Sixteen initiatives to save costs on external counsel ranked by effectiveness

The Second Annual Law Department Operations Survey at 9 lists 16 initiatives that respondents, all administrators in large US legal departments, ranked by effectiveness. At the top, selected by seven out of ten of the operations managers who took part, is “Use less expensive attorneys (i.e., regional firms)”

Six of the sixteen techniques lean on the lever of billing rates: “Aggressive rate negotiations” (65% chose it), “Flat fee arrangements (55%), “Limit when rates can increase” (54%), “Volume discounts” (40%), “Cap rate increases” (40%), and “Discount rate with bonus for success” (24%).

Implicitly, these operations managers accept the billable hour as the dominate mode of valuing legal services so they want lower rates. They can rollback standard rates based simply on negotiating muscle or they can tamp down the rate of increase or they can escape hourly billing altogether. In fact, the top method in essence looks for law firms that are capable and that offer lower hourly rates. Show me the money, and reduce it!

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