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Law firms not serious about improving service delivery, say clients

Many disgruntled CLOs are now focusing on creating new internal value propositions

21 November 2012

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By Manju Manglani, Editor (@ManjuManglani)

Many law firms are not serious about changing their legal service delivery models to provide greater value to clients, according to a US survey of chief legal officers (CLOs).

Only a fifth of law firms are moderately serious about changing their business models to deliver greater value to clients, respondents said. Over three quarters said law firms are treating this as a low priority.

The findings of the Altman Weil survey are based on responses from 204 CLOs, of which 72 per cent said their organisation has annual revenues of between $1bn and $20bn, and 15 per cent said their organisation has revenues of over $20bn. Half of all respondents said they have lawyers resident outside of the US.

According to 49 per cent of respondents, corporations are putting moderate pressure on law firms to change the value proposition of their legal services delivery rather than simply cutting costs. A further 47 per cent said the pressure being placed on law firms is low.

In response, CLOs are not waiting for law firms to change their business models and are instead taking several steps to develop a more cost-effective legal services model.

Nearly two thirds of responding CLOs said they are making greater use of technology tools to boost their legal department’s efficiency. Just under half of respondents said they are making greater use of paralegals and other paraprofessionals.

About two fifths of respondents said they are using project staffing with contract/temporary lawyers. A quarter said they are outsourcing work to non-law firm vendors, while a fifth are using project management training.

Other areas in which CLOs said they are increasing efficiencies include: better monitoring of outside counsel utilisation; focusing on vendor selection practices/RFP processes; transferring some work to the compliance department and business units; hiring JDs into paraprofessional roles at paraprofessional salaries; increasing business focused and CLE training; and implementing continuous improvement projects.

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