What's Really Going On in Today's Legal Departments?

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We all know these are tough times--and tough times breed agitation and instability. With increased layoffs comes an uptick in labor issues. With more ferocious brand protection comes more IP actions. And with shrinking budgets comes a greater scrutiny of the law firms charged with handling the work.

Practice Makes Too Perfect

When dealing with high-stakes legal issues, it would seem that a lawyer could never be too careful--but many GCs voiced a dissatisfaction with the amount of resources their law firms allocate to issues that could be managed with good enough, if imperfect, solutions. Budgets strapped for cash and businessmen strapped for time demand an efficient response that law firms don't always provide.

Small Change We Can Believe In

Small law firms saw a big boost in business in 2009 as more legal departments sought outside counsel with a lower price tag. Nearly 65 percent of respondents reported retaining small regional firms more frequently in the past two years than they did previously. The reason to switch to smaller firms, in most cases, was cost--90.3 percent of respondents said economic conditions are increasing the pressure to spend less on outside counsel. But the reason to stick with them, many GCs said, is quality.

Working It In

If InsideCounsel merely reported that more legal work is being done in-house these days, most in-house attorneys would likely say, "Tell me something I don't know." Nearly 70 percent of respondents say that the amount of work handled in-house has grown significantly during the past two years.

What's the Alternative?

Alternative fee arrangements are important to more than half the GCs who responded to the survey--no surprise there. The discrepancy between the number of GCs who value AFAs and the number who actually secure them, however, is great. Only 34.2 percent responded that firms they work with have begun to move away from the billable hour. And many of the respondents said that so-called alternative arrangements are often just repackaged versions of the same old financial formula.

Associate Editor

Lauren Williamson

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