Law Department Management

Hildebrandt International’s Advisory is designed to highlight trends and to provoke leading-edge thinking within the legal departments of organizations of all sizes. We recognize that no two legal departments are the same, and that each serves a client unique in its strategy and legal service needs. Therefore, although some generalizations do not apply to certain readers, we believe the thrust of our conclusions holds true.

The 21st Century In-House Legal Department—How Will it Deliver Value for Money?

As the demand for legal services increases globally, we predict that clients’1 sensitivity to the performance (cost and value) of their in-house legal department will increase substantially. This is likely to cause distress in many legal departments as they and their clients recognize they can no longer best serve their clients’ needs as they presently operate or are constituted. It will be challenging for them to:

• Rationalize their cost structures.
• Meet their clients’ demands for business solutions.
• Compete with the offerings of law firms.
• Excuse their managerial weaknesses.
• Respond as quickly as necessary to companywide change.

We address each of these over-arching concerns.

Law departments continue to be challenged — challenged to cut costs, reduce risk, become more efficient — while budget increases are still elusive.

As a technology consultant, no doubt I am quick to point to legal technologies that can help. Certainly, technologies such as matter management and electronic billing have become commonplace core technologies. However, I am often surprised at how many clients use only the basic functionality of their system and are missing opportunities to tackle today's challenges head-on.

Alternative Fee Arrangements (“AFAs”) continue to remain elusive for many Law Departments. Requesting fee discounts is still the preferred means for controlling outside legal spend among most corporate law departments. Other AFA types such as the flat fee, capped fee or success fee are less common. The challenges surrounding alternative fee arrangements include determining the best type of arrangement for the matter, knowing how to price the work, ensuring that the law firms continue to provide excellent service, and evaluating and comparing the price and work once the matter has been completed. Setting up AFAs that benefit both the law department and its law firm partners is an art and science.

Pressure on general counsel to reduce legal costs is not a new phenomenon. Prior economic downturns – in particular, in the early 1990s - led to the increased sophistication and innovation in the management of legal functions that we have observed during the past two decades. However, the current environment has increased this pressure to a new level, as law department managers seek to find new ways to drive down outside legal costs and operate more efficiently.

According to the 2009 Hildebrandt Law Department Survey, law departments are indeed changing the way they operate. They are implementing a wide range of cost management strategies as a way to cope and thrive in today’s economic environment. They are adopting new ways of doing business that demonstrate aggressive and innovative thinking on cost containment.

Reprinted with permission from the May 2008 edition of Corporate Counsel. © 2008 ALM Properties, Inc. All rights reserved.  Further duplication without permission is prohibited.

 

Ask any general counsel, and he or she will tell you that his or her department is viewed as an expense to the company, and that therefore they are under enormous pressure to cut costs and operate efficiently. These same GCs will also tell you that the law firms who will get the lion’s share of their outside counsel legal work in the future are those who understand these pressures and are prepared to help their clients reach their operational efficiency goals. yet many law firms—while they may understand this philosophically—are not stepping up to the plate and offering service delivery alternatives and solutions consistent with the notion of efficiency and expediency in the resolution of legal matters.

 

There are many ways that law firms can help their clients create cost effective solutions. Most are predicated on the similar principles of risk-sharing, partnership, innovation, and thinking from the client’s point of view. The  hallenge for law firms is to invest the time necessary to develop and implement ideas similar to those resented here—in a proactive manner and designed with the client kept firmly in mind. It is a race, and the first firms to demonstrate to clients that they understand the challenges by presenting effective solutions will win. Here are five ideas you should consider encouraging them to employ.

Reprinted with permission from the February 21, 2008 edition of GC New York.  © 2008 ALM Properties, Inc.  All rights reserved. Further duplication without permission is prohibited.

Law Departments intervene all the time in their law firms' internal operations. If a department retains a firm, the firm assigns staff, communicates, sends bills, and does other things. That much is obvious. But law departments over the past decades have increasingly pushed their law firms to do more than those basic steps any service provider takes. Lately, some of the interventions have caused consternation among law firms. What is far from obvious is where to draw the line.

This article divides the range of managerial interventions in law firm operations into three categories. Discussed first are services law departments should receive from all their firms in the normal course of dealings. The second category consists of the services a law department has the right to insist on from their primary law firms, the firms that it uses regularly and extensively. The third category covers the problematic, controversial demands: those services law departments should not expect from their law firms because they are overreaching. Thus, the article moves upwards from modest and acceptable expectations to undeserved impositions that significantly impinge on the management prerogatives of law-firm partners.

SOMERSET, N.J., October 12, 2009 – Hildebrandt, the legal profession’s premier consulting firm, today announced the release of its 2009 Law Department Survey. The 2009 Survey achieved an all-time high in participation, reflecting the strong interest of General Counsel and law department managers in benchmarking with peer organizations.

This year, the Hildebrandt Survey included 231 participants representing 21 industries and 22% of the companies on the Fortune 500 list. Over 30% of the companies have revenues at or above the Fortune 500 level. This includes companies that are privately held or based outside the United States.

Eagan, MN, May 11, 2010—Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, has introduced Thomson Reuters Engage, the first comprehensive Engagement Planning & Management (EPM) software tool that enables law firms to create, monitor and manage integrated budgets and work plans for matters and portfolios of matters. Thomson Reuters Engage is designed to meet law firm clients’ demands for transparent, predictable costs.

The landscape of the legal market is rapidly shifting. Firms are under increasing pressure to deliver more value to their clients in a cost-effective manner, and with plans and budgets that are consistent and predictable. Thomson Reuters Engage’s intuitive design and seamless integration with law firms’ existing management information systems – including time and billing, human resources, email and customer relationship management – allows attorneys to confidently manage within the evolving demands of today’s clients, including alternative fee arrangements.

SOMERSET, N.J., and HOUSTON, Dec. 4, 2009 – Hildebrandt and Baker Robbins & Company, the two leading consultancies serving the legal market, announced today that they will merge into a single company, effective Jan. 1, 2010. Both are part of the Business of Law group of Thomson Reuters.

Hildebrandt is the premier management consulting firm serving law firms and corporate and governmental law departments throughout the world. Baker Robbins & Company is the leading technology and business process consulting firm for the same market. Together, the new firm – which will be known as Hildebrandt Baker Robbins – will be the largest and most diversified consultancy serving the legal market, with more than 120 consultants working around the world in a broad range of practice areas.

November 19, 2009 - (Somerset, NJ) – Hildebrandt, the legal profession’s premier consulting firm, and a business within Thomson Reuters, today announced the release of key data on cost control strategies from its 2009 Law Department Survey.

According to the 2009 Hildebrandt Survey, law departments are implementing a wide range of cost management strategies as a way to cope and thrive in today’s economic environment. Cost control measures cited in the Survey encompass inside legal spending, legal staffing, outside counsel management, and technology.

SOMERSET, NJ, November 18, 2009 – Hildebrandt, the leading management consulting firm to the legal market, today announced the global expansion of Hildebrandt services in Beijing, Hong Kong and Sydney effective January 1, 2010.

The potential growth of the legal profession in Asia is impressive. Global firms continue to invest in the region although many lack a strategic business plan for their offices. Local and regional firms are also growing and we envision some potential consolidation of the market. The biggest challenge for local and regional firms is to put in place a structure and systems that will allow them to compete effectively in this changing market. We would not be surprised if there were consolidation between the growing Chinese firms and a major US or UK firm.

SOMERSET, N.J., October 12, 2009 – Hildebrandt, the legal profession’s premier consulting firm, today announced the release of its 2009 Law Department Survey. The 2009 Survey achieved an all-time high in participation, reflecting the strong interest of General Counsel and law department managers in benchmarking with peer organizations.

This year, the Hildebrandt Survey included 231 participants representing 21 industries and 22% of the companies on the Fortune 500 list. Over 30% of the companies have revenues at or above the Fortune 500 level. This includes companies that are privately held or based outside the United States.