Clients Increasingly Initiating Predictability & Control for Outside Counsel Legal Spend

Recently, some mega-companies announced significant organized efforts to reduce their company’s total annual legal spend by moving more work to outside law firms, lawyers, and other providers on fee arrangements other than the billable hour (AFAs or alternative fee arrangements). In the process, many companies are also identifying where unbundling their legal needs can create efficiencies, and reducing the total number of outside law firms, lawyers, and other providers they use.

Two companies in the news recently doing this are Microsoft and GlaxoSmithKline (GSK). But in recent years, several other Fortune 10-100 companies have also been working hard to move their significant volume of outside legal work on fixed or flat fees.

So, the three related trends below are not new, but they are increasing significantly in pace, sophistication, and voracity:
1. Moving more or all work to AFAs,

2. Unbundling legal needs, and

3. Reducing the total number of outside firms/lawyers used. 

Law firms that remain in a mainly reactive posture, simply waiting for clients to send them an RFP or RFQ, risk falling behind the curve and being left behind. If your firm can use experienced assistance creating and implementing a proactive strategy and plan to ensure you do not lose significant client work and share in the future, please contact me, Julie Savarino.

Microsoft's Embrace of Alternative Fees Shows Wider Trend

Microsoft's Major Shift to AFAs

GSK Gets Tough on Fixed Fees