COST-CUTTING: call for restraint as hourly rates rise by 89%


Leading in-house lawyers last week urged their colleagues to curb the rapid growth of fees paid to external law firms.



Delegates at the Sweet & Maxwell general counsel conference in London heard that hourly rates had increased by 89% nationally over the past four years, and that such growth could not be sustained indefinitely.



Helen Mahy, chairwoman of the GC100 and general counsel for National Grid, said the simplest budgetary measure she had put in place was ensuring that the business knew exactly which member of the legal team specialised in what area. 'That way you stop the business going outside to pay for help with a transaction which could have been handled in-house, ensuring maximum value from the in-house resource.'



She had also persuaded external providers to share the risk when transactions went awry. She added: 'But promise them a generous bonus - when it is deserved.'



Philip Bramwell, group legal director of BAE Systems, urged general counsel to overcome 'delegation paralysis'. He said: 'Your role is to conduct the orchestra, not play the fiddle.' When working in the US, he had had two dedicated paralegals doing all the more routine work - leaving 'just the hard stuff for me'.



Legal commentator Professor Richard Susskind told delegates that 'lawyers confuse the mechanisms of service with the purpose they fulfil' and that they should focus not on how the job is done, but on getting it successfully completed. To this end, a 'bespoke' service was inefficient and lawyers should move towards alternative models - such as 'commoditising services and multi-sourcing from alternative providers, including online'.



Jonathan Rayner