More company lawyers are being hired, while a third of outside counsel are to be fired, according to an in-house counsel study.
In the eighth annual Chief Legal Officer Survey, Altman Weil and LexisNexis report that 40% of chief legal officers (CLOs) in the US plan to hire in the next year, up from 36% last year, with specialist attorneys in greatest demand.
Law departments have added an average extra 1.7 new positions in the last two to three years—triple that reported in the 2006 survey. In the coming year, 18% of law departments plan to increase their use of outside counsel, up from 14% last year.
However, nearly a third of CLOs have fired or are considering firing at least one of their outside law firms this year. This is slightly up on last year’s 30% of CLOs firing, but is well below previous years where the figure scaled 50%–60%. Grievances included “poor quality legal work”, “lack of responsiveness” and “cost management issues”.
Those outside firms worried about their future should note that “improved communication” was the top response among CLOs when asked how outside counsel had improved their working relationship with the law department. Reduced fees, better budgeting and improved billing practices ranked second.
Compliance has been the top concern for CLOs in each survey since 2003, and topped the list again this year.
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