UK publication Legal Week summarizes the findings of an Altman Weil survey on corporate legal cost control. One clear lesson is:
While companies appear to be engaging in conversations with their external legal advisers regarding cost controls, the surveyâ€™s results mirror last yearâ€™s findings, showing that little is being done to curb law department expenditure and revolutionise billing methods. Indeed, cost cutting by in-house legal departments seems to have plateaued for the second year in a row.
The article quotes Altman Weil principal Daniel DiLucchio that hourly billing remains the main method of billing, lessening predictability in annual budgets. He also makes the helpful observation that reduced hourly rates, reported as the leading alternative billing arrangement (by 57% of companies surveyed), is really no alternative at all. Anyone who hasn’t seen reduced hourly rates combined with excessive hours hasn’t been around the block much.
The survey is available for purchase at Altman Weil.
The bottom line for outside lawyers: your client’s GC needs some assistance in cost control.
The bottom line for the GC: if you don’t show cost improvement, someone else will do it for your successor.
On Wednesday, a preview of a new source for information on one growing weapon for legal cost control.