Last week I kicked a series about a favorite topic of mine: how law firm partners and their clients negotiate about fees.  The short answer is that many do so rather poorly, and I laid out some of my diagnosis in the first post. Today, I want to dig into a rather easy one to remedy, the lack of effective preparation.

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A lot has been written about the death of the billable hour and the rise of new alternative billing arrangements (AFAs), with a recent survey reporting that 95% of all firms, and 100% of firms with over 250 lawyers, are using AFAs in some way, shape or form.  But the percentage of revenue accounted for by AFAs remains low and two-thirds of the firms using AFAs acknowledge that they are doing so only reactively.  And when they were not talking with clients about AFAs, many large firms have instead been offering clients discounts on their hourly rates, often substantial ones.

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A common theme arose out of a series of meetings I’ve had recently with senior management at a number of large law firms: should firms develop a central strategy or policy about legal process outsourcing (LPO) or should they just “let a thousand flowers bloom”?  The question itself implies a trade-off between the analysis and consistency that can be put behind a firm-wide policy and the value of discovery (and perhaps buy-in) that can be gained through more grassroots experimentation.  The short answer is that either approach can work, with some caveats.

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I was recently asked by a savvy industry analyst why it is that law departments so often resist offers of “assistance” from procurement groups.  In a time when law departments are under pressure to do something to bring their spend under control, why do so many general counsel “go it alone” instead of leveraging the tools and expertise of their procurement colleagues?  I’ve posted about the potential for collaboration between the law department and procurement here, and here, and here, but today I want to dig into the causes for the resistance, and what procurement might do about it

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