If You Are Like These Global Legal Departments, You Value Referrals, Being Understood, and Fair Billing Practices

If You Are Like These Global Legal Departments, You Value Referrals, Being Understood, and Fair Billing Practices

While the practice of law is more global than ever and everything about law seems to be changing, those of you who like some things to remain the same in this world will like the findings of two recent surveys of international in-house legal departments.

What are your peers around the world saying?

The survey of legal departments in Western Europe re-confirms that the best thing attorneys can do to win you over is understand not just your legal needs, but your company’s business needs. That’s not different from what U.S. companies say, right?

If you have not yet used Facebook to replace all of your personal human interactions, you will like the result of the more global survey. When looking for an attorney outside their home country, this survey says most in-house counsel ask someone they know first, including their local counsel. Where do they turn next? The survey says: Other in-house counsel or existing outside counsel with offices in foreign jurisdictions.

Then Why Tweet?

Of course this begs the question: how much do activities like blogging, tweeting, speaking and publishing — and just getting some good press — mean to attorneys when referring other attorneys to in-house counsel. A question for another survey perhaps, but anyone who sees how often law firms are running their own Webinars, posting web articles, blogging, tweeting and issuing white papers has to think law firms are finding “being out there” effective. Certainly, like any good marketing, it is all about tracking effectiveness. Since many law firms are not waiting for traditional publishers and conference companies to feature them, they must be getting results.

In studying law firm and client relationships in Western Europe, LexisNexis® Martindale-Hubble®, in association with London-based Global Legal Post, concluded that a law firm’s understanding of a company’s business needs, objectives and culture continue to be critical in the initial selection process, and that it is the “quality of the team overall” that companies consider when continuing a relationship with a firm.

Titled “The Selection and Retention of Law Firms in Western Europe,” the report says understanding the client’s business needs was ranked as “very important” by 72% of those polled. “Speedy response times, client service and communication skills and expertise and reputation of the individual lawyer are regarded as the next group of favored attributes” in picking a firm, the report says. “Interestingly, cost is not a key factor in initial selection processes.” What? How can cost not be a factor? Well, of course it does — but later. Western European legal departments said cost plays a role in retention and is considered one of the biggest overall challenges they face.

Magic Ingredients

What are your peers in Western Europe saying about why they stay with a firm? “Common ‘magic ingredients’ of relationships are dedication and chemistry, alongside expertise, quality of ability/competence and cost/fees,” the report says. “Proficiency in business and legal skills alone are only part of the picture. The ‘people buy people’ adage is borne out in the results, with over one in four companies prioritizing this factor on their list of requirements, whilst one in two want a trusted advisor.”

“These trends in selection and retention factors are consistent with similar surveys that we have undertaken in other world regions,” Derek Benton, director of International Operations at Martindale-Hubbell commented.

“From a business development perspective, the message is simple,” Benton said. “To get noticed in the identification and selection stages – whether communicating via their own or third-party website, blogs, articles, social media or tender documents — firms need to engage buyers by firstly showing that they understand their sector and how that impacts their day-to-day business.”

CLO Approval

If you are at the top of your in-house team, you already know this, but firms want a relationship with you. It’s not different in Western Europe. More than two-thirds of respondents say Chief Legal Officers have final say in approving law firm appointments. Procurement departments are rarely involved. Only one in 20 companies surveyed say they play a role in firm assignments.

Getting on outside counsel panels seems to be a key objective for many law firms, but 72% of the companies polled in Western Europe say they do not use law firm panels. If legal departments do not pick a firm to be on a panel, that is not the end of all hope for that firm. Legal departments there review panel firms every couple of years.

What reasons do these legal departments give for repeat assignments for firms? “Respondents cite the quality of the team as a whole (80%), followed by their knowledge of the business (76%) and cost/approach to billing (71%),” the survey revealed.

There’s the Door

Of course, “overall standard of service” is critical, and poor service is the nearest exit off a company’s preferred list. After that, “unfair or unclear billing” can lead to a breakup. Achieving better value for money remains the Holy Grail for long-term attorney-client relationships.

Nevertheless, most law firms are seen as being sensitive to the budgetary pressures of legal departments (60%) and offer value-added services, with free training topping the list.

The biggest challenges facing in-house lawyers in the next year? Again, you already know: cost control, (62%), increased workload (52%) and litigation/risk managements (44%). Twenty percent of companies polled plan to decrease legal budgets, but about the same percentage, 22%, expect to spend more.

To download a free copy of the report, visit http://bit.ly/JirRjR.

Growth of Global Legal Work Continues

In another survey, LexisNexis teamed up with Lex Mundi, a global network of independent law firms, in surveying global corporate counsel. The survey results reveal an increasing need for legal services in jurisdictions outside of the respondents’ home jurisdictions with three-quarters of the respondents reporting that they have ongoing international, cross-border legal matters.

What legal subjects top the list in foreign jurisdictions? The respondents say litigation or arbitration; intellectual property; trademarks and patents; corporate matters; mergers and acquisitions; joint ventures; and employment and labor issues. The survey also reveals that while companies have consolidated the number of law firms they use in their home countries, they are using more firms for international legal issues.

Looking ahead, respondents expect increases in the amount of work going to outside counsel in foreign countries than to national outside counsel. Twenty two percent expect to spend more in the next 12 months on international legal matters. Jurisdictions where respondents expect to have the greatest legal needs outside their home jurisdictions are the U.S., Brazil, Western Europe, China and Canada.

When seeking outside counsel in a country where they do not have an established relationship, most in-house counsel begin by asking someone they know for a referral, including their local law firm. This was followed by contacting another in-house lawyer and current counsel with international offices. When they have recurring work in another jurisdiction or country, 60% contact the same firm repeatedly.

To download a free copy of the LexisNexis/ Lex Mundi report titled “2011 Global Corporate Counsel Survey: Selecting Outside Counsel in Foreign Jurisdictions,” – visit http://www.lexmundi.com/ccsurvey2011.