Business of Law
Legal Fees Still Too Fat, Corp Counsel Say; 1 Firm Works 3 Months for Free
Posted Sep 20, 2010 11:08 AM CDT
By Martha Neil
For years, law firms doing work for major corporations charged hefty fees with relatively little objection from their clients.
But now, despite a major pendulum swing that has seemingly shifted the balance of power in fee negotiations to corporate counsel in recent years, in-house lawyers are demanding more price concessions, reports American Lawyer.
At a roundtable breakfast meeting at London's College of Law yesterday, legal heads of well-known companies including British Airways PLC, Nokia Corp. and Royal Dutch Shell PLC said legal fees are still too fat and must come down further, the magazine recounts.
In a successful effort to cut costs, Shell reduced the roster of outside law firms who do business for the oil company from 60 to eight and Nokia slashed its list of 500 law firms in 130 countries by roughly half. The telecommunications giant has also implemented new software to manage law firm invoices.
As law firms battle against one another for business in a time of declining corporate legal work due to the global economic downturn, aggressive fee-cutting is a common practice. One firm even offered to work for Shell for free for three months, in order to demonstrate its legal prowess to the prospective client, said Beat Hess, the company's legal director and group executive committee member, and "of course we agreed."
For more about what legal directors had to say, read the full article.
ABAJournal.com: "As BigLaw Struggles to Provide Value, Lobbying Firms Are In the Money"
Updated at 11:45 a.m. to link to subsequent ABAJournal.com post.