Are You Being Proactive or Reactive to Your Client's Needs?
Altman Weil’s Chief Legal Officer Survey (“CLO survey”) has, for the past 18 years, offered a snapshot of the pressing issues facing CLOs today as well as emerging trends in the legal marketplace. In a profession that is notorious for being resistant to change, this survey is a yearly reminder of what in-house counsel deem important as well as a guide of how to tweak your approach to meet client needs. Change may be difficult, but it’s necessary to stay competitive in this market. So, what can you do to be proactive in obtaining and retaining work with your in-house clients?
According to this year’s survey results, 63.8% of CLOs received price reductions from outside counsel and 50.8% used alternative or fixed fee arrangements. These findings are in line with Altman Weil’s Law Firms in Transition survey (“Transition survey”) released earlier this year, which focuses on the challenges Managing Partners and firm Chairpersons face in transitioning their firm to meet client demand for efficiency, increased use of technology (e.g. e-discovery), and implementation of more cost control measures.
Cost saving measures and tactics are not new, but it’s apparent from both surveys that clients are looking for more creative options than just slashing prices on billable hours or utilizing e-discovery or analytics software.
As firms seek to remain competitive without participating in a race to the bottom by reducing legal fees, an “alternative fee arrangement” (“AFA”) that incorporates the use of litigation funding is a solution that gives in-house clients the value they seek while mitigating outside counsel’s risk.
In previous blog entries, we discussed how companies can use litigation funding to reduce their legal spend. For example, we can take a portfolio funding approach that gives corporate law departments the option to fund defense litigation as well as meritorious plaintiff-side claims that typically were left on the cutting-room floor. In using funding to finance litigation, legal spending is removed as a recurring expense item on the balance sheet. The company’s bottom line is positively affected. While most companies treat their legal departments as cost centers, the use of litigation funding can help bring strong claims in the right cases while mitigating cost and risk, thereby turning the department into a solid revenue source.
The Indiana Lawyer observed in the Transition survey that “50 percent of law firms are actively engaged in experiments to test innovative ideas and methods. These initiatives run the gamut from technology and data analytics to new business ventures, efficiency, pricing and staffing improvements, and efforts aimed directly at client engagement and retention.”
Staying ahead of the competition means anticipating the needs of your corporate clients. Contact us to discuss how you can incorporate litigation funding into an alternative fee arrangement package that will exceed your clients’ expectations.