Canadian Lawyer InHouse

25 CANADIANLAWYERMAG.COM/INHOUSE JANUARY 2017 Rotstein says there is continued growth in in-house departments. When he talks to in- house counsel, there is a consistent theme of getting more work and hiring more lawyers, and as a result, the relationship between ex- ternal legal providers and in-house depart- ments is changing as well. He says there's a need for a well-stocked in-house legal team that can identify risk and manage it before "the horse has left the barn" and the com- pany ends up in an undesirable situation. When it came to external spend, 27 per cent said it changed because more work was being brought into the legal department, up from 20.4 per cent last year. Only 4.3 per cent said external spend changed because they were sending more work out — last year, the number was 9.2 per cent. O'Reilly says there's been a lot of consolidation, and that makes sense given the state of the market, especially in Alberta, where there's been a signifi cant slowdown internally with organizations not undertaking projects like they did in the past or "may be cash-short on the balance sheet. "In order to reduce risk of the legal department losing jobs you want to make sure they're as busy and providing as much value for the organization as possible," O'Reilly says. Rotstein says most corporate counsel still work in small in-house departments, despite the recent uptick in hiring he's no- ticed. Some 51.2 per cent of respondents have less than fi ve lawyers in their legal department, 24.1 per cent have six to 15 lawyers, 9.9 per cent have 16 to 30, 4 per cent have 31 to 50, 5.6 per cent have 51 to 100 and only 5.3 per cent have more than 100. He says some big corporations have in-house pricing departments, and while smaller in-house departments don't have those resources, he predicts it will become a trend as in-house departments grow. BY THE NUMBERS A variety of sectors took part in this year's survey, with 19.1 per cent from the fi nancial sector, 17.5 per cent in government, 14.9 per cent in the industry or manufacturing sec- 78.8 % 21.2 % Yes No ARE YOU INTERESTED IN ENGAGING WITH YOUR LAW FIRM(S) IN AFAS? 50.2 % Billable hours 42.9 % Combination of billable hours and AFAs 2 % 4.9 % Flat fees Alternative fee arrangements (AFAs) 0 to 25 per cent 26 to 50 per cent 51 to 75 per cent more than 75 per cent 64 % 24.3 % 5.4 % 6.3 % WHAT TYPE OF BILLING ARRANGEMENT DO YOU HAVE WITH YOUR PRIMARY LAW FIRM/EXTERNAL SERVICE PROVIDER? IF YOU USE ALTERNATIVE FEE ARRANGEMENTS WHAT PERCENTAGE OF THE WORK YOU SEND OUT FALLS UNDER AN AFA? Specific lawyer(s) Industry/practice area expertise Technical expertise Law firm reputation 65.6 % 56.4 % 40.1 % 30 % IF NOT WHY? 47.5 % 42.5 % 62.1 % 37.9 % We prefer a billable hour model Doesn't apply to the work we send out to external firms 22.5 % Don't fully understand AFAs DO YOU CHOOSE YOUR EXTERNAL LAW FIRM BASED ON: IS THE VOLUME OF LEGAL WORK CARRIED OUT BY YOUR DEPARTMENT AND EXTERNAL COUNSEL COMBINED LIKELY TO GROW FOR YOUR COMPANY IN 2016 FROM 2015? Yes No

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