Canadian Lawyer InHouse

Litigation What are the areas of practice you contract out to firms the most? 47.3% Intellectual property 33.5% Regulatory matters 32.6% Tax 30.1% Real estate 26.8% Class action 15.5% U.S.-cross border 14.2% Class action 13.8% Environmental 10% Privacy legislation 9.6% Risk mitigation 5.9% Advertising/marketing 5% Other 13% Employment/labour Is the volume of legal work carried out by your department and external counsel combined likely to grow? Yes 60.1% No 12.6% Stay the same 27.4% Yes 59% No 41% How many firms received the top 80 per cent of your Canadian legal department's legal spend? Are you likely to implement new arrangements to get more value from the firms you deal with? 46.8% Three to five 45.4% Six to 10 5.9% 11 to 15 0.5% more than 15 1.5% One or two www.ca na dia nl awy e r m a g . c o m / i n h o u s e 82.4% hour I'm basically paying the same price. So I look at the total bill as a measure of efficiency because I have it in my own mind what something should cost," he says. He also takes into consideration non-financial factors such as chemistry (does he like working with them?), quality of work, and responsiveness. "Responsiveness is very important — does she return my calls immediately? Do I get work done in a timely manner? All those things factor into the billing analysis." If embarking on a large project, Trumper sends out an RFP to a pre-selected group of firms and in that context he usually asks for billing proposals. "Typically what I get back is some sort of fee reduction based on volume of work. For example, if our billings are over X, they will cut the bill by 10 per cent." Some respondents to the survey indicated they are trying to get away from the billable hour: "We have a variety of arrangements with our primary firms, some of these are derived from RFPs for particular work, others are long-term arrangements with flat or alternative fees. Billable hours are our last alternative," said one. Trumper also uses a roster of lawyers for the company's regular stream of municipal and planning work. "I'll do an RFP and send it to all the planning firms and from that process I will have four or five firms on my municipal and planning law roster. So every time an issue comes up I don't have to RFP it; I'll simply go to the next person on the roster and give the file to them directly," he says. focus oN value Grant Borbridge, vice president of legal and general counsel with MEG Energy Corp. in Calgary, says for in-house counsel the focus should really be on finding value and getting the project done effectively. "My guess is 10 years from now we'll still be discussing the fact a certain percentage of projects are still being run on the billable hour," he says. "There are two sides to this: there's very little proof that flat-rate billing on projects is actually to the benefit of the client. Presumably the law firm doesn't necessarily want to hand over a lower revenue base as a result of changing to a different billing method, and the same would go for other alternative arrangements," he says. In terms of work growth, 60.1 per cent of participants said the volume of legal work carried out by their department and external december 2013/january 2014 • 35

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