Two thirds of the world’s in-house counsel are using some form of value-based fee arrangement to lower the cost of work sent to outside lawyers, the Association of Corporate Counsel (ACC) has found. The 63% figure for corporate lawyers who have secured such arrangements in the past 12 months marks a dramatic increase on the 21% recorded for 2008, with the effects of the economic downturn since that year cited as the main factor behind the rise.
The findings emerged from the ACC’s Annual CLO Survey, which this year had responses from 1,165 lawyers holding the title of either General Counsel (GC) or Chief Legal Officer (CLO). Significantly, the ACC’s figure for in-house lawyers using value-based fee arrangements corroborates almost to a percentage point recent US and UK findings from law firm Fulbright & Jaworski.
Costs also took pole position in respondents’ thoughts on which changes would improve their relationships with outside counsel. While 47% said that wider availability of value-based fees, fixed fees or discounted rates would brighten up their dealings with law firms, 59% said that this could be achieved through a greater focus on case management and budget management.
ACC president and CEO Veta T Richardson commented: ‘Client service and managing outside counsel relationships are at the heart of what in-house counsel do, and it’s no surprise that the survey results emphasise their interest in establishing better relationships with their outside counsel. The success of CLOs in addressing company priorities while managing costs with outside counsel further solidifies their credibility and importance within their respective organisations.’
In further findings, the proportion of respondents who planned to increase the ranks of their legal departments rose from 23% in 2009 and 29% in 2010 to 37% this year. In the main, these lawyers intended to hire staff experienced in both specialist work and the management of commoditised tasks.
In-house lawyers fighting downturn with efforts to reduce spend on legal services and negotiate different cost models with their law firms