Top general counsel content to limit rather than cut rising legal budgets

Clients have resigned themselves to merely attempting to control spiralling legal spend rather than setting in place plans to reduce costs, according to a new survey of general counsel.

November 14, 2007 at 09:09 PM

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Clients have resigned themselves to merely attempting to control spiralling legal spend rather than setting in place plans to reduce costs, according to a new survey of general counsel.

The poll, conducted by Nisus Consulting for CMS Cameron McKenna, showed that less than 5% of general counsel at FTSE 250 companies had a specific target by which to reduce their legal costs. Instead the respondents are focusing on controlling costs and managing increases.

Senior counsel from a raft of large international companies, including Cadbury Schweppes, Legal & General, National Grid and Barclays, highlighted a number of areas in which they want more help from their outside advisers to control legal spend.

The most important of these were a move away from hourly billing, a factor cited by (68%) as the most important factor in reducing costs. Nearly two out of three (63%) general counsel called for better control of costs from firms. The third area cited by respondents was better project management and scheduling, which 60% of general counsels wanted to see. Slightly more than half (53%) said an improved understanding of their business needs would be advantageous.

However, despite calls from the bulk of in-house counsel for firms to tighten their costs, almost half (44%) of respondents admitted that they had no formal panel arrangements in place to help organise their procurement of external legal services.

The survey also found that while interest in single adviser arrangements such as those run by DuPont and Tyco was substantial, with half those polled saying they were either 'interested' or 'very interested' in the arrangement, only 6% went as far as to say they would want to actually implement such measures.

Camerons senior partner Richard Price said that demands from general counsel for a better response from external advisers far outweighed any tangible evidence of improvement from firms in helping to control costs.

He said: "Disappointingly, only 40% of interviewees felt law firms have responded proactively in helping them to reduce costs."