Fourteen reasons, ranked by legitimacy, why a law departments doesn’t bring the hammer down on its law firms
As I came up with this list, it seemed useful to put them in declining order of legitimacy. In other words, the first few make sense, toward the end they make poor excuses.
- The lawyers like the services they get from the firms and feel the value delivered for the cost paid is acceptable.
- No one is pressuring them sufficiently from within the corporation to chop costs.
- They adhere to the belief that quality and outcomes matter more than cost.
- Within the recent past they took strong or progressive cost-cutting steps and feel no need now to revisit them.
- They feel they have instituted reasonable controls on fees and further efforts are either not worth the effort or, worse, will prove counter-productive.
- They doubt that the chimera of reductions dangled by proponents of various methods will be realized.
- Institutional familiarity of the firm with the client developed over the years counts for more than nickel-shaving.
- Much of the department’s spend goes to specialized partners who don’t face many unconflicted competitors.
- They haven’t heard of some successful techniques to tamp down outside counsel costs.
- They charge back nearly all their outside counsel costs to business units or staff functions, who have not complained.
- Top executives or board members favor certain firms and block the law department from taking measures.
- The legal spend they command is not large enough to wield much influence over law firms.
- Key law firms have steadily resisted efforts to reduce their costs of services.
- Foot-dragging and passive-aggressive behavior have stymied efforts in the department to reduce outside counsel costs.