Today, the most successful companies remain hyper-focused on their customer’s needs and changing behaviors. For example, Netflix invested heavily in its streaming capabilities after seeing a rise in demand for instant video, leading the company to become the content giant it is today.
Midsize law firms who count corporate legal departments among their top customers should also take heed and similarly adapt with their clients.
The recently published 2019 State of Corporate Law Departments report exposed many of the challenges facing corporate law departments and the actions general counsel are taking to overcome those challenges. While there is a growing responsibility to minimize damage to the corporate reputation, in-house departments also are changing the way they work — hiring more project managers and diversifying their teams, rebuilding their external partnerships to allow for more collaboration, and increasing their focus on quality, cost, and value.
Law departments are still using panels and preferred provider programs and realizing an average cost savings of 23% as a result. However, only 12% give all their work to those preferred providers, so if you’re not on the list there is still a chance of securing opportunities. The more sophisticated law departments are focusing on building highly collaborative relationships between their in-house attorneys, managed service providers, and external law firms. Law firms who demonstrate a commitment to this new approach to collaborative work will have an edge.
Many corporate law departments are adopting policies consistent with their corporate parents and focusing internal efforts on matching corporate responsibility and diversity initiatives. They are also expecting the same from outside counsel. Indeed, 29% of all law departments (and 62% of those with annual spending in excess of $50 million) are requiring their outside law firms to share diversity information with them. When they look at your firm’s demographic data will they see that more than 30% of your leadership consists of female and minority lawyers? What other firm initiatives can you point to?
The most successful corporate law departments are focusing on effective project management training and process improvement, resulting in greater internal efficiencies, reporting, and detailed planning. In turn, they are expecting their outside counsel to match their pace and working style. How can your firm show it can deliver an outcome on time and on budget? Collaborative relationships, where objective and incentives are aligned, are blooming.
Investment in Systems and Technology
In-house counsel are noticing your commitments to innovation and awarding 5% higher ratings across all key performance areas to those firms that they see are investing in the latest legal technology, embracing alternative pricing models, and providing value-added services like training and knowledge sharing. Legal departments themselves are investing in these innovative activities, and more than 50% have hired some form of legal operations professionals.
As in-house counsel work to minimize data losses, they will certainly conduct security assessments of their external law firms. Can you prove that your firm has the software, policies, and physical security protections in place to ensure that clients’ valuable data remains safe? Not only should law firms possess these protections, they need to be able to effectively speak to them in their proposals and be able to communicate in the same language as the corporate client’s Chief Information Security Officer.
The 2019 Report on the State of the Legal Market: A View from the Midsize Firms, revealed that midsize law firms increased their investment in technology by 5% per lawyer in the trailing 12 months, and further analysis suggests that number was even higher among the firms who achieved the greatest success.
Investments in technology that promotes efficiency and improves operational effectiveness, increases transparency, and differentiates your firm’s knowledge capabilities will assist you in meeting the corporate client’s needs and setting your firm apart.