Photo credit: ALM

Big global law firms are increasingly feeling the competition from independent or boutique law firm networks, as nearly half of the in-house counsel in a recent survey said they use or intend to use such a network.

The report, “Global Legal Services in a Disruptive World,” was published by ALM/Legal Week in partnership with Interlaw, itself a global law firm network. It was published this February after surveying more than 100 general counsel and senior in-house lawyers across 41 countries. The British publication Legal Week is part of ALM, which also publishes Corporate Counsel.

The report said the results “reaffirm the widely held belief that today's GCs are continuing their quest to find a panacea for the provision of their global legal services—a provider that combines high quality service, a global footprint, local insight and cultural awareness.”

Some 77 percent of the in-house lawyers surveyed described their experience of using law firm networks as “excellent” or “good.” And 87 percent said they either “strongly agreed” or “agreed” with the statement “I'm increasingly more focused on ensuring I receive a quality service in each jurisdiction in which my organization operates, than [on] the structure of my legal services provider.”

While respondents used words such as “convenient,” “professional” and “reliable” to describe the networks, not everyone was so positive. Some said they found the networks “complicated,” “confusing,” “impractical” and “inflexible.”

As some major law firms have been retreating from international jurisdictions, the research found that 83 percent of international firms' lawyers are based in the U.K., Europe or North America. The report said this raises “legitimate questions about whether such firms do indeed have a truly global presence.”

The report quoted one general counsel, Tom Flynn, of the U.S. tech company Tangoe Inc. in Parsippany, New Jersey, as saying he typically receives a better, more responsive experience when using global referral networks.

“On one occasion when I ventured out and used a large international law firm for advice on data privacy, I had the worst experience I have had since using outside counsel,” Flynn was quoted as saying in the report. “They basically gave me a collection of comments on things from all of their local offices. There was no practical advice. I had a junior person, and it cost me a fortune.”

Other general counsel talked about some Big Law firms not always having a lawyer with the needed expertise in the right location.

Vincent Cordo Jr., global sourcing officer for the legal department at the Shell Oil Co. in Houston, said networks have been “extremely useful when we need to source local counsel in areas where we might not have that thumbprint available.”

Along similar lines, Jordan Kanfer, executive vice president and general counsel of NTT America Inc. in New York, told Corporate Counsel in a recent interview that he often prefers boutique law firms when looking globally.

“A boutique firm that is highly specialized, local to a particular jurisdiction or has significant experience with a particular issue is generally a better fit than a big firm that may, or may not, have someone with the right expertise,” Kanfer said. “And it's always going to be more cost-effective.”

The ALM report concluded: “In the end, the geographic arms race to create a global platform that offers clients rapid access to top quality and seamless legal advice, regardless of where in the world they are headquartered or operate, rages on.”