Canadian Lawyer InHouse

42 www.canadianlawyermag.com/inhouse appropriately for them. "We don't have an in-house litigator, so when there is a lot of litigation, it goes externally, and when there isn't, we save that cost," she says. External legal spend is on the rise, with 35.56 per cent of respondents saying it increased this year, compared to the prior year. In line with last year's survey, 24.09 per cent spent $101,000 to $500,000 on legal matters, but the number that spent between $1 million and $3 million has risen to 21.90 from 13.21 per cent in the past year. The fact that concern for costs was ranked as the most important thing that firms can do to improve relationships with legal depart- ments is no surprise. "Understanding the need for cost control is incredibly important. It's business survival," says O'Reilly, citing the example of the continuous downturn that Alberta has seen in the energy busi- ness, which has resulted in so many businesses being constrained by cost. Demone says that, while being upfront with cost is important, the most significant thing that firms can do to improve relation- ships with her department is to understand IN WHAT SECTOR IS YOUR COMPANY/ORGANIZATION? 15.33% Government (municipal, regional, provincial, federal and First Nations – including boards and tribunals) 9.49% Professional services 21.90% Financial 11.68% Industry/manufacturing (including life sciences, food production and automotive) 11.68% Natural resources based (including energy) 3.65% Service and/or retail 8.03% Technology 6.57% Non-profit or academic institutions 11.68% Other HOW MANY LAWYERS ARE THERE IN YOUR LEGAL DEPARTMENT? 35 30 25 20 15 10 5 0 2 to 5 6 to 15 1 16 to 30 51 to 100 More than 100 31 to 50 33.58% 23.36% 22.63% 8.03% 5.84% 4.38% 2.19% 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% CORPORATE COUNSEL SURVEY 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 relationship 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

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