The Evolution of Legal Consumers | Forbes

David J. Parnell interviewed me for Forbes on The Evolution of Legal ConsumersHe asked me to describe the evolution of legal consumers over the past 10-15 years. Here’s what I said: “Speaking about the corporate legal consumer, this market has become a buyers’ market in that time frame. Law firms added expensive capacity to meet robust demand, and then the demand for high priced legal services tumbled in the recession. Not every segment was hit equally hard, but companies decided that “commodity” legal work needed to be done more cost effectively. The companies, en masse, decided to apply procurement principles to the acquisition of law service. It is rooted in cost pressure that comes from the client’s top management and requires the legal department to act upon it.

Many of today’s legal clients shop around and consolidate the number of firms they work with. They demand more value for their legal budget and financial accountability from the law firms they hire. Many firms experience the increased pressure, and as a consequence, clients have an easier time to get costs down and to dictate the terms. It has become more Darwinian: Successful firms have responded with automation, low cost labor to least complicated problems, and locating law talent to less costly markets. The day of the multi-million dollar legal bill with no explanation has come to an end.

Corporate clients also have become much more sophisticated buyers who better understand their needs. This is due to increasingly-available comprehensive legal information on the Internet as well as companies employing former private practice lawyers who understand how law firms work, where money can be saved, and how more value can be created. With the rising influence of procurement among large companies, many law firms have become providers of legal services rather than trusted advisors.  The data explosion has made it easier to make tough and wise choices.” He also asked me a number of other questions. Read the full interview.

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How efficient are you? Accept the #LegalTechAudit challenge

Kia’s general counsel, D. Casey Flaherty wants efficiently delivered legal services. And he means it. 5+ hours or 30 minutes? At an assumed hourly rate of $600, the difference is $3,000+ vs. $300. Multiply that by x tasks that lawyers perform, the difference is staggering. While many law firms today state that they are, indeed, very efficient, Flaherty puts them to the test: He developed the Legal Tech Audit (“LTA”) that he just launched with Suffolk Law School’s Institute on Law Practice Technology & Innovation.

The LTA assesses how well lawyers and staff members use technology to complete commonly encountered legal tasks. How well do they know their word processing program and their spreadsheets? Do they use them in the most efficient manner? Are they over 5+ hour-types or closer to Flaherty’s own score of 30 minutes? The LTA will tell you. It currently requires test takers to perform a series of assignments that constitute a single, continuous workflow. 

So, are you ready to accept the challenge? You will first finalize a redlined investors’ rights agreement using word processing. Then you will be given data on dividend payments to investors to investigate whether payments were made equally to all investors to test your way around spreadsheets. Finally, you will prepare an e-filing attaching the agreement and spreadsheet (PDF). Watch Flaherty’s short video.

… So what is your score? 

(I still have to take mine…!)

 

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Legal procurement meeting in September

Calling all legal procurement professionals: We are organizing another legal procurement meeting to discuss what keeps legal procurement professionals up at night.

This time, our topics are:

  • Alternative fee analysis – assessing value
  • Law firm negotiations based upon case outcomes & qualitative metrics

If you are a legal procurement professional and would like to join us on Tuesday, 9/23 from 2-4:30 pm in Midtown Manhattan, please email me: hodges [at] silviahodges [dot] com

 

 

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