The recent ‘Chief Legal Officers 2017 Survey’ from the Association of Corporate Counsel interviewed more than 1,100 chief legal offices and general counsel from companies spread across 42 countries, and found that almost half are considering giving one of their outside firms the flick this year. Around 10 per cent of respondents reported that they will ‘definitely’ terminate an outside counsel contract this year with the intent to hire a new firm to complete the same work, while a further 36 per cent said they were considering it. Moreover, almost one-in-three respondents said that they had terminated an outside counsel contract last year due to underperformance on the part of the law firm.
Litigation drives outside spend
Despite the bubbling dissatisfaction with outside counsel performance, CLOs and GCs in the ACC’s recent survey seemed to be bucking the trend of shifting an increasing amount of work to in-house staffers. Overall, 79 per cent of respondents said they would either maintain or increase the amount of work they send out to firms in the coming year, while only 18 per cent of respondents said they were planning to decrease the amount of work they send out. Outside assistance needed with litigation continues to drive work into the hands of firms, with 97 per cent of respondents saying they would engage outside counsel for complex litigation matters and firms spending on average 24 per cent of the department budget on litigation matters. However, this proportion rises to more than 50 per cent for larger departments with budgets in excess of US$50 million.