Columbia Sportswear Co. vice president of legal Jennifer Warner opened Thursday's Summit on Legal Innovation and Disruption with some pointed advice for traditional law firms—start acting more like businesses.

“You have to start thinking about operating like a business,” she said. Too many lawyers, Warner explained, are just ”showing up and being smart and charging hourly rate” without a clear business strategy to improve clients' experience and meet their needs.

Warner spoke to the crowd of around 160 legal professionals, including 65 corporate counsel, at SOLID in San Francisco about the changing role of in-house leaders and their evolving relationships with outside counsel. She criticized firms, saying they are increasing rates annually without a matched increase in performance.

Members of her legal department have to work for pay increases above their 2.5 percent baseline, she said, and top performers can earn up to 3 percent, but law firms often raise rates by 6 percent without delivering outstanding performance. In-house counsel have to show excellent, innovative performance for higher pay, she said, and firms should be held to the same standard.

“That's what irks me, they are just so not acting like a business in any way shape or form,” she said.

In addition to her comments about law firm service, Warner also told the conference that now, more than ever, general counsel are expected to be not just lawyers, but informed, savvy business leaders. She said she's seen CLOs sitting at the table alongside the CEO, CFO and COO more often than she used to.

“Lawyers have got to be business people and that changes how we're providing services to our internal clients,” Warner said.

A key component to this change is developing a strategic budget and sticking to it, according to Warner. But she said that this emphasis on budgeting isn't necessarily about doing more with less. Instead, it's about ensuring that the legal department is using resources in the most effective way, and getting the most out of its spend.

She said her own goal is to spend the same amount in her department each year, but as efficiently as possible.

“I want to take that same amount of money and I want to spend it better,” she said. “I'm going to be looking at my total combination of resources. What are my outside counsel doing? What are my alternative providers doing? And what is my in-house counsel doing, and do I have the right mix? And the answer right now is probably not.”