Putative metrics on cost control efforts, but numerous questions about their usefulness

Hildebrandt, a business within Thomson Reuters, shared some data on cost control strategies from its 2009 Law Department Survey. It laid out a slew of metrics, but it is hard to know how real they are or what a general counsel can rely on.

For example, “55% of the companies reporting indicated that they have implemented or will implement the use of alternative fee arrangements (non-hourly) with their outside counsel. 27% are considering alternative fee arrangements. Only 18% have no plans to use alternative fee arrangements.” The numbers are plentiful but what is the change in these percentages from pre-recession times? Does “use of” mean a significant implementation or a token? Have the law departments done something specifically in response to the slowdown or are these Brownian motion changes, normal fluctuations of interest. Can we rely on the subjective “will implement” as a dependable indicator?

The same questions apply to another set of metrics about rate freezes: “64% of the companies reporting indicated that they have implemented or will implement rate freezes with their outside counsel. 23% are considering rate freezes. Only 14% have no plans for rate freezes.” And there is a third set with the same frailties: “46% of the companies reporting indicated that they have implemented or will implement rate reductions with their outside counsel. 26% are considering rate reductions. 29% have no plans to negotiate rate reductions.”

For each set of triadic metrics, we would like to know to what degree the law departments have implemented them – a single instance, several, or widespread and meaningful adoption. We would like to know the number of law departments that have affirmatively taken action, not ones that have had a passing thought and think they might get around to it someday. As stated, the credibility of these metrics melts in the sunlight.

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