Research: survey reveals that many multinationals expect to instruct fewer law firms next year


One in four multinational companies expects to instruct fewer law firms next year, research has revealed.



More than half of the 84 multinationals surveyed by publisher PLC and invoicing systems provider Datacert now have panels of preferred external law firms in place, and 16% of the remainder said they intended to introduce them within the next two years.



Respondents said they favoured panels because it was easier to negotiate discounted rates with them and they were easier to monitor - with the effect that companies have reduced expenditure on external law firms by one-third compared with last year.



Paul Gilbert, chief executive of legal management consultancy LBC Wise Counsel, said the survey did not point towards a 'real change in philosophy' on the part of the multinationals. 'What we're seeing is a greater degree of scrutiny, with external law firms managed in a more disciplined, structured and transparent way to give measurable added-value.'



General counsel, he said, wanted a 'symbiotic' relationship. They wanted to see external firms accept training to learn their clients' business, and to provide proactive support and secondments 'to add manpower in-house when required'. He said: 'But the biggest challenge to external law firms is to create pricing models that provide more value in innovative ways.'



Mr Gilbert added that companies always outsourced some work, such as litigation or regulatory activities, but kept day-to-day expertise in-house. 'If you manufacture widgets, then it makes sense to have a widget lawyer on hand.'



Jonathan Rayner