September 28, 2011
The economic challenges faced by law firms in the past three years have been transformative in many aspects and have forced them to cut staff, overwork existing employees, and search high and low for new ways to save money and improve efficiencies.
A recent HBR Law Department Survey found that, for the first time in memory, law departments in 2009 reduced their total spending for outside counsel by 5 percent in the United States and 6 percent worldwide.
This cutback reflected an overall reduction in total legal spending of respondent companies by 1 percent in the U.S. – a dramatic about-face considering total legal spending by law departments grew by an average of 7 percent a year in each of the preceding nine years.
Whether it is pressure from the clients they serve, the Association of Corporate Counsel’s (ACC) Value Challenge, or making Alternative Fee Arrangements work, traditional law firm business methodologies are changing and clients are demanding increased value in legal services at lower costs.
General Counsel (GC) are employing a variety of strategies to control legal spend, including bringing more work in-house, pushing back on billing rates, and challenging outside counsel to consider alternative billing models.
In fact, 69 percent of U.S. law departments reported keeping more work in-house during 2009, and 71 percent expected to move more work in-house in 2010.
All of these expense management initiatives are designed to offer greater savings to the corporation and to their clients.
Beyond cost, clients are also looking for the quality and value they receive in legal services…Download full FREE REPORT
Co-authored by Amy Larson, Marketing Manager for WestlawNext , and Lydia Flocchini, Director of Marketing for WestlawNext.