Talk is Cheap: Low Cost Law Firm Initiatives Can Cement Relationships With In-House Counsel
(NEWTOWN SQUARE, PA, December 1, 2005) -- The 2005 Chief Legal Officer Survey, conducted annually by the Association of Corporate Counsel (ACC) and Altman Weil, Inc., has just been released. The Survey reports Chief Legal Officers’ increased satisfaction with outside counsel for the first time in six years.
“For the first time since the Survey’s inception in 2000, we’ve seen a marked decrease in the number of CLOs who are dissatisfied with one or more of their outside law firms,” notes Altman Weil principal Dan DiLucchio. “And the tactics firms are using to improve their performance are simple – listening to client concerns, providing more and better progress reports, and learning about their client’s business.”
Outside Counsel Relationships
Just 48% of CLOs report that they have fired or are considering firing one of their outside law firms in 2005. This is down 18% from 2004 and below 50% for the first time since the Survey was launched in 2000. The reasons given by those unhappy with outside counsel were lack of responsiveness, followed by mishandling a critical matter, cost management issues, and poor quality legal work.
When asked what steps outside counsel had taken to improve the working relationship with the law department, the top response was improved communication. Learning about the client’s business and cost / pricing considerations were tied for second. Other relationship building efforts named were offering training to in-house lawyers, developing personal relationships through outside activities and seeking formal feedback from clients.
CLO Priorities for 2006 and Beyond
Chief Legal Officers were asked to select the top three areas in which they expected to spend the greatest amount of their time in the next 12 to 18 months. Transactional work scored highest, with 51% of CLOs identifying it as their number one priority, followed by departmental management, ranked first by 46% of respondents. Additional areas in rank order were compliance, Board relations, outside counsel management and litigation.
When asked about long-term concerns over the next 3-5 years, Chief Legal Officers identified compliance as their number one concern, with electronic discovery and records management a close second. Other concerns voiced by respondents were for adequate resources to manage their departments, including time, money and staff.
Concerns for Personal Liability
The Survey reports that 35% of CLOs are ‘more concerned than ever’ about personal liability for corporate misconduct, with an additional 63% stating they are ‘just as concerned as always.’ 38% of respondents have changed their behavior based on their concerns, putting greater emphasis on documentation and record-keeping, E&O and D&O insurance, and training of corporate executives and staff.
Threats to Attorney-Client Relationship
When asked which prosecutorial tactics most affects the attorney-client relationship, 65% of Chief Legal Officers named ‘waiver of privilege.’ The second most frequent response was ‘in-house counsel being called as a fact witness,’ followed by ‘CLO as target defendant’ and ‘CEO or Board member as a target defendant’ tied for third.
Law Department Hiring
The Survey reports in-house hiring should be slightly lower in the coming year. 35% of Chief Legal Officers anticipate hiring new in-house lawyers in the next 12 months, compared to 37% in 2004. Regarding overall use of outside counsel in the same time period, plans to decrease use slightly outpace planned increases, 20% to 16%.
About the Association of Corporate Counsel, Altman Weil
The Association of Corporate Counsel (ACC) is the in-house bar associationSM serving the professional needs of attorneys who practice in the legal departments of corporations and other private sector organizations worldwide. Since its founding in 1982, the association has grown to more than 18,500 members in over 50 countries who represent 8,000 corporations.
Founded in 1970, Altman Weil, Inc. provides management consulting services to law firms, corporate and government law departments and legal vendors throughout North America, Latin America, the U.K. and Europe. Altman Weil is also known for the many legal economic and management surveys it conducts and publishes, including the Law Department Compensation Benchmarking Survey published in association with ACC.
Complete results of the 2005 Chief Legal Officer Survey, based on 89 responses received at ACC’s Annual Meeting in Washington, DC in October 2005, are available online at www.acca.com/Surveys/clo2005.pdf and www.altmanweil.com/CLO2005. For more information about the Association of Corporate Counsel go to www.acca.com. For more information about Altman Weil, Inc. visit www.altmanweil.com.
Contact Information
Daniel J. DiLucchio, Jr.
Altman Weil, Inc.
610.886.2000
djdilucchio@altmanweil.com
David Barre
Association of Corporate Counsel
202.293.4103, x 354
barre@acca.com
Download a copy of the survey results: www.altmanweil.com/CLO2005
