- Transparency in corporate legal bills is more important than the lowest price, CLO survey finds
Transparency in corporate legal bills is more important than the lowest price, CLO survey finds
Posted Oct 23, 2013 12:38 PM CST
By Debra Cassens Weiss
A survey of more than 200 chief legal officers for corporations found that “transparent pricing” in legal fees is more important than lowest-price or guaranteed legal bills.
Asked to choose which pricing option they preferred among four choices, 36.4 percent of the chief legal officers said they wanted “transparent pricing” in which they understand how and why the price is set and have the opportunity to discuss changes, according to a press release by legal consulting company Altman Weil, which conducted the survey (PDF). One-third said they preferred “guaranteed pricing,” while 20.3 percent chose “value-based pricing” that varies based on results.
Only 9.6 percent said they preferred getting the “lowest price” available.
Altman Weil principal and survey author Daniel DiLucchio called those results “very striking” in the press release. “If a rate discount is the only thing offered, law departments will certainly take it, but chief legal officers are saying what they really want is predictability and control,” he said. “So far this is a challenge that most law firms have been slow to address.”
Other survey results:
• 78.5 percent of CLOs negotiate price reductions from outside counsel to control costs. Nearly half said they get an average price cut between 6 percent and 10 percent.
• 42 percent of corporate law departments plan to add in-house lawyers in the next 12 months, while only 5.4 percent are planning a decrease.