In-house lawyers have ranked responsiveness and understanding of their businesses above price as the qualities they most look for when choosing external law firms.
Price came fourth, after specialist expertise, and innovative service delivery using technology a very poor fifth in a survey of over 200 in-house lawyers for Thomson Reuters.
One legal counsel at an investment fund said he was “shocked at the poor service we sometimes get” and “often dumbfounded by the poor level of responsiveness”.
He went on: “One of my biggest hates is chasing firms. Everyone is very responsive when they are trying to win the business but we need it at all times, including when we send a base-level one-off question to our lawyers.”
The survey, entitled Differentiation factor: What do businesses value most from external counsel? , asked in-house counsel to rate the qualities they were looking for in external lawyers on a scale of 1 to 10.
Responsiveness and understanding of the business were rated at 8.8 and 8.6, specialist expertise and price at 7.6 and 7.5, and innovative service delivery using technology at only 5.9.
Rachel Xuereb, senior corporate counsel at Expedia, told researchers: “I’ve had law firms saying they will get back to me within two days and then when those two days are up, they say it will take longer.
“That puts me in a difficult position because I have to then go back to my client and let them know I am unable to get back to them in the timeframe I had agreed.”
On price, the in-house lawyers agreed most with a statement saying that they valued transparency (over 95%), followed by flexible payment schedules (over 65%).
A majority (over 60%) said that, while using alternative fee arrangements, they still needed hourly rates to compare firms, and a smaller majority that they were happy to accept more junior lawyers working on their matters in return for lower fees.
A similar majority said they would be unhappy for their legal work to be partly outsourced to keep costs down. The most popular alternatives to hourly billing were capped fees, followed by fixed or flat fees and “task-based fees”.
The general counsel of a fund management company told researchers: “We far prefer to have fixed or capped fees. This is a big factor in our decision-making process and most firms accommodate capped fees, though not all offer discounted fees.
“It depends on how important we are to them. We normally agree an hourly rate and a cap and if the hourly rate is less we pay that.”
In-house lawyers most valued technology which helped improve cyber security and data protection, followed by document automation technology and client-facing portals which enabled easier collaboration.
They ranked document review software based on artificial intelligence third from bottom on their list, above automated advice through expert systems and e-discovery.
Alexandra Hammond, interim head of legal at the Royal Shakespeare Company, commented: “Document automation tools that populate template contracts with bespoke details that you provide are becoming more popular.
“This is more efficient than having a lawyer or paralegal inputting those details and probably also more reliable.”