Now in Legal Rebels:
Posted Oct 31, 2011 10:08 pm CDT
Fed-up with “sky-high” fees at outside firms, Jones Lang LaSalle general counsel Mark J. Ohringer says he now spends 75 percent of his budget on non-law firm resources.
“I’m law firms’ biggest competitor,” Ohringer said during a program at the 2011 Futures Conference on Friday, “and I don’t think they see it that way.”
Jones Lang, a global real estate and investment management firm, has boosted its in-house capabilities by 60 lawyers in the past few years, and Ohringer says he won’t hesitate to add more as the company’s needs increase. Speaking at the conference held at Chicago-Kent Law School on the future of the legal profession, he noted the average cost to employ an experienced in-house lawyer—easy to come by these days given the tough legal job market—is $125 an hour, a bargain compared to many firm rates.
In fact, if were up to Ohringer, his company would keep all its legal budget out of the coffers of outside firms.
“If I could have 100 percent of the work not done by law firms, I would,” says Ohringer, who currently keeps 75 percent of his corporation’s legal work in-house or sends it to non-firm vendors. He is executive vice president, global general counsel and corporate secretary at Jones Lang.
Ohringer isn’t alone among corporate legal leaders who are bypassing traditional firms and utilizing their own departments, foreign law firms and other legal vendors to bring down budgets. Ohringer did praise small U.S. law firms for their inherent cost containment and encouraged them to go after work typically reserved for their BigLaw counterparts.
“The most progressive force today is the GCs of companies,” added Legal OnRamp’s Paul Lippe, a fellow panelist at Friday’s program. Ohringer says his effort is fueled by a failure to find a satisfactory billing arrangement, whether hourly or alternative fee-based, between his company and many outside firms.
In fact, Pfizer Legal Alliance chief counsel Ellen Rosenthal forbids any of her in-house lawyers from discussing billable hours with outside counsel. The pharmaceutical giant conducts 70 percent of its legal work through nonhourly arrangements, said Rosenthal, also a Futures Conference panelist.
A survey report from earlier this month found that companies spent 6 percent more on their own in-house legal departments in 2010, up from a 1 percent increase in 2009, and decreased the amount spent on outside lawyers by 3 percent in the same year, according to Chicago-based HBR Consulting.