The Association of Corporate Counsel publishes a series of “Leading Practices Profiles” on their website that provide insights into how the law firms of today can improve their relationship with in-house counsel and increase the likelihood of being placed – or remaining – on a corporation’s panel of outside counsel.
Corporations seeking to reduce legal spend and drive value
In 2015, the ACC published Converging Law Firms: Leading Practices for Selecting, Implementing and Managing a Value-Driven Preferred Network, presenting information obtained from interviewing six legal departments and three law firms about how firms are chosen and managed in preferred outside counsel networks.
According to the report, “ACC’s 2015 CLO Survey found that converging outside counsel, negotiating alternative fee arrangements, and increasing reliance on in-house legal staff are the three most commonly cited strategies for reducing legal spending on external counsel,” and “external legal service providers are …hearing this call for value and responding with their own innovative, client-centered solutions.”
A previous report in the series, Using Non-Lawyer Personnel to Help Perform Legal Functions, discussed ways various corporations could save on their legal spend and more efficiently allocate both lawyer and non-lawyer resources to drive value for their companies. That 2014 report revealed that 63 percent of respondents are now regularly in-sourcing work formerly performed by outside legal service providers and are actively seeking to focus on external counsel management and to converge complex matters into a preferred pool of outside firms.” As one survey respondent noted, “The goal is to use external counsel in high-risk areas where we’re going to get a high-value return.”
Staffing and collaboration matter
Sometimes, providing value means recognizing when the firm cannot staff or budget appropriately, and therefore must turn down the work. One survey participant related a story about turning down a project offered by a client and recommending another firm in their network who billed over $1 million on the matter, saying, “[U]ltimately this decision did more to cement the relationship than any other action over the last seven years of our very successful partnership with this organizational client.”
Firms involved in the ACC report emphasize collaboration among firms in the network or on the panel. According to the AC report, “Network firms serving companies profiled here repeatedly demonstrate their willingness to collaborate for better client outcomes.” They work together, share work product and strategies, and regularly evaluate staffing to ensure the best result for the client, and improving efficiencies.
These reports make it clear that law firms need to invest resources into new technology and innovative ways of delivering legal services to reduce costs and increase value for their clients.
Improving law firm staffing mechanisms to ensure client matters are staffed appropriately and that the firm can immediately use to determine whether they can effectively represent the client within budget and with the required expertise is essential to effectively surviving the law firm convergence model. Firms who will be successful in these integrated networks are those who can demonstrate that they have implemented mechanisms to track data internally, and who can provide accurate bids to corporate legal departments for their work.
Implementing technology that allows lawyers to collaborate effectively both within their own firm and externally with law departments and other counsel on the panel can further demonstrate the firm’s value to the client and their outside counsel network. But firms that do not have these technologies, collaborative capabilities, or the ability to easily identify appropriate lawyers within the firm to staff client matters will find it difficult to obtain corporate work in the future.
Is your firm ready for the “law firm convergence” trend? ioRefer, a leading online platform streamlining the referral management and matter staffing process for law firms, bar associations, and legal referral groups can help. It replaces the traditional and ineffective processes with an efficient, online process, that allows attorneys to quickly send client referrals and matters to all relevant attorneys at one time and facilitates a seamless connection with the best attorneys available to handle the matter.