Why am I so sympathetic to partners now? Well, I feel sorry for them because they have to work with clients who seem, at times, abusive or wishy-washy. The power dynamics have changed, and clients aren't treating outside counsel with much respect anymore. Clients tease them with the possibility of business, while ultimately treating them like doormats, to be used and discarded.
Two trends are contributing to this phenomenon: the proliferation of requests for proposal and alternative fee arrangements.
Corporate Counsel magazine reports that 42 percent of law firms have seen an uptick in RFPs from companies this year, according to a recent survey by LexisNexis. Okay, nothing wrong with that, but it's a big time-drain, which certainly doesn't help efficiency.
Worse, though, says Susan Hackett, CEO and chief legal officer at Legal Executive Leadership, is that some law departments are using RFP unfairly:
to solicit proposals from firms when they were taking on a matter in
which they lacked expertise, she says, but Hackett now often sees
departments using the process to keep their existing firms from becoming
“They’re pushing their existing firms to compete against each other,” she notes, “and they’re shopping for ideas” from other firms. While a firm may not have a “snowball’s chance in hell” of winning a bid, she says, it has no choice but to respond to the proposal.
And then there's the rise of alternative fee arrangements. Few lawyers (at companies or law firms) like them, though everyone seem to embrace their inevitability. Reports CC about a recent survey of law departments and law firms by LexisNexis CounselLink:
The study shows that the use of AFAs has been slowly rising while the billable hour has been slowly shrinking since the economic collapse of 2008. But only 26 percent of legal department respondents and 11 percent of law firms said they were "very satisfied" with the alternatives.
There was a lot of discussion in the CC article about whether firms and in-house departments know how to properly use the data about AFAs. There's an underlying assumption that AFAs will save everyone money and make legal work more efficient if we understand them better—though the proof still seems sketchy at this point.
So my takeaway is this: Clients will demand more RFPs and AFAs though no one seems all that certain about how they make the process better. In the meantime, expect a lot of consultants to dive in to help everyone to sort it all out.
Maybe we should all go into consulting.
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