Chief legal officers: cost pressures biggest issue

Chief legal officers say internal and external cost pressures were their biggest concern in managing their law departments this year, according to survey results released Tuesday by Altman Weil.

The 2015 Chief Legal Officer Survey found 40 percent of law departments plan to decrease their spending on outside counsel in the next 12 months, with 76 percent of those respondents saying some of the work would go to their own in-house legal counsel. Thirteen percent of chief legal officers will use vendors and 9 percent will use contract lawyers to cover the work done previously by law firms.

Only about 20 percent of survey respondents said they plan to increase outside counsel expenditures in the next year.

In dealing with managing costs, 68 percent of law departments report receiving fee discounts from law firms and 60 percent used alternative or fixed fee arrangements to cut costs. Receiving price reductions was one of the most highly valued law department cost control efforts.

Chief legal officers also outlined what they want from their outside counsel: 50 percent chose greater cost reduction and 46 percent desired improved budget forecasting. Thirty six percent said non-hourly pricing. CLOs also want more conversations about budget/pricing, matter management efficiency and project staffing.

“The message seems clear: Chief Legal Officers want to work more collaboratively with law firms to rethink how their work is priced, managed and staffed.  They don’t want to be only buyers of law firm services — they want to have a strategic voice in how that work is done,” according to Altman Weil.

The survey has been conducted by Altman Weil since 2000. It received 258 responses for this year’s survey, which is 19 percent of the 1,363 law departments invited to participate. The full survey is available at http://www.altmanweil.com/CLE2015.