Published on:

If buyers now hold sway, it is not just because of corporate client cost pressures

A piece in the NYSBA J., Sept. 2010 at 28, by Silvia Hodges, includes the ubiquitous sentence: “Ever-increasing cost pressure in companies has shifted the power from the law firms to the clients.” Wait a minute.

What about management skills increasing among in-house lawyers? What about greater transparency in data on external counsel spend? What about greater sophistication in the tools for selecting and supervising outside counsel and a less docile, colonized state of mind? What about a shift in the view of what the role of the law department is and how it should function? What about incursions by the sourcing function of companies? All these are reasons other than cost pressure for changes in the relationship between buyers and sellers of legal services.

If clients wield more purchasing clout now, itself a debatable proposition, it may flow from the barrel of more knowledge and skills, not simply a ham-fisted demand for fewer dollars in fees.

Now, to close, reflect on whether the balance of power has even shifted. Law firms aren’t closing up shop, impoverished. Partners are doing very well, thank you.

My sense is that most legal departments feel beholden to the key firms that serve them and do not want to come down on them with a heavy hand. The lawyers joined in the fray with a firm’s lawyers do not want to exert the power their company ostensibly has as a buyer. They want good work on their matters and are more than willing to spend corporate money and pay a fair price.