In-house teams keep more work

The survey predicted a decrease of 4 per cent in spending on outside counsel for 2001, mirrored by an increase of 5 per cent on in-house law department spending. This reflects what the survey calls the two most pressing issues for in-house lawyers – reducing outside legal costs, and too much work for too few resources. In-house lawyers also predicted that hourly rates for external lawyers will increase at a much slower rate than they did last year.
In-house counsel still rely heavily on referrals when selecting external counsel, and quality rather than hourly rates is the main criteria in the selection process. But law firms were heavily criticised for “cost consciousness, being proactive and predictive accuracy”.
Respondents to the survey said that they would most like their law firms to be “better at controlling legal spending, and at forecasting their legal costs and outcomes”.
The Partnering with Outside Counsel Survey attracted responses from 343 companies across 20 industry sectors. It also found that technology was playing a greater a role both in instruction and monitoring of the relationship with external counsel. Internet directories and law firm websites played a small but increasing role when choosing outside counsel, and internet-based technology was often used to work with external law firms.