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Archived updates for Monday, May 02, 2005

Strategic I/P Legal Sourcing

According to "Strategize This! Prepare Now For When Procurement Analysts Come Knocking on the Legal Department's Door," (Altman Weill; October 2004):

Too many CLOs don't have the information they need to manage legal costs properly. Those who continue to rely on instinct to justify budgets and increases in staffing requests are vulnerable. Today's marketplace and technology tools provide to legal departments of all sizes the ability to become savvier consumers of legal services. Shaking up long-term and trusted relationships with outside counsel will be uncomfortable. However, law firms that are truly delivering great service and doing so in an efficient manner will only stand out further when the electronic billing data is analyzed.

It generally takes about six to nine months’ worth of ebilling data to begin
performing a valid statistical analysis. Prior to accumulating that much data, work is focused on identifying how the information needs to be categorized and sliced for future analysis. Interpreting economic benchmark data can be a daunting task.

For intellectual property work, start with the the "I/P Task-Based Billing Codes" discussed at If you drop me an e-mail at or, I would be pleased to send you a copy at no charge.

The authors go on to describe the details of a three-pronged approach to mining your ebilling data for startegic information:
  • Performance Management -- Define the metrics by which outside counsel will be measured by developing a “Performance Scorecardâ€� that rates law firm performance
    against peers and industry data.
  • Relationship Management -- Definine how these new expectations and ratings are communicated to outside counsel is critical. Long-term law firm relationships must be handled with care, especially with lawyers who have developed a deep understanding of your business. Most law firms want to exceed client expectations.
  • Fiscal Accountability -- Law firms know that the hourly billing model is not always in the best interests of a client. Some law firms are highly creative and willing to share risk with
    clients when they are provided with accurate information and incentives, in an economic manner that is fair to both law firms and corporations.

They don't view the problem as an epic battle between in-house and outside counsel, and neither do I. For more information on strategic legal sourcing, check out the Altman Weil Direct newsletter at I have been reading it for years and would enjoy hearing your thoughts on some of these ideas on how to get more for your money from outside counsel. I'll even spring for the lunch.

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April 07, 2009 4:54 AM  

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