Law Firm and Corporate Legal Services
Today’s legal market presents new and unique challenges for large law firms: clients are increasingly seeking reduced costs through discounts, inquiring about alternative fee arrangements, demanding greater transparency on bills, refusing to pay for junior associates, and using sourcing and procurement teams more frequently to negotiate with legal services providers. They are asking about, and in some cases, leading the way in making use of, new technologies and specialized legal process outsourcing (LPO) providers. At the same time, competition among firms for client assignments is growing progressively fiercer as more full-service law firms are chasing the same set of clients. And with each engagement, the pressure to demonstrate value and a willingness to innovate is higher than ever. Not only is there ever-increasing price pressure on legal services, but the nature of the law firm/client relationship is also changing.
On the client side of the relationship, it is not a bed of roses either. After many years of largely being left alone to manage their outside counsel relationships and ever-growing budgets, general counsel are being pressured to rationalize their legal spend and bring costs down. But the complexity of the legal and regulatory environment isn’t going away. Indeed, there are more, and more complicated, risks to manage than ever before. General counsel are also being asked to rethink how they deliver legal services to the corporation, and through what mix of internal and external staff and with how much automation. Along with other “headquarters functions” corporate legal services is being required to do a great deal more, with less; they are being challenged to bring more transparency and predictability to their spend, and to make use of contractual arrangements that connect cost to value and risk better than the old standby, the billable hour. While ever-increasing hourly rates for outside counsel were never easy to explain, refusing to do so is becoming a badge of honor.
These challenges generate both strategic and operational questions for both in-house and outside counsel to consider, separately and together:
- How should lawyer and client look at the use of third parties like an LPO provider? For what kinds of work, and under what kinds of conditions, are there efficiencies to be gained by leveraging their processes, tools, and access to different talent pools?
- Which fee structures are most effective for different types of projects, and what enabling mechanisms need to be in place to ensure that the arrangement does not impair the quality of the services, or become unsustainable economically?
- How can lawyer and client reframe their relationship, to preserve the best aspects of a trusted advisor and zealous advocate relationship, while recognizing the evolving commercial dynamics?
Vantage Partners works with law firms and corporate legal services groups, together or separately, to answer these questions and to respond effectively to the challenges each face today. Vantage draws on hands-on experience with major US and international law firms, years of experience with other professional service firms as they learned to respond to similar challenges, and deep experience in relationship management and outsourcing to develop and implement effective strategies for our clients.
Some ways we work with law firms and corporate legal services groups include:
- Advising on LPO strategy, including building and aligning practice or business unit groups around a tailored strategy for engaging LPO providers
- Supporting evaluation and selection of LPO providers, including gathering requirements, conducting RFx processes, and advising on selection and contract negotiations with providers
- Improving skills, processes, policies, and incentives for negotiating appropriate fee arrangements
- Assessing performance in law firm middle and front-office processes and recommending approaches to improve efficiency and value
- Improving the ability of law firms and their clients to manage engagements under fixed fee or other alternative arrangements and dealing with the corresponding challenges around scope creep and scope management.
- Working with corporate legal services groups to evaluate the current portfolio of legal services providers and help design an optimal future portfolio
For more information, please contact Danny Ertel or Mark Gordon.
To view Danny Ertel's blog, go to www.dannyertel.com