The Point “Corporate Legal”. For decades this phrase has referred to people who have been formally trained and experienced in only one discipline: law. And these people have had just one function: advice and representation on how statutes and regulations — and the courts and government agencies that apply them…
The Point From a November 28 report in American Lawyer Media / Law.com (subscription required): “‘Surprised, Angry, Dismayed’: Legal Departments Vow to Fight Law Firms’ Rate-Hike Plans … The in-house legal community is expressing outrage that law firms will be pressing for aggressive rate hikes in 2023, even though they…
The Point 1. If you don’t know the quality of what you’ve bought, no amount or kind of cost data can tell you if it’s money well spent. 2. The Thomson Reuters’ 2022 Legal Department Operations Index reported that 70% of corporate legal departments track total spending by law firm,…
The Point 1. For decades, corporate Legal has offered two responses to spiraling costs: (1) “Bring more work in-house” — substitute less expensive, generalist lawyers as full-time employees to whom you pay salary & benefits, for more expensive, specialist law firm attorneys who you pay by the hour, and (2)…
The Point 1. The corporate law function costs too much and takes too long. 2. Most corporate law functions knowingly accept material amounts of waste in two major forms: (1) Rather than fixed fees agreed between lawyer and client in advance of the work, most pay outside lawyers by the…
A final installment in this three-part post. What’s a practical basis for placing a value on attorneys’ work for the business? In Part 1 I addressed the legal profession’s prevailing measure of lawyers’ work: How long did the attorney decide to take doing the job? Cost-plus. Bill the client company…
In Part 1 I addressed the need for reliable numbers relating to the value of legal services. If what gets measured gets managed — and if measuring the wrong thing is worse than measuring nothing at all — then client company executives need a reliable measure of the value of…
“What gets measured gets managed.” This proverb, widely attributed to Peter Drucker, presents a tough question in the context of a company’s legal budget:Measure what, exactly?The cost-plus pricing method of the legal profession’s business model — charging the client company according to hours billed — offers the following answer:You should measure…
In Part 1 of this two-part post I wrote that the conventional business law firm does not compete on the terms of service — does not adhere to management disciplines — that best serve client companies: Know what the price will be before you agree to pay it. Don’t accept…
Competition creates the value that the customer gets. There’s no substitute for it. Take a look at this morning’s Wall Street Journal (subscription required): “Charles Schwab, Fidelity Escalate Brokerage Price War”. Featuring a picture’s-worth-a-thousand-words chart showing Schwab’s average commission per trade going from $12 in 2015 down to a little more than…