About a Third of Legal Departments Hire Smaller, Cheaper Firms, Altman Weil Survey Says
The 19th Annual Chief Legal Officer Survey by Altman Weil Inc. on management, staffing and spending trends in law departments finds many law departments are negotiating discounts with larger firms or moving work to smaller firms and staffing up their own law departments.
November 12, 2018 at 02:06 PM
5 minute read
The original version of this story was published on Corporate Counsel
When legal departments are looking to hire outside law firms, cost is key, and bigger isn't always better, according to a new survey that shows roughly a third of chief legal officers are shifting outside legal work to smaller firms with lower rates.
This year, 31 percent of CLOs reported that they'd moved outside work to firms with lower billing rates while also noting that they are “successfully using smaller law firms that offer quality work and service at considerable reductions in cost,” according to Altman Weil Inc.'s 2018 Chief Legal Officer Survey. That finding is similar to last year's study, which showed that 33 percent of CLOs had shifted outside work to lower-priced firms.
“An overall sense is a lot of firms [legal departments] are feeling that they can't hammer down rates on the big firms. And they don't like contract lawyers, and they're not going to alternative service providers. So what do they do? Shift to lower-cost firms,” said Rees Morrison, a principal of Altman Weil who co-authored the study.
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