Based on 165 responses to their survey this fall, Altman Weil and LexisNexis Martindale-Hubble produced data on ten criteria those law departments apply when they evaluate their outside counsel. From the 2006 Law Department Metrics Benchmarking Survey (at pg. 230) the five most important evaluative criteria are reported as “results” (25%), “knowledge/expertise” (20%), “responsiveness” and “cost” (both at 15%), and “understands business” (13%).
Another five criteria are judged much less important than the primary five: “creativity” (6%), “diversity” and “partnering capabilities” (both 2%), “technology” (1%) and “other” (less than 1%).
Because the percentages add to 100, it appears that the question asked the departments to rank the ten criteria. That only a quarter of the companies ranked results most important may be because sometimes the outside law firm is not asked to achieve a result. An opinion or a draft of an acquisition agreement, where the deal craters, produces no result in the same way that a resolved law suit does. “Responsiveness” is not always a desideratum if that term really means timeliness; outside counsel, after all, can’t move faster than the client. “Understands business” has multiple meanings. It could mean to some respondents the degree to which outside counsel understand how the client makes money. Or it could mean how well outside counsel understands what positions the client would take.
How well the firm aligns with the goals of the in-house group – which might be a translation of “partnering capabilities” – is quite soft and does not get much respect. Once again, diversity gets the short stick and the pride and joy of some law firms – their technology – doesn’t move the needle.