Frustration with high legal fees and demand for local regulatory knowledge may give small and medium-sized law firms an edge with larger clients, according to a survey reported by The American Lawyer. The survey, released by the Economist Intelligence Unit and business-to-business marketplace Globality, found that multinational companies are seeing benefits in working with small and medium-sized firms because they can offer the same quality of legal advice at more reasonable prices.
According to the report, smaller firms can be more cost-effective because they have lower overheads, allowing them to charge more moderate rates. As a result, they are able to provide the same legal expertise at a lower cost. They can also often provide regional or specialized expertise because they focus on providing services in a specialized community or area of the law. That can be appealing for multinational organizations that may have legal issues in different international jurisdictions [as quoted by Globality].
“Companies often highlight that they like the personalized experience and top-level attention from senior lawyers that smaller providers can bring to them, which is something that larger law firms need to determine how to emulate,” notes Stefan Zorn, Vice President of Customer Success at Globality.
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In-House Counsel at large international companies experience greater satisfaction when working with small or medium sized firms, according to a new survey reported on The American Lawyer. The survey, released by The Lawyer Research Service in collaboration with Globality, found respondents at large global companies are three times more dissatisfied working with larger law firms (19%) than smaller ones (6%).
Of the 71% of respondents that outsource the majority of work to smaller firms, nearly two-thirds (63%) report smaller firms provide better client service and almost half (40%) find smaller firms to be more innovative than traditional Big Law firms. Additionally, companies are becoming increasingly turned off by large firms due to their high prices, with over half of survey respondents saying their primary frustration when working with larger law firms is cost.
“We get better client service from smaller firms. When we instruct larger firms, we are probably one of their smaller customers and just another customer in the long list they already have. If you go to a smaller firm, even with a fairly small legal spend, we can be an important customer to them,” said Ben Woolf, General Counsel EMEA at Tate & Lyle, a U.K.-based multinational agribusiness, in a press release announcing the survey results.
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In-house attorneys have always extolled the abolishment of the billable hour as a major plus over traditional firm life. But now, The American Lawyer reports that the time sheet “seems to be gaining popularity with in-house lawyers,” many who have begun using the it as a way to prove their worth to their employers.
Stephen Kaplan, general counsel and executive vice president of XOS Digital, is a strong proponent of the time sheet, having started tracking his own hours over a decade ago. Kaplan notes that “the legal department is one of the only departments in companies that, without tracking hours, has difficulty coming up with the metrics that prove the company’s return on investment is worthwhile”–metrics that, since the recession, have become “increasingly important in the eyes of chief financial officers,” (as quoted in The American Lawyer). Kaplan further points out that the job of every CFO today is to “ask the hard question of every single member of every single company: Why are you here?”
Although in-house attorneys, as non-income generators for the company, may have the most to gain from using time sheets to prove their value, some companies are now requiring all departments to report billable hours for clients. Adam Rubin, general counsel for PrizeLogic, says that tracking hours is standard at his company, and observes that “this is a trend, not just for lawyers, but for all employees,” (as quoted in The American Lawyer).
Of course, many attorneys still feel that tracking billable hours is a unnecessary and time-consuming burden. Rubin argues that basing the worth of an in-house lawyer solely on the hours worked means that “you’re missing out on a more important analysis of the employee,” (The American Lawyer).
Kaplan concedes that tracking time may not be necessary if “you are naturally very organized or if you work in a department where your value has never been called into question,” but concludes, “How many of us are in an environment that checks both of those boxes?”
The dream of the 9-to-5 in-house workweek is quickly unraveling, reports Melissa Maleske of Law360. A 2015 global census by the Association of Corporate Counsel found that worldwide, in-house counsel workweeks average at 49 hours, with India reporting the highest average hours at 54 per week. The U.S. falls only slightly behind with a 50-hour week average.
The 2015 ACC Global Census also ascertained that close to 80 percent of in-house counsels work 40 to 59 hours per week. The research and development industry were reported to have the highest increase in in-house counsel workloads.
Salaries have also moved towards the extremes, with “more corporate counsels making $100,000 or less and making $300,000 or more,” Law360 reports from the census.
The ACC concludes that that while “many cite greater work-life balance as a key factor in coming in-house…in-house lawyers are [now] working an extended workweek.”