Law firms need to reassess their working methods to meet the expectations of in-house counsel, according to new research.
The Winmark Looking Glass Report 2010, The Legal World on its Future, says in-house counsel have grown in terms of number, role and status despite the recession and asks how law firms can match their expectations on fees, service delivery and commercial influence.
According to the report, based on research among top law firms and general counsel, companies are reallocating their legal budget to keep more legal spend in-house. On fees, general counsel “crave simplicity, clarity and predictability”, and law firms need to show a clearer link between what they cost their clients and the value they create.
Although the hourly rate is in declining use, 85% of general counsel say they still frequently use it. However, they would like to see more opportunities to negotiate value-based and results-based fees.
Despite the recession, a third of law firms have increased their IT spend and a quarter have boosted their marketing budgets. Marketing budgets are reallocating from traditional events such as hospitality to web and digital marketing.
While firms have been cutting headcount during the tough economic times, they will need to ensure they have enough commercial lawyers in place for the future. According to the report, clients will not put up with inflated salaries caused by lack of resources.
Sandie Okoro, general counsel, Barings Asset Management, says: “The legal profession faces a significant change in the coming years and it is becoming evident that the way to meet the associated challenges is not in isolation, but with both in-house and private practice working in genuine partnership.”
John Jeffcock, CEO of Winmark Ltd, says: “Our research shows that changes in the legal sector have spread faster than thought. The legal profession needs a better common script if it is to operate effectively in that changed environment.”
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