The general counsel of legal research company LexisNexis Group offered his predictions for the industry’s future at a Stanford University event Wednesday.
Ian McDougall, LexisNexis’ general counsel and executive vice president, led the ”2008-2018: Decade of Disruption?” discussion, which was hosted by CodeX: the Stanford Center for Legal Informatics in Palo Alto, California. He began by walking attendees through mid-2000s legal industry trends he claims were exacerbated by the 2008 financial crisis: in-house hiring and tech use.
“Why were companies jumping on the rise of the in-house counsel bandwagon? Because the global financial crisis required companies to be more cost conscious than ever before,” McDougall said. “The advantage to a company of the in-house counsel is certainty of cost.”
The recession didn’t just accelerate an exodus in-house, McDougall said. It’s also led to a stronger focus on value, or quality over quantity, when it comes to hiring outside counsel. He noted more companies have adopted a panel model of firms and alternative fee arrangements in recent years.
That’s because alternative fee arrangements and structured relationships with firms provide more cost certainty—something crucial to general counsel sticking to a tight budget.
“I have conversations with law firms very often … and I’m sure they don’t believe me when I say to them that we are after quality and not necessarily the cheapest one,” McDougall said. “We’re after value for money. And one of the biggest elements of that is predictability. Can you give me a predictable cost?”
An increased focus on efficiency and value has also led in-house counsel to tap into advancing legal tech, according to McDougall. General counsel don’t want to pay outside counsel high rates for a job that could be done by a computer.
That doesn’t mean firms are going away. But he predicts firm lawyers’ relationship with in-house counsel, and the value they provide clients, will change. He said outside counsel will no longer “regurgitate law” to clients. Instead, they’ll walk them through an unfamiliar process.
They’ll also provide a deep understanding of legal technology, McDougall predicted, as will in-house counsel to internal clients. Lawyers adopting and embracing a new era of legal tech are the ones “who are going to survive” changes in the industry, he warned.
“Companies of all kinds have to have a clear strategy, in my view, to deal with the technological changes,” McDougall said.