SHRINKING WORK: litigators warned that they must control their costs to survive


A massive gulf exists between how dispute resolution lawyers in private practice think they are performing and how - in the eyes of their in-house clients - they are really doing, research has revealed.



The forensic and investigation arm of accountants Grant Thornton found that in the areas of managing costs, avoiding the expense of going to court and focusing on early resolution, there was considerable disparity in how the performance of external law firms was rated.



The 63 in-house counsel surveyed gave law firms a score of just 55% when it came to managing costs, whereas lawyers graded their own performance at 71%. On the issue of suggesting alternative dispute resolution (ADR) in preference to going to court, the scores were 70% from in-house lawyers and 89% from external providers.



A similar pattern emerged from the focus on early resolution, with the two sides proposing scores of 69% and 86% respectively.



Grant Thornton partner Toni Pincott said that only those which controlled their costs would survive the 'shrinking disputes resolution environment'.



She added: 'In-house counsel are suspicious that law firms are not financially motivated to recommend alternative dispute resolution, yet lawyers quote high percentages of early resolution cases they have worked on. [Both sides] need to learn how to embrace their differences and how to work together now and in the future.'



Martyn Rodmell, chairman of the Law Society's Commerce & Industry Group and in-house counsel at Princes Foods, broadly agreed with the findings of the research, particularly where costs were concerned. He called on law firms to prepare an early assessment of the merits of a case along with an estimate of the costs of pursuing or defending it - 'the key to litigation'.



Mr Rodmell said: 'Then we can work out the appropriate course of action, taking into account management time and legal costs to decide whether pursuing the case is a good or poor investment.' He added that he was a 'big fan of ADR' and urged a 'better meeting of minds' between in-house and external legal teams.



Jonathan Rayner