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Understanding clients’ business the top factor in law firm selection

But personal chemistry can affect whether firms are instructed again

2 May 2012

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By Manju Manglani, Editor (@ManjuManglani)

Corporate counsel are most likely to refer work to law firms that demonstrate an understanding of their organisation’s business needs, objectives and culture, a recent Western Europe survey has found.

Other key selection factors include perceived levels of client service, responsiveness and communication. Lawyer expertise and acting as a trusted adviser were also ranked as important. Interestingly, cost was not cited as a key factor in initial selection processes.

The quality of interpersonal relationships is however important for some in-house counsel. About a fifth of all respondents cited chemistry, trust or some other variation on the theme of building and maintaining good human relations as a determining factor in whether they instructed a particular law firm, the research report noted.

This is particularly important for UK corporate counsel – 61 per cent suggested they would retain a firm again if the chemistry is right and a quarter said they would remove a firm if they did not like the lawyers dealing with their work.

When asked what other factors would lead a law firm to be selected for a second time, the quality of the team as a whole was cited as the most important factor, followed by knowledge of the client’s business and the cost or approach to billing.

However, poor service was found to be the fastest route to being removed from a preferred list, followed by unfair or unclear billing.

The survey also found that firms need to do more to listen and learn from client feedback. Nearly all respondents said they would be willing to participate in formal client satisfaction surveys, yet only half have been asked to participate.

Corporate counsel also said they would value having dedicated time to sit down with their legal advisers, whether to talk about their issues or review recent work, but this is only offered by about a quarter of respondents’ law firms.

The biggest challenges in-house counsel said they are facing in the next year are costs control, increased workloads and litigation/risk management. Indeed, achieving better value for money has been the main driver to review panel firms in recent years.

Although the report noted that there was no clear consensus about whether legal budgets would rise or fall in the next 12 months, 43 per cent of respondents said they anticipate their overall spend to remain constant.

Published in The Selection and Retention of Law Firms in Western Europe, the LexisNexis Martindale-Hubbell survey reflects the views of 219 in-house counsel from companies across Western Europe. Sixty-one per cent of respondents work for a subsidiary of a larger organisation and 23 per cent work for a US subsidiary.

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