The most widely read magazine for Canadian lawyers
Issue link: https://digital.canadianlawyermag.com/i/1183528
www.canadianlawyermag.com 41 HOW DO YOU CHOOSE YOUR EXTERNAL LAW FIRMS? Historical relationships (i.e., generally loyal to our existing firms/lawyers) 66.42% Specific lawyer(s) 59.85% Industry/practice area expertise 52.55% Technical expertise 37.23% Law firm reputation 34.31% Other 8.03% Third-party legal rankings/recognition 2.19% WITH YOUR PRIMARY LAW FIRM/EXTERNAL SERVICE PROVIDER, WHAT TYPE OF BILLING ARRANGEMENT DO YOU USE MOST OFTEN? Billable hours 70.07% Combination of billable hours and alternative fee arrange- ments (AFAs) 23.36% Flat fees 3.65% AFAs 2.92% IF YOU USE ALTERNATIVE FEE ARRANGEMENTS, WHAT PERCENTAGE OF THE NON-COMMODITY WORK YOU SEND OUT FALLS UNDER AN AFA? 0% to 25% 26% to 50% 51% to 75% More than 75% 75.61% 17.07% 4.88% 2.44% DO YOU ASK THE LAW FIRMS YOU DO BUSINESS WITH TO PROVIDE A DIVERSE ROSTER OF LAWYERS TO WORK WITH AS PART OF AN OVERALL DIVERSITY STRATEGY IN YOUR ORGANIZATION? No Yes We're thinking about it 67.88% 16.79% 15.33% DO YOU USE: National firms 83.21% Boutique firms (IP, employment law, tax) 75.91% Regional firms 69.34% International firms 36.50% Alternative firms 8.03% LPOs 0% department is to understand her business. "The two probably go hand in hand," she says. "I don't want to waste money on explaining my business over and over. If you understand my business and you're thinking proactively, not just about the issue I'm asking you to address but also the issue that will come next, then, for me, it's worth the money." Nguyen agrees that firms should always be thinking about ways to improve the relation- ship with in-house clients and to deliver the best value, which will not always be cost related. Although billable hours are the most popular type of billing arrangement that law departments have with their primary firm or external service provider, with a 70.07-per-cent majority, most respondents would consider alternative fee arrangements, with 66.42 per cent expressing an interest in using them. Currently, only 2.92 per cent of respondents use AFAs as their primary type of billing arrangement, with "discount" being the most popular type. According to O'Reilly, AFAs are necessary to ensure that value is shown to the business, and they may help to avoid the suggestion that legal is an expen- sive overhead as opposed to a cost-effective solution provider. For his part, Nguyen says: "I don't think there is sufficient education as to the different types of fee arrangements that are available. There should be internal education within firms about the different types of fee arrangements that can be made available to their clients." While 62.04 per cent said the general counsel/legal department has the autonomy to select law firms, 28.47 per cent say it is a shared decision with executive management. "I have the autonomy to select which law firms to work with, but it's not surprising that not all GCs do," says Demone. "I assume there 54.93% More value The same value Less value 42.25% 2.82% IF USING AFAS, DO YOU FEEL YOU ARE RECEIVING: