, ‘Billable Hour’ Under Attack, discusses how some large corporations, including Pfizer, Cisco Systems, and American Express, have forced their outside counsel to eschew the billable hour in favor of fixed fees. While these companies are expected to save between 15%-20% on fees and expenses, trust me when I say that the billable hour isn’t going anywhere anytime soon. (Read More)
August 19, 2009
Junior Fees for Junior Lawyers
A recent Business Week article indicates that some law firms are bringing the roles of junior associates back down to earth. Associates with 0-3 years of experience are one of the biggest pain points for in-house counsel, as the cost of their inefficiency has risen with their ever-increasing rates. Now, however, certain firms are capping rates and the number of hours new associates can bill for the first two years. If this turns into a trend, it will be interesting to see if lower rates for better-groomed junior associates will slow GC’s propensity for bringing more routine tasks in-house.
July 24, 2009
Will recent drop in legal expense continue?
According to CFO Magazine, companies spent 7% less on outside counsel in the first quarter of this year. Although this has largely been the result of a shift to less expensive firms, there are indications that this decrease won’t last long. Experts expect a rise in the following areas: regulatory matters, bankruptcies, securities and employment issues. Moreover, what has not been considered yet is the near-certain avalanche of litigation stemming from the sub-prime crisis. Will this signal a shift back to larger firms?
July 15, 2009
The Third Option, Part II
Yesterday I presented the challenge of enforcing all billing guidelines, not just those that the GC feels are being violated. Success here depends on how willing you are to challenge your current bill review procedures. The first step is to define the problem. True, billing guidelines are not being enforced. But why? (Read More)
July 14, 2009
The Third Option, Part I
I’ve worked with corporate law departments that struggled with the decision of whether to drop their high-priced firms in favor of those with lower rates. While this may make sense in the short term, the risk is that if a case goes south, the blame comes straight back to the in-house counsel who brought in the new firm, even if such blame is unwarranted. If you’re in this position, it appears that you only have two choices: stay with the high-priced firms and sacrifice control of your budget; or switch firms and assume this risk (real or perceived).
Enter the third option: (Read More)