Survey: Firms failing corporate counsel expectations

ALMOST THREE-QUARTERS (71 per cent) of US corporate clients think their law firms are doing too little to adapt to the aftermath of the economic crisis, according to a new report.

Under a fifth (18 per cent) of private practice lawyers say that their firms have lowered fees charged, while almost half of in-house counsel surveyed by LexisNexis (46 per cent) say they have requested such a reduction.

As a result, over half (58 per cent) of corporate counsel think that their law firms are still too profitable and only 38 per cent believe law firms are being responsive to the pressures intensified by working in
the recession.

LexisNexis interviewed over 500 people for its ‘State of the Legal Industry’ survey, including some 300 lawyers and approximately 150 corporate counsel.

Just over two thirds (69 per cent) of corporate counsel say they have brought more work in-house owing to the downturn, while half (56 per cent) have cut their external spending.

LexisNexis CEO Andy Prozes said there seemed to be “a Grand Canyon-sized divide between the opinions of corporate counsel and those of law firm attorneys on some of the most important issues”.

“If we’re going to close this gap, all of us in the legal community need to take a holistic approach to address these challenges,” he added.

For their part, three-quarters (77 per cent) of lawyers think their clients are focused on cutting costs at the expense of producing long-term benefits to the business.

Almost half (43 per cent) say they have made redundancies through the recession, with a quarter (26 per cent) reducing lawyer salaries and 41 per cent offering alternative fee structures.

Furthermore, over a quarter (29 per cent) of firms admit the downturn has affected recruitment, deferring the start date for new lawyers.

The study also encompassed around 100 law students, approximately half (54 per cent) of whom said the state of the profession was leading them to consider alternative careers.