How Corporate Counsel Challenged Law Firms

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2009 was reputed to be the worst for budget-slashing and layoffs in recent memory in the legal industry. As companies struggled to keep afloat while the markets were crashing, clients’ legal budgets were slashed by any figure from 5 to 20%, with increasing pressures to reduce legal spend. Corporate counsels’ response through the ACC (Association of Corporate Counsel) Value Challenge to law firms was: “Show me the value”.

The most significant tool to emerge out of the Value Challenge is the ACC Value Index. It is an online forum where corporate counsel get to rate external counsel in six categories and the ratings are shared by members.

The increasing pressure brought to bear by general counsel upon law firms for transparency in billing and more value for cost has led some of the major law firms in the UK and US to rethink their value proposition.

The Law Firm Evolution Conference concluded in March, 2010 at the Georgetown University Law Center considered whether new "efficiency" business practices by law firms herald a wind of change which would benefit corporate law departments or whether it is only a temporary disruption to the traditional law firm business model.

Shifting attitudes in the industry also saw the development of the outsourcing market, most significantly in India where new outsourcing firms, staffed with lawyers and support staff began to offer the lower end repeatable legal work at far cheaper rates than in North America and the UK.

The year 2010 has also seen a sprinkling of onshore outsourcing companies entering the US and UK market with a variety of offerings designed to take over the grunt work in high volume processes such as document review and assembly, legal transcription, legal research, e-discovery and other aspects of litigation support and readiness.

The number of legal management consultancies offering higher end strategic and risk management services is also on the rise in 2010.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Shireen Ali | Attorney Advertising

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