September 11, 2014
Generally speaking, corporate clients seem to be saying they are happy with their outside counsel’s performance and abilities, but are not planning to send out more work. In fact, many plan to send out less.
In Consero Group’s General Counsel Data Survey, 60 percent of the 57 Fortune 1000 general counsel surveyed said they felt that their outside counsel “provided sufficient value” relative to spend. Even so, only 16 percent of general counsel said they planned to send more of their work to outside counsel.
The reason behind this may not be too surprising – cost.
Even if a general counsel thinks an outside law firm is providing service proportional to its expense, that does not mean he or she is not being expected to rein in legal spending. In response to cost pressures, many general counsels are keeping more work in-house.
So, what’s a Large Law firm to do?
Large Law firms that presume their expertise in a given practice area will help them keep clients are falling asleep on the job. Today, clients expect that and more. Here are three things Large Law firms should think about providing in addition to their legal service:
- Predictability: Clients frequently say they want the predictability and accountability provided by Alternative Fee Arrangements, and yet many Large Law firms do not offer them, or do not widely offer them. Large Law firms sometimes balk at AFAs because they fear they are unprofitable. This may be a concern that simply needs to be overcome; as more and more clients demand AFAs, a firm that does not have a strategy in place for such billing structures risks seeing its important clients drift away. A consensus is emerging that AFAs can be a profitable billing mechanism for around 80 percent of matters; it takes a detailed understanding of one’s own firm’s work processes and a track record for certain types of cases, but a feasible AFA can be created for most situations.
- Partnership: Large Law firms need to use analytics and tools so that they can understand their clients better than they understand themselves. Janet Bennett, Thomson Reuters’ National Sales Manager for Monitor Suite, explores the uses to which analytics and Big Data can be put in Part I and Part II of a recent post. A Large Law firm that understands its clients fully and can anticipate their needs is indispensable as a partner.
- Transparency: Lawyers sometimes take it for granted that clients understand what steps it takes to resolve a matter, or that they comprehend the long and variable nature of the legal process. To be blunt, they often do not. As Miriam Rivera pointed out, clients often feel like they do not know what happens between the start and end of a matter, and that can generate frustration. Effectively communicating with a client consistently throughout a matter reduces the chance that they will decide to do without a law firm’s services because of some kind of misunderstanding.
For further coverage of Consero’s General Counsel Data Survey, read “Survey: General Counsels’ Budgets Change, Delegation of Legal Work Doesn’t.”