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Executives Rank Law Firms on Service and 'Arrogance'

Eric I. Cohen was disturbed by the numbers he was seeing.

The senior vice president and general counsel for the Terex Corp., based in Westport, Conn., recalls facing the prospect of a "large bill" from outside counsel who were handling a matter requiring the production of scores of written documents.

Unhappy with the quoted price, Cohen floated the idea of outsourcing part of the job to lawyers in India. That, he said, would reduce legal fees from a couple hundred dollars an hour for lawyers in the United States to less than $30 per hour. The outside counsel firm, which Cohen would not name, responded by dropping its hourly charge to the mid-$30 range.

Terex Corp., which makes backhoes, mining trucks and other large pieces of construction equipment, is hardly the only big company to have issues with its outside counsel. More and more, American corporations are dissatisfied with their law firms. Citing spiraling costs, poor communication, lack of urgency on important matters and general arrogance, just 32 percent of executives responding to a recent survey said they liked their outside counsel enough to recommend the firm to someone else.

"Overall client satisfaction is very low," said Michael Rynowecer, president of The BTI Consulting Group Inc., which is based in Boston and released its sixth annual survey in 2006. "By focusing on who does well, you learn what can be done to improve that."

CLIENT SERVICE A-TEAMS

Rynowecer's team interviewed more than 250 corporate counsels and top executives at large U.S. companies to learn what they think of their outside law firms. In addition to collecting a litany of complaints, BTI identified a "Client Service A-Team" of 30 firms that rate highly with their customers.

Ropes & Gray, a national firm with a large Boston office, made the list at number 12, rising 16 places from last year. Ropes is one of a handful of firms that have been on the list for at least four of the past six years.

"Certainly, we're pleased that the BTI survey, an independent report, echoes what we frequently hear about the quality of our client services," said Bradford R. Malt, the firm's chairman, in a written statement. "I'm happy to let those results speak for themselves."

To receive a positive mention in the survey, a law firm had to get "unprompted, explicit recognition from clients." No Connecticut firm made the cut.

Law firm management consultant Peter Zeughauser, of the Zeughauser Group, said the BTI survey is no substitute for a law firm's own client survey. Still, he said, it is "well-regarded" by many firms. "I think they use it as one broad way of how they're perceived in the marketplace," he said. "They also use it as point data in strategic planning."

To be sure, the perception of outside counsel has been generally unfavorable in recent years. The overall satisfaction rate on the BTI survey topped 43 percent as recently as 2005. As the rate dipped toward 30 percent the past two years, corporations are doing more than complaining. About half the companies surveyed by BTI in recent years either reported firing one of their outside counsel or announced plans to try a new firm.

"I don't continue to work with outside counsel if it's not a good fit," said Susan L. Kantrowitz, vice president and general counsel of the Boston-based public television station WGBH. While WGBH has maintained strong relationships with three law firms for its entire 26-year history, Kantrowitz also has terminated relationships with a number of other firms, she said, declining to name names.

Other companies, like Terex Corp. in Westport, want their outside counsel to do a better job controlling legal costs. Cohen, the general counsel, blames part of the jump on the higher salaries that law firms are paying their first-year associates.

When corporations say they are dissatisfied with their outside counsel, it usually means "they think they're getting taken for a ride with the costs," said Cohen, who negotiated discounts with the law firms his company uses by asking them to use lower-cost lawyers in the Midwest for document preparation rather than higher-priced New York City-based associates.

BTI also compiled a list of the "most arrogant" law firms. Arrogance was defined, in part, by high fees, a refusal to take on work and poor experience in certain matters. Ropes & Gray was among those to receive votes for the "most arrogant" list. Malt, the Ropes chairman, had no comment on that assessment.

In another question, BTI found that just 25 percent of the corporations surveyed said their primary outside counsel excelled in client service.

"Many corporate counsel will tell you that their law firms will do what they're asked, and nothing more," said Rynowecer, BTI's president. The corporations feel that the law firms "don't try to understand their needs, and that they're not proactive enough."

Still, just like any long marriage, the relationship between a corporation and its outside counsel often survives such peaks and valleys. Corporations with longstanding relationships with law firms frequently stick with their legal partners despite dissatisfaction in a particular matter, said Richard Heller, senior vice president and general counsel of Legal Sea Foods in Boston.

"Sometimes, I've been unhappy with the way they've done things or the way they spend money, but because the [overall] work is good, you have to choose your battles," Heller said.

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