"To take advantage of this shift in legal purchasing behavior, firms need to understand the old model and its influences and what is driving the new model and its future direction," wrote Mills.
The Old Way
According to Mills, the old way of buying legal services was characterized by:
- Bromance, or the Sisterhood of the Traveling Client, a time "when the bulk of a company's legal business would be assigned to a firm where the GC had a personal friend."
- Specialization Piecemealing, which led to "[parceling] out particular types of legal work to a large number of firms, each specializing in a particular field." Ostensibly done to produce a high level of expertise, this piecemeal technique "came at the real cost of high rates and low efficiency."
- Be Smart, Go Big, Stay Employed, or "[hiring] the biggest and most expensive firms for any substantial matter." This technique has fallen out of vogue as "GCs now know that biggest isn't always best, but most expensive is always most expensive."
"So, what is the New Way of hiring outside counsel?" Mills asked. "For the most part, it is the reverse of the above — an approach that can be described as 'Fewer, Cheaper, Better.'"
- Fewer – "Companies are consolidating their legal work among a smaller number of firms, finding those firms with sufficient expertise in several different fields to handle the company's work in those areas."
- Cheaper – More volume and predictable work flow allows firms to "offer clients deeper discounts, doing the same amount of work for less money while still realizing a profit." More frequent contact breeds familiarity and working efficiencies "and eliminates the expensive 'learning curve' that every new outside counsel goes through…in order to understand the company's business."
- Better – The bottom line: "Lawyers who know you and your business and care about you as a client will represent you better than those who don't."
The ending is happiest for GCs who retain fewer, cheaper, better firms and "firms who have the discipline and talent base to control their costs while providing a spectrum of top-quality services," Mills concluded. "In this adapt-or-die economy, it's time for us all to evolve."