In-House Counsel
Most In-House Lawyers Surveyed Expect to Reduce Outside Law Firms
Posted Dec 1, 2008 12:13 PM CST
By Debra Cassens Weiss
Most on the in-house lawyers at large companies responding to an informal survey say they expect to cut back on the number of outside law firms they use over the next five years.
About 57 percent of in-house counsel at companies with revenues of at least $1 billion said they plan to reduce their number of outside law firms, the American Lawyer reports. The survey was posted on Legal OnRamp, a professional networking site. Eight-four responses came from lawyers at companies earning $1 billion or more, although some questions garnered fewer responses.
Forty-two percent projected that at least 10 percent of their total spending on outside counsel will shift toward some form of value billing, such as discounted or flat fees. Thirty percent expected a spending shift of 6 percent to 10 percent.
Another trend identified by the survey is telecommuting. Nearly 60 percent said they expect telecommuting in their department to increase over the next five years.
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Comments
B. McLeod
Dec 1, 2008 4:40 PM CST
This only makes sense. A company can easily pay annual salary for an additional, full-time staff attorney with the sum a large firm extracts for document work in a single transaction. Similarly, annual outlays for a significant litigation case might instead fund 3-4 staff attorney positions. As an added benefit, the in-house attorney has but one client, with the effect that the client does not encounter all the problems with strained rationalizations of conflicts that many large firms indulge in while elbowing their way into engagements they should never touch. Finally, cost control is enhanced because the company’s management can budget according to what the company needs (not what the outside firm needs to pay the idle, new lawyers it hired for $170,000 a year just out of school).
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David Tecson
Dec 2, 2008 3:26 PM CST
We have experienced an increase in litigation assignments, particularly in the areas of banking and healthcare. However, as a mid-sized firm with a competitive fee structure, we are not nearly as expensive as the mega-firms that have appeared in recent years as a result of mergers. I don’t think the big firms have taken a wise approach to hiring and developing young lawyers. Also, the hourly rates of some of the large firms in Chicago are no longer correlated to the value delivered. The recent ecomonic downturn may ultimately impact our businees negatively, but as of now, our cost-effective approach to the practice has worked to our advantage.
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