Different views on cost efforts of law firms, but methodological imperfections galore

For its latest survey of in-house counsel and law firms, Inside Counsel, July 2007 at 58, reports that 862 in-house counsel responded, of which 40 percent were general counsel. Many respondents were with large departments as the median department had 39 lawyers. About one sixth as many lawyers in private practice responded (135), of which 77 percent were partners.

The survey contained the statement “Law firms are actively seeking out ways to reduce the costs of the legal services they provide” and asked respondents to “agree,” “disagree,” or choose “neutral.” In-house, 11 percent agreed; outside, 56 percent agreed. Those who chose “disagree” split 70 percent inside, 24 percent outside. Last year, the results were 13 percent agree, 65 percent disagree (See my post of July 16, 2006 on this question.).

Not much can be gleaned from these results because of five inadequacies of the question:

(1) Law firms may be paring their costs right and left, but the question leaves open the possibility that they are not passing on the cost savings to their clients (See my post of Dec. 19, 2006 on flat fees for online research costs; Sept. 3, 2005 to the same point; and June 15, 2005 about offshoring and the ethics of passing on cost savings.).

(2) The question is ambiguous to the degree that “costs” are different than “amounts billed.”

(3) The use of the present participle (“are actively seeking out”) introduces the uncertainty of an interpretation that firms are at this moment trying hard to reduce costs, but the reductions have not yet been realized.

(4) The question did not ask about “the law firms serving you” but rather about all law firms. Some law departments might believe that the firms they have retained have diligently kept costs and prices down, while all around them are lazy, profligate and greedy law firms.

(5) Is “neutral” the response of people who have no view on this issue or people who believe the situation is too close or too complicated to choose a binary yes or no?

In the end, if there is an end that is reliable, the percentage of those that agreed to some construal of the statement dropped from 13 to 11, or somewhat more than 10 percent.

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