Archive for the ‘Inside-Outside relationship’ Category

What do in-house lawyers read?

April 10th, 2015 by Altman Weil

“This matters, of course. First, if you want to talk intelligently to in-house lawyers, you should have a sense of what’s on their mind. Second, if you ever write articles with an eye on developing business, it would be nice to know that the target audience is seeing the stuff that you write.”

So says Above the Law columnist Mark Herrmann in this is must-read article for every law firm marketer and every lawyer who writes to promote his or her practice.

Read it at Above the Law

Most clients don’t want the lowest price available

October 30th, 2013 by Altman Weil

Altman Weil released its 14th annual Chief Legal Officer Survey last week, with lots of interesting data for corporate law departments as well as the law firms that serve them.  One of the most surprising survey findings involves pricing.  When asked about preferred outside counsel pricing scenarios, the over 200 Chief Legal Officers who participated in the survey overwhelmingly indicated that their preference is not for the lowest price they can get.

The survey outlined four possible law firm pricing options.  Here are client preferences:

  • Transparent pricing:  We want to understand how/why the price is set and have the opportunity to discuss changes - 36.4%
  • Guaranteed pricing: We want to know in advance what it will cost - 33.7%
  • Value-based pricing:  We want to pay a variable price based on the results we get - 20.3%
  • Lowest pricing: We want the lowest price available - 9.6%  

“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. So far this is a challenge that most law firms have been slow to address,” according to Altman Weil principal and survey author Dan Dilucchio.

Read it at Altman Weil

Law department cost cutting

February 20th, 2013 by Altman Weil

Pinhawk Law Technology Daily Digest points out a new blog post from the Corporate Executive Board on law department cost cutting and efficiency.  The CEB has analyzed in-house department budgets and identified common practices among those departments with lower than average costs, and therefore greater efficiency.  They describe nine trends, including:

  • Bringing more work in-house
  • Unbundling legal services and giving lower level tasks to non-law firms
  • Using smaller firms because they tend to charge less
  • Consolidating the department’s work with fewer firms to negotiate better rates

Law departments take note.  Law firms beware!

Read it at Corporate Executive Board

Business development is not a department, it’s a discipline

February 8th, 2013 by Altman Weil

 ”BD is not a department, ‘it is a discipline along with every other expertise in the firm.’ It can be taught—and learned.”

That’s the momey quote in Aric Press’ new article in The American Lawyer on how law firms must approach business development and client relationships in 2013.  He profiles the “Smarter Business Development Model” created by Trevor Faure, Ernst & Young’s global leader for legal services and former Tyco European GC.

Faure has set forth six traits law firms need to adopt, as well as four things all clients want.  Of course it’s not quite that simple, but it’s a very good place to start.  Worth reading.

Read it at The American Lawyer

Client tests for efficiency - firms fail to deliver

January 24th, 2013 by Altman Weil

There’s a wonderful article in today’s Law Technology News that illustrates the disconnect between law firms and their clients when it comes to efficiency.  Casey Flaherty, corporate counsel for Kia Motors America, has written about a test he gives law firm associates.  This test uses a few mock legal assignments to assess associates’ competence in a number of basic tech programs, but more to the point, it assesses their law firm’s ability to deliver work efficiently. Done properly, each task can be completed in 20 minutes. 

Here is his description of the results:

“Not a single associate at any of the nine firms I have audited has come anywhere close to the 20-minute mark on the first assignment. That is, all of the associates approached the assignment in ways that would have required five to 15 times longer than necessary. At $200 to $400 per associate hour, such inefficiency suggests to me that, indeed, waste is a righteous concern.

Failing my audit has repercussions. Of the nine major firms I have audited, all nine have failed — some more miserably than others. A few of these firms were auditioning for work and were not retained. Other firms, including longtime incumbents, agreed to rate reductions. One firm, for example, took an across-the-board 5 percent reduction that will be restored if they are able to pass a subsequent audit. Another firm agreed to a significant investment in associate training and has worked closely with me to upgrade a substantial number of their internal practices and processes. Finally, audit results influence my review of counsels’ billing entries.”

The author goes on to describe the tests in some depth – but don’t get lost in the details of Excel spreadsheets.  The point is that client expectations for efficient delivery of legal services have changed.  Law firms cannot, in Mr. Flaherty’s words, simply ”throw expensive bodies at a problem” any longer. 

Read it at Law Technology News

Innovation in law firms

December 20th, 2012 by Altman Weil

What constitutes an “innovative” law firm?  Is innovation really important to clients?  In its 3rd annual US Innovative Lawyers report, the Financial Times recognizes 25 firms that have undertaken new initiatives to positively differentiate themselves among clients.

For example…

  • “Cleary Gottlieb Steen & Hamilton designed its own $2m in-house “mini MBA”, which will be mandatory for its first-year associates.”
  • “Davis Polk & Wardwell, has been pushing for its youngest lawyers to be more useful to clients – and more profitable for the firm – by choosing a specialist practice area much sooner than is traditionally the case.”
  • Paul Hastings is “overhauling its secondment programme to include more senior lawyers, including counsel and partners.”
  • A Holland & Knight practice group developed a fixed fee strategy “that simply measures output rather than time” thereby pleasing clients and saving the firm half a million dollars in administrative costs.

Read it at Financial Times

Chief Legal Officers are pushing for change

November 5th, 2012 by Altman Weil

Corporate law departments report that they are re-negotiating outside counsel fees, shifting work to lower-priced law firms, increasing in-house capacity, opting for alternative service providers and using new technology — all to develop a more cost-effective legal services model — according to over 200 General Counsel who participated in the Altman Weil 2012 Chief Legal Officer Survey.

“Chief Legal Officers are not waiting for law firms to change their business models,” said Altman Weil principal Daniel J. DiLucchio.  “They are taking change into their own hands in 2012 to create a new internal value proposition.”

Read it at Altman Weil

Why do clients fire law firms?

May 22nd, 2012 by Altman Weil

Here’s a quick reminder from a recent meeting of the Georgia Chapter of the Association of Corporate Counsel on how not to treat clients…

Read it at Corporate Counsel

Cultivating (another firm’s) clients

April 26th, 2012 by Altman Weil

How can a law firm that wants new business displace a competent incumbent firm?”  Aon VP and Chief Counsel and Above the Law blogger, Mark Herrmann posed this question to a panel of GCs recently. 

The answer is you need some luck.  He and his colleagues concluded that although there are circumstances when it can happen (he describes a few likely scenarios), they are outside of the control of an aspiring law firm.  But don’t despair.  Here’s his excellent conclusion:

“Consider what this means for law firms in the on-deck position — firms that are not currently doing business for a company, but would be at the top of the list if the incumbent flubbed something, lacked capacity, or saw a key lawyer leave. If you’re looking for a sweet spot, that may be it. Make contact with an in-house lawyer; stay gently in touch over time, forwarding items of (actual) interest perhaps once a month; and make sure the in-house lawyer remembers your name and area of expertise. When an event outside of your control occurs, you want your name to be at the top of the list of possible replacement firms.

The on-deck circle is an important place to be. Spend your time there intelligently.”

Read it at Above the Law

New billing rate study

April 17th, 2012 by Altman Weil

Software company, TyMetrix Legal Analytics, in association with Corporate Executive Board, has announced publication of the 2012 Real Rate Report.  The report analyzes law firm billing rate trends based on data from $7.6 billion in legal bills from 4,000 law firms, issued between 2007 to 2011. 

TyMetrix shared these highlights:

  • The Most Expensive Lawyers Are Getting More Expensive. Rates for the highest billing partners ($800+ per hour) grew nearly three times faster than rates for the lowest billing partners (less than $300 per hour), and rates for the highest billing associates ($500+ per hour) grew nearly five times as fast as the lowest billing associates (less than $200 per hour).
  • Clients Are Willing to Pay a Premium for Large Law Firm Work. The percentage increase for firms with more than 1,000 lawyers was double what the smallest firms experienced. The average hourly rates from 2009-2011 for law firms with 501-1,000 lawyers increased by 13 percent compared to a 4 percent rate increase at law firms with 1-50 lawyers.
  • Lawyers Charge Different Hourly Rates to Different Clients For Similar Work.  In 2011, 90 percent of lawyers charged different rates for similar types of work. Intellectual property and commercial contracts practices had the highest percentage difference in rates (23.1 percent and 18.7 percent, respectively), while regulatory and finance/securities/banking saw the lowest percentage difference in rates (about 11 percent).
  • Higher Spend Equals Higher Rates - Consolidation Not Necessarily Associated with Lower Hourly Rates. Some in-house legal departments have had success consolidating work into a single law firm, but the data reveals that rates actually tend to increase as a law firm takes on more work from a client.
  • Use of Entry-Level Lawyers Can Add Significant Costs to Legal Matter.  The data confirms that the use of entry-level lawyers (associates with less than 2 years’ experience since passing the bar exam) continues to decline.  Notably, the data also show that matters staffed with entry-level associates tend to cost as much as 20 percent more.

Read it at TyMetrix

Needless to say, this is interesting stuff and has gotten some attention:

The AmLaw Daily talked to TyMetrix:

“What it’s really showing is that there’s an increased premium being paid for experience and expertise,” says Julie Peck, vice president of strategy and market development at TyMetrix. “Some parts of the lawyer market are able to raise rates much more quickly, and are more impervious to economic forces than others.”

Read it at the AmLaw Daily

The Wall Street Journal talked to some General Counsel about the report’s findings:

“I’m really seeing pretty much everybody across the board, big and small [law firms], trying to raise their rates. The small ones are not as successful,” said Lewis Steverson, general counsel for Motorola Solutions… “We get more push-back from the big firms.”


“There are a large number of lawyers today who find themselves in the uncomfortable position of being, for lack of a better phrase, commodity service providers,” said Ken Grady, deputy general counsel at footwear company Wolverine World Wide Inc. “You don’t see a lot of big rate increases being asked for in those areas, and that’s not something they expect to get.”

Read it at the Wall Street Journal (subscription required)