The December 2011 issue of The American Lawyer features the latest edition of its Law Firm Leaders Survey. The lead essay of the survey package, “Building a Breakout Firm,” includes many results of interest to in-house law departments—and the outside law firms hoping to be hired by those departments.
Starting with the notion that, for U.S. law firms, “never has it been harder—or more crucial—to break out of the pack,” AmLaw‘s Alan Cohen writes that the sluggish and uncertain economy continues to impact firms: “Nearly a third (29 percent) of respondents said they expect their once-bustling corporate practices to be their most challenged practice group next year.”
The article notes that many outside firms are taking steps to attract corporate work by “deploying long-term efforts, such as embracing project management, strengthening client relationships, and developing new ways to bill and staff matters. Already, say firm leaders. . . these moves are starting to pay off, albeit gradually.”
Cohen also cites “a combination of alternative billing arrangements and improved efficiency” as one of the key ways these firms are working to attract more business:
Alternative fee arrangements are increasingly seen as a way to customize billing models to fit client needs. More than 92 percent of respondents said that they used flat fees for at least one entire matter in 2011 (the same percentage used them for some stages of a matter); 82 percent used collars or caps. While these figures were nearly identical to last year’s, the survey found evidence that the structural barriers to more widespread use of AFAs are falling. Last year, 88 percent of respondents said law firms and clients had insufficient experience defining or managing work on an alternative basis. This year, 73 percent think that’s true. In the 2010 survey, 53 percent said it was difficult to determine the value of the work. This year, just 45 percent agree with that statement.
The quest for increased efficiency includes a look at “nontraditional staffing models.” Cohen writes, “Particularly popular is the use of contract attorneys working at the firm or within the client’s legal department. Seventy-six percent of respondents said they used this approach during the past year, up from 55 percent in 2010.”
Firms who want to get more business from law departments are also being proactive about getting people onboard who will be attractive to general counsel. Hiring partners are seeking new hires with specific corporate expertise, and so “to jump-start struggling corporate practices, 74 percent of respondents said they plan to hire lateral partners in that area next year.”
The full AmLaw essay can be found here, and a PDF download of key survey results is here.
