For GCs, It's About Cost Now

"This is not going away. This is not a passing fad," said Stephen B. Kaplan, senior vice president and general counsel of Connextions, Inc., at last month's Marketing Partner Forum, in a session on tools and techniques for law firms and clients to build effective partnerships. As a general counsel, he was commenting on outsourcing commodity work offshore.

While law departments face increasing pressure from their internal clients to cut costs and deliver value, some work is going offshore, and some is going to firms charging lower rates. Corporate Counsel magazine reports that the "overall cost of legal services is the aspect of the relationship with law firms that GCs would most like to change; 65 percent said so," in its survey, conducted with ALM Legal Intelligence, of 107 general counsel and some of their deputies at U.S. companies.

But too many firms aren't listening. William B. Sailer, senior vice president and legal counsel of QUALCOMM Incorporated, called developing a value billing process with his main law firm "a frustrating process," in another session at the Marketing Partner Forum.

"One response to high outside legal costs has been to take more work in-house," said Jonathan J. Oviatt, chief legal officer and corporate secretary at the Mayo Clinic. He spoke at the Association of Corporate Counsel's CLO Roundtable during the ACC's Annual Meeting, which ACC Docket reported on in the January/February issue.

"In fact, over a number of years, we have grown our in-house in proportion to outside counsel," Oviatt said. "And I think part of that is because you can manage costs better in-house."

Tiegue Thomas, vice president and general counsel of Acer American Corp/Gateway, Inc., told the Roundtable that the flagging economy has helped her shift the discussion to new models that will allow her to be more efficient with her budget by using external lawyers differently.

"The way we're doing that is to say: 'Hey, big law firm, we want you to be lead counsel in this case, and we want you to provide strategic direction, but we may not need you to do all aspects of the case. And we're going to figure out different providers that may complement what you're doing.' So, they're not necessarily going to be providing a complete solution anymore."

"I think the law firms that survive will be the ones that partner with in-house teams to pull together a portfolio of service providers to deliver real value to the company for less money," said Dan Fitz, group general counsel of British Telecommunications plc, at the Roundtable. "It's all about less money, while still getting that critical $1,000-an-hour advice when you need it."

Does your firm get the message? Strategic Client Interviews will help you learn how to partner with your firm's clients, and deliver the value they want.

For more information on Strategic Client Interviews, contact Joyce K. Smiley at 561-775-9755, or jsmiley@jkscompany.com. On the web at jkscompany.com.

Verbatim: What Clients Say is published electronically by JKS & Company LLC/Strategic Client Interviews. Copyright 2012 JKS & Company LLC. All rights reserved.