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CCCA_V3No3_Gaming-FIN.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 9/16/09 9:55 PM Page 28 Litigation Services appears to be little change in the majority of corporate counsels’ Win More … • In Altman Weil’s 2009 Chief Legal Officer Survey, a stunning approaches to engaging, managing and pricing legal services. Spend Less 75 per cent of CLOs pointed the no-change finger at their law firms, charging that they show little interest in changing their delivery model. Some see this as a dramatic vote of no-confi- dence in the competency of law firms as innovative change agents, as well as evidence that inertia continues to rule the client-counsel relationship. • Many CLOs, while bemoaning the intense pressure to reduce costs, tell me that their most frequently used approaches — ask- ing for discounted billable rates and instituting draconian sys- tems to audit legal bills — are proving ineffective in achieving real savings. These examples suggest that it’s fair to ask,“So,who isn’t driving change — and why aren’t they driving it?”Some attribute it to the reluctance of in-house lawyers to value the worth of law firm serv- ices by any other standard than the amount of time spent working on them.While they understand the need to link value to cost,they are as inexperienced as law firms in developing alternative approaches, holding fast to approaches they know well and have used for decades.Both in-house and outside counsel note how hard it seems to be for GCs to break long-standing habits, how readily What e-discovery software is they relapse into conventional wisdom. Many succumb to “magi- your counsel using? cal thinking” cost-control tactics rooted to the billable hour. Here’s another theory for GCs’ and law firms’ reluctance to embrace change:both gain something by gaming the existing sys- ® Insist on LexisNexis E-Discovery tem. Both corporate counsel and law firm managers tell me that Solutions — fast, effi cient, reliable. it’s not hard to negotiate across-the-board reductions of, say, 15 per cent in hourly rates. When I recently asked the managing ® • LAW PreDiscovery and Concordance — ™ Reduce processing and review costs by partner of one of the 10 largest U.S.“Big Law”firms whether dis- up to 80%. counted billable hour rates led to reduced revenues for his firm, he roared with delight: “We LOVE discounted billable rates, • Concordance FYI — Control outside because the more clients increase the amount of work they send ® ™ counsel review costs with real-time, remote us in response to ‘lower’ rates, the more apparent savings that they access to your data. can show off to their management.We trade off a little margin, Find out how LexisNexis e-discovery solutions but we get it back in volume. Net-net, our revenues increase and can help you control your litigation costs. the overall legal spend actually goes up. But the CLO can wave around a spreadsheet showing these ‘actual’ savings.” But that single tactic is unlikely to be enough to keep corpo- Call 1-800-668-6481 or email litigationservices@lexisnexis.ca. rate management off the CLOs’ backs. If a company’s revenues plummet 35-40 per cent over the last quarter, you can bet the shareholders lean on the C-suite executives and line managers to do everything they can to reduce costs. By analogy, isn’t it fair to ask CLOs to go beyond rate discounts and look at all possible approaches for curbing legal spend: convergence programs utiliz- LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., ing smaller or out-of-region firms with better rates, requests for used under licence. Concordance is a registered trademark, and PreDiscovery and FYI are trademarks, of Applied Discovery Inc. © 2009 LexisNexis Canada Inc. All rights reserved. 28 CCCA Canadian Corporate Counsel Association FALL 2009