The July 2007 edition of Inside Counsel just arrived. This is the edition that has the results of the survey of General Counsel. Fascinating reading.
First, the Lake Wobegon effect continues to be alive and well. (I’ve covered the issue here, here and here.) Only 19% of outside lawyers give their outside firms an "A" for overall performance (down from 21% last year and 22% in 2005). Over 60% of the law firms give themselves an "A". Almost 40% of surveyed in-house counsel believe law firms pad their bills. Only 10% of outside lawyers share that belief. Seventy percent of inside counsel disagree with the notion that law firms are actively seeking ways to reduce the cost of their services, while 56% of the outside lawyers believe firms are seeking to do so. Almost 40% of the inside lawyers feel law firms make too much money; only 9% of the outside lawyers share that belief. Just under 30% of inside counsel respondents believe the level of service provided by their law firms has improved over the past five years, while almost 70% of the firms agree that service has improved.
Some of the quotes in the survey report are instructive:
"Law firms can’t say they are actively seeking ways to reduce costs and then pay incoming associates $160,000 per year."
Christine Helwick, GC,
California State University
"I always ask if we can have arrangements other than the hourly fee, but law firms shy away and offer reasons why it won’t work."
Christian Na, GC,
"I hold my thumb on my outside firms. It’s very labor intensive on my side to prevent a runaway budget."
Paul Risner, General Counsel,
Boca Raton Community Hospital
There is little in this report that should help managing partners sleep well at night. Save for one thing. It appears that despite the increasing volume of complaints about matters of great importance, there is no epidemic of firms being fired. But some day, inside counsel may realize that theirs is a buyers market.