In-House Paralegals

    Examining the

Law Firms You Use

The August 2010 issue of InsideCousnel features an article reporting the results of the magazine’s 20th Annual Survey of General Counsel in which more than 550 senior legal executives were interviewed on the current state of their legal departments and relationships with outside counsel.

It’s interest — well, at least to me — that law department leaders would give their law firms an overall passing grade of B (68.5% indicating they are generally happy with their outside counsel relationships); while, at the same, well less than half  (40.9% of the survey respondents) say their law firms understand their company’s business. 

It makes you wonder how important most corporate counsel feel it is for law firms to understand their client’s market, the company’s position in it and the business opportunities and challenges at hand.   To me, this is critical to smart and efficient legal representation.   I agree with Robin Jensen who is quoted in the article.

“It is a little bit like going to a doctor and having him treat your heart, when he has to treat the whole body.  They don’t know the nuances.“  Robin Jensen, General Counsel, Total Risk Management.

How demanding is your in-house team on your preferred outside counsel?  The survey indicated that 99.5% of respondents emphasize “responsiveness” in selecting law firms.  85.8% value “industry experience.”  And 82.1% seek “creative solutions.”  What was curious to me about this was that those GCs and CLOs interviewed were apparently not asked how they determine if a firm is responsive, experienced or creative. 

For example, if you want your law firms to be “responsive.” it’s your responsibility to tell them what needs to be done to meet your criteria for responsiveness.   Obviously, it doesn’t make sense to have them guessing.   Do you expect a return call with in 15 minutes?  Before close of business that day?  Will email response within 24 hours be OK?  

Similarly, if industry experience and/or creative solutions are important to you; if my law firm were trying to win your business and keep you happy as a client, I would want to how what you look to in determine if you’re getting what you want.        

What is clear from the survey is that most law department leaders say current economic conditions are increasing pressure on them to spend less on outside counsel.   Yet, here is strange contradiction.  51.4% indicated their law firms don’t recognize their clients’ budget constraints.  64.7% of those interviewed reported they require firms to submit a budget for new assignments — although 38.5% said their firms don’t adhere to budgets set on matters and another 15.4% don’t know what their firms do. 

If the pressure is really cranked up to cut back your company’s legal spend, wouldn’t you want to educate your outside counsel about your department’s budget restrictions and insist that your firms adhere to the budgets they give you?  Of course, you would.

Please take a few minutes to let us know how your legal team is doing.  Do you let your law firms know exactly what you expect and what criteria you use to judge if you are getting what you want?  Do you inform them in writing?  Do you openly discuss budget constraints with your preferred firms?  Do you require budgets on all new matters and demand that your outside counsel stick to set budgets unless you mutually agree to a change?  Do you encourage your firms to actively seek ways to reduce costs?  Do you reward them when they do?

How does your law department stack up?  What could you be doing better?