02 September 2015

GCs and law firms don't see eye to eye

GCs and law firms don't see eye to eye on billing, strategy and procurement, research by Corporate Counsel Exchange has revealed.

By Bernard Goyder


General counsel and partners have radically different views on billing, procurement and strategy, a survey of in-house lawyers has revealed. GCs from 125 companies were quizzed by Corporate Counsel Exchange, along with 86 senior corporate lawyers. The research found that while 74 per cent of external lawyers felt procurement departments were muscling in on legal services tendering, only 20 per cent of GCs felt the same way, with four-fifths of GCs maintaining that law firms called the shots. Another stark contrast was in the approach to project management, with only 17 per cent of the law firm staff agreeing it was very important to take a project management approach to clients, compared to 60 per cent of GCs. Two-thirds of the GCs that participated in the survey came from companies with more than US$1bn in annual sales and over 1,000 employees, while the corporate lawyers came from the UKs 'top 120 firms', according to data from the Legal Exchange Network.

Alternative fee arrangements

On billing, there was a consensus that GCs want to move away from hourly billing, in favour of alternative fee arrnagements. 'Often the problem is that you ask for a fixed fee but then most of the law firms try to build in a couple of escape clauses' said one GC. More than half of law firm partners asked said GCs often asked for alternative billing methods, but reverted to an hourly rate when a project was completed, a statement 72 per cent of GCs disagreed with. A second GC noted: 'The fear is, with a lot of in-house lawyers, including myself, is that if you agree on a fixed fee you’ll always have this worry of, am I paying too much?'  Source: Corporate Counsel Exchange

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