In-house counsel have become more systematic in the ways they manage their outside counsel and are applying basic vendor management practices in their evaluations–some requiring outside counsel to provide early assessments, budgets and results summarizing achievements and lessons learned, according to the 2007 ACC/Serengeti Managing Outside Counsel Survey released at the ACC's annual meeting Oct. 29 in Chicago.

The survey of 263 law departments gathered information about how in-house counsel are managing work handled by outside counsel and gathered metrics regarding the management techniques being used.

The results of the survey show that in-house counsel are more carefully monitoring outsourced work and are using more sophisticated technology to track the activities of outside counsel, using Internet-based systems that help them collaborate directly with outside counsel. About one-fourth of in-house counsel are more actively managing outside counsel than the majority of their peers through convergence (using fewer firms), issuing competitive bids for new work, requiring minimum levels of experience for associates and getting discounts for early payment of bills.

The survey also found:

– Budgets are being used to clarify expectations and monitor performance. Approximately three-fourths of in-house counsel require at least some budgets.

– In-house counsel appear to be having some effect on keeping hourly rates low, but there are signs the balance may be shifting on favor of outside counsel. For four years in-house counsel reported declining percentage increases in hourly rates charged by outside counsel, but during the last three years this trend has reversed.

– Half of the respondents terminated relationships with some of their outside counsel during the prior year. Almost 50 percent cited communication and personality issues as a driving force behind the termination.

Sixty-two percent of respondents are general counsel, 11 percent are assistant general counsel/staff attorneys and the remaining include law department administrators and other in-house counsel titles.

Of the respondents, 33.2 percent were from large companies (more than $1 billion revenues for 2006); 34.8 percent from middle-sized companies ($100 million through $1 billion); and 28.4 from small companies (less than $100 million).

The entire survey is available: http://www.serengetilaw.com/Survey/default.htm.