Why Clients Hire and Fire Law Firms

Wine dealers have a saying: "Buy on bread and sell on cheese." They know bread doesn't mask the taste of wine and that cheese does. When corporate clients relate to their outside law firms, they appear to operate on a similar aphorism: Buy for knowledge, fire for price.

That's one conclusion that emerges from the latest findings from Acritas, the U.K.–based research outfit that annually conducts detailed interviews with a few thousand general counsel and other in-house lawyers at major companies around the world. Acritas recently compiled a new report on client hiring and firing behaviors. The results are at once reassuring—the firing, while growing, isn't being done willy-nilly; more clients reported hiring new firms than discharging old ones. And maddening for business development officers—law firms have it in their power to affect both hiring and firing decisions. But by choice or blunder, they often fail at that effort—particularly when it comes to showing value for their rates.