As a Corporate organisation how do you choose which law firms to use?
There are several considerations:
· Can new firms join, and incumbent ones be removed? How do you know that the lawyers you use have the right expertise for both routine and specialist areas of work? Do you have any way of assessing quality of work and service standards, and what sanctions do you apply if there is unsatisfactory performance?
· What control do you have over your legal spend? Do you know how your lawyers calculate their fees? What process do lawyers follow for estimating fees in advance? Are market forces brought to bear so that you can be sure you are paying the best rates available at any given time?
· What value added benefits do you receive from your lawyers? Is there any co-ordination of value added benefits on offer?
You require a system of reliable up to date information on all your law firms so that all the important variables such as price, performance, productivity and efficiency can be understood both within a law firm and comparatively benchmarked across all your law firms.
For a business to have a true understanding and control over their legal work and spend they must be able to ensure that:
· Appropriate hourly rates are being charged at all times across the range of firms and fee earners.
· There is visibility of time entries to ensure they are at the appropriate charge out rate
· The external spend on external service providers such as Counsel are being controlled along with other disbursements
· The time being spent on each transaction is appropriate and in keeping with the needs of the case
· Service level agreement are being fully complied with
· There is the ability to see case transactions to ensure that the matter is being driven forward.
· Bills as they are presented provide sufficient detail and are transparent for both direct costs and disbursements spend.
· There is the ability to assess law firm activity when there are multiple firms on one matter to ensure there is no duplication of time and work
· There is the ability to compare firms used in terms of time, charges, reduction or increases in damages (depending if acting as defendant or claimant) case life cycles and efficiency over different variables such as fee earner, firm, case type and level of damages.
By accessing and analysing this data it will then be possible to create true and accurate scorecards with detailed information ensuring the most productive and efficient firms receive the work they are good at. Poorer performing firms, fee earners or areas of work can be identified, work redirected, and targets created to ensure improvements are made. If such improvements are not made, then law firms can be replaced. If a business cannot access this level of information and if a law firm cannot provide it, how can there by true transparency of operation and assurance that the considerations outlined at the beginning of this article such as assessing quality of work, control over legal spend and value-added benefits are achieved.
LHQ, through its law firm management analysis and costing tool offers such visibility and analytics on law firm activities and provides both the purchasers and sellers of legal services with the ability to deliver a transparent and effective tool to monitor, control and interact on activities in legal transactions. Such transparency and understanding will ensure the correct firms and lawyers are doing what they are best at for the most reasonable cost, in other words the right law firms for the work required have been chosen.