April 27, 2009 12:59 PM

In-House Lawyers: We Don't Necessarily Want to See You, but Alternative Fees Would Be Nice

Posted by Zach Lowe

The Am Law Daily chuckled a little bit when we read the section of the Association of Corporate Counsel's annual survey of chief legal officers in which the CLOs were asked to check off any number of ways outside counsel could improve their relationship with in-house lawyers. Only seven percent of respondents wanted more on-site visits from law firm folks, but 60 percent said they would prefer that firms use alternative fee arrangements more often. 

So: face-to-face contact ranks far below the almighty buck, though, in fairness, 49 percent of respondents did say they would like more frequent communication with firm lawyers.

The survey also shows that while alternative fee arrangements may be the next Big Thing, their time is slow in coming. Seventy-eight percent of respondents say that between zero and 10 percent of their annual spend goes toward alternative fee arrangements. The second-biggest chunk of respondents--about 14 percent--say they spend between 11 and 25 percent of their department's budget on such arrangements. 

One thing they can all agree on: the billable hour is problematic. More than 90 percent of the CLOs feel a major "disconnect" between the billable hour system and the fee-based structure they'd prefer. 

Other interesting nuggets from the survey:

• More in-house departments are cutting paralegals and staff, but those that are keeping their paralegals and support staff are working them harder. About 68 percent of respondents said their staff included paralegals and legal assistants, a seven percent drop from the 2008 survey numbers. But about half of the respondents said one of the main ways they are saving money is by giving more work to paralegals and support staff.

• Hiring is down, which is no surprise. Less than one-quarter of respondents said they are planning to hire lawyers or staff this year, down from 32 percent in the 2008 survey. 

• In-house lawyers are stressed out about increasing government regulation. Nearly half of respondents--48 percent--ranked increased government scrutiny as a factor ranging from "little importance" (which actually ranks eighth out of 10 on an escalating scale of importance) to "highly important" (the maximum '10' on the scale). Only 20 percent of respondents put government oversight in that range in the prior survey. 

More than one-third of respondents said the heavy scrutiny could impact their decision to retire or seek another job.

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