Canadian Lawyer InHouse

NOVEMBER/DECEMBER 2015 36 INHOUSE 46.8 % 31.0 % 12.7 % 6.3 % 1.9 % 1.3 % Billable hours Billable hours Billable hours Billable hours Billable hours Billable hours Billable hours Billable hours Combination of Combination of billable hours plus flat fees billable hours plus flat fees Alternative fee Alternative fee arrangements (AFAs) arrangements (AFAs) Flat fees Flat fees Other Other RFP process RFP process What type of billing arrangement do you have with your primary law firm/external service provider? lawyers (67.4 per cent), followed by industry/practice area ex- pertise (49 per cent), technical expertise (43.7 per cent), and law fi rm reputation (24.2 per cent). Some of the com- ments on this question indicated the fol- lowing were also important: "Their ability to deliver timely, relevant advice and their commitment to understanding my busi- ness," as well as, ". . . how well their values align with our corporate values and are they willing to be a strategic partner from a busi- ness and fee front." In-house are also showing their prefer- ence for using boutique law fi rms with 72.6 per cent saying they use smaller specialized fi rms in the area of IP, tax, employment law, and other areas. National fi rms still led the pack at 75.3 per cent, with regional fi rms at 62.6 per cent, global fi rms at 32 per cent, and alternative fi rms at 6.6 per cent. LPOs were last at 3.3 per cent. "I seek out individuals," says O'Reilly Wilks. "The fi rm brand means nothing to me unless we've been harmed by that fi rm. pipeline might slow down, but your litigation doesn't necessarily slow down. So you have to come up with creative solutions with law fi rm partners to continue to be able to retain great lawyers and the best advisers, but in a way you can accommodate restrictions in your budget," say O'Reilly Wilks. It may take a little probing, but the al- ternative solution is out there, she says. "I don't ever want to pay regular rate. I always want to have some kind of arrangement whether it's a fi xed fee or success fee or whether you build in various milestones," she says. "In any deal you do, if you're cre- ative you can structure it very similarly. If you're just doing small discrete deals, that might be a challenge unless you associate a success fee with getting it done a certain way in a certain time frame. In general, the kind of work we have we've always found ways to structure it so we can come up with alternate fee arrangements." BRINGING MORE IN-HOUSE IN 2016 Of those in-house who answered this year's survey, 61 per cent said the volume of legal work carried out by their department and external counsel combined was likely to grow in 2016 from 2015. Overwhelmingly, 81 per cent attributed the projected growth to "company is in growth mode" while many specifi ed "increased regulatory burden." Other reasons cited included "changing le- gal climate and developments in aboriginal law" and "increased regulatory pressures." One respondent said: "There seems to be more and more compliance/regulatory requirements and procurement groups are insisting on using their own form of a stan- dard contract, which is often not appropri- ate for the services provided resulting in a much greater expenditure of legal time to address the issues." Other responses show in-house counsel are also choosing external legal services pro- viders based on their knowledge of specifi c Do you ask the law firms you do business with to provide a diverse roster of lawyers to work with (i.e., reduced hours, women, visible minorities) as part of an overall diversity strategy in your organization? Yes 15.6 % No 76.6 % We're thinking 7.8 % about it If external spend changed, why? The business grew Bringing more work into the legal department Isolated/one off situation that led to higher fees 21.4 % 20.4 % 49.0 % Sending more work out 9.2 % '' '' I don't ever want to pay regular rate. I always want to have some kind of arrangement whether it's a fi xed fee or success fee or whether you build in various milestones. KERRY O'REILLY WILKS, Vale Base Metals Business best advisers, but in a way you can accommodate restrictions in Did the size of your legal department change over the past year? It grew, It grew, there is more there is more work to work to be done No change No change It grew, It grew, It grew, we filled we filled we filled positions left positions left vacant vacant vacant It shrank It shrank It shrank 28.9 % 54.1 % 7.3 % 9.6 %

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