As we examined in-depth in our white paper “The Agent of Change,” the legal landscape is changing for both legal departments and firms. Departments are cutting costs and asking outside counsel to do the same as well as increase the efficiency of their legal service delivery model. Meanwhile, to remain competitive, many firms are responding to their clients’ requests. There’s yet another industry change: the addition of the legal operations expert to department personnel.
Recently in San Francisco, an inaugural conference for legal industry professionals was held: the Corporate Legal Operations Institute conference. As noted by Bloomberg Law, attendees were predominantly e-billing specialists and those who help manage department workflow, accounting, technology and more that contribute to cutting costs.
Shared goals among these operations professionals, led by the Corporate Legal Operations Consortium (CLOC), are to accurately forecast legal costs, which depends on technology and data accumulation, and increase efficiency by centralizing legal spending decisions through technology. CLOC already has industry billing guidelines in the works.
Additionally, AFAs are contributing to corporate cost cutting. They allow departments to lower law firms’ billings and increase fee transparency. According to the 2015 Altman Weil “Chief Legal Officer Survey,” some 60 percent of CLO respondents used AFAs or fixed-fee arrangements in the previous 12 months to control law department costs. The conference cited corporate examples such as Cisco and Uber. Meanwhile, in 2015 Altman Weil’s “Law Firms in Transition” survey, more than 93 percent of firms acknowledged using AFAs that year.
While it may seem like only corporations are gaining from the addition of legal operations professionals and their cost-cutting measures, firms, too, can benefit. It only takes a willingness to change. David Cunningham, Winston & Strawn’s chief information officer, spoke from the firm perspective at the conference. He believes that the corporate clients will be the catalyst for change among firms and that they will dictate its pace as well. He did note, though, that sometimes firms’ momentum can surpass even that of their clients.