GCs Share Data on Law Firms to Spur Innovation

General counsel from 25 major companies are sharing data about their law firms, including billing rates, practice areas, and other business information.

The companies include Mastercard, Panasonic, Paypal, and others across the corporate spectrum. They are looking for more efficient legal services, and sending a message to outside counsel that times are changing.

Corporate clients have increasingly kept more matters in-house and outsourced work to legal service providers in recent years, and now they want to communicate about the changes. In their open letter, the general counsel said the industry has "struggled to innovate."

Struggle to Innovate

"In our view, one reason the industry has struggled to innovate is that we don't know which in-house and law firm management approaches work best," the attorneys wrote. By sharing data, they hope to address questions such as:

• Do preferred providers achieve the results we're seeking?
• Do flat fee arrangements impact service quality or the level of talent assigned to the work?
• Do firms that charge the most deliver better service and expertise?
• Does the trend toward legal project management deliver better efficiency and results?

The companies are working with AdvanceLaw to collect the data and analyze it for best in-house practices in areas such as value billing and competitive bidding. The project is already underway, with data representing thousands of matters.

"As the results come in, a number of general counsel from our group will author articles offering thoughts on these findings, including practical implications for both clients and law firms," the open letter said.

Sensitive Information

Outside counsel, particularly at BigLaw, are anxiously waiting for the results. Like trying on new shoes, they are usually a little uncomfortable until they are broken in.

David Rueff, a partner and legal project management officer at Baker, Donelson, Bearman, Caldwell & Berkowitz, said the data could reveal some sensitive information about law firms. It could be "an unveiling" of how staffing and pricing can differ from matter-to-matter, he told the American Lawyer.

"This is going to reveal a lot of inconsistencies in the way lawyers move from one client to the next," Rueff said. "So I think it's a wake-up call for all of us. It's the next phase in a dramatically changing market."

Related Resources:

• Insourcing v. Outsourcing: The Dance of Legal Work (FindLaw's In House)
• Controlling Outside Counsel: Micromanage or Hands Off? (FindLaw's In House)
• Should You Ever Sign Agreements Over Drinks? (FindLaw's In House)