According the 2009 Chief Legal Officer Survey conducted by Altman Weil, Inc. [summary, PDF], there is deep skepticism among corporate law departments that their law firm counterparts are equally serious about change. When asked how serious law firms are about changing their delivery model, the answers were in sharp contrast. Only 5% of CLOs assessed law firms as highly serious. 20% gave firms credit for some level of effort. 75% rated law firms between zero and 4 on the scale, indicating little or no interest in change.
“This is a dramatic vote of no confidence from Chief Legal Officers,” observes Altman Weil principal Dan DiLucchio:
Either many law firms just don’t understand that clients today expect greater value and predictability in staffing and pricing legal work, or firms are failing to adequately communicate their understanding and willingness to make real change. In either case, it’s a big problem.
Other interesting results from the survey indicated that 27% of corporate law departments have also reduced their in-house lawyer staff so far in 2009, and another 9% consider it “likely” or “possible” that they will do so in the remainder of the year. Law departments also report making cuts to the ranks of contract lawyers (15% of departments have done so), paralegals (21%), and support staff (26%). ”This combination of inside and outside reductions means not only that in-house lawyers will assume greater workloads, but also that Chief Legal Officers will need to become more strategic about triaging work, allocating resources, and, in some cases, tolerating higher levels of risk,” says DiLucchio. “And when they do hire outside counsel, you can bet that they will be shopping for value.”
Whether you are [currently] a believer or not, LPO addresses many of the issues underlying the Altman Weil survey. CLOs are clearly looking for ways in which to deliver quality service to their internal clients. Law firms obviously play an important role in assisting CLOs with that goal. However, for the foreseeable future it is unlikely that law firms are going to radically change their delivery model (at least from what we in the LPO industry see). So where does that leave CLOs? One possible answer to that question has to be – put LPO to the test – the results are likely to set new standards for CLOs – at least in so far as routine, repetitive legal work is concerned. Do not assume however that LPO implies a compromise. On the contrary, LPO does not compromise the quality of the work and offers advantages on cost and productivity.