legal procurement

Ten Things: Alternative Fee Arrangements – What In-House Lawyers Need to Know

I had a different topic in mind for this post and then someone sent me a screenshot from a fee request filing on Pacer (the federal courts’ e-filing system).  Here’s just a snippet:


This is not a joke.  You are reading this correctly – $775.00 per hour for first-year litigation associate lawyers.  $1,205.00 per hour for a third-year!  In a world that often feels insane, we’ve reached a new level of rate insanity when it comes to legal fees, especially those demanded by the mega firms.  If you are like me, you looked at this chart and then fell out of your chair, unconscious and involuntarily flopping on the floor like a dying fish.  Or maybe that’s just me?  Unconscious or not, there is a lot wrong with these numbers, but I do not want to spend 3,000 words bashing the business model of the mega law firms.  I know you all get it.  Hell, even the folks at Big Law get it – they just can’t change the trajectory.  But, the bigger questions to me are: (1) is this rate insanity sustainable, and (2) what can in-house legal departments do about it?  Personally, I believe that the number of clients who can afford these rates (or have matters justifying these rates) is shrinking, like George Costanza at the beach house coming out of a cold swimming pool.[1]  In other words, is a reckoning coming?

I have no idea.  These rates may, in fact, be sustainable.  The legal services marketplace seems to be immune to pressures other businesses face.  So, let’s just set that question to the side.  Instead, today I want to talk about – once you stop flopping around and get back into your chair – what in-house legal teams can do in response to rates like this.  In particular, I want to discuss alternative fee arrangements as I have been asked about these numerous times over the past month or so and they are likely to be (if done correctly) one of the most promising ways legal departments can get some control over the cost of legal services, especially when economic times appear to be as uncertain as they do here in the first half of 2023.  This edition of “Ten Things” will tell you what in-house lawyers need to know about alternative fee arrangements:



Ten Things: Running a Legal RFP Process the Right Way

It used to be that companies selected outside counsel based on things like relationships, reputation, and tickets to sporting events/fancy dinners.  Those days are fading fast, especially beginning around 2008 and the resulting aftermath of the “Great Recession.”  That’s not to say that the above are no longer important (who doesn’t like front row NBA tickets?), but more and more the selection of outside counsel is based on the same principles and processes the company uses generally to select any vendor.  This includes the use of RFPs (Requests for Proposals) to search out and find the best firm for the problem at hand.  Like many things involving the business part of the law, in-house lawyers aren’t particularly good at this process – for now.  I remember utilizing the RFP process while in-house on a number of occasions.  We were okay at it, but not great.  We got better over time as we learned a lot of lessons during the process – especially from dealing with the results of our process (which is a big clue that we did not always get a gold star for our efforts).  Regardless, more in-house departments are starting to use the RFP process – either on their own initiative or because they were “persuaded” to by senior management or other circumstances.  If you do it right, the RFP process can deliver tremendous value to the legal department and the company.  This edition of “Ten Things” walks you through how to run a legal services RFP process the right way:


Ten Things: Legal Procurement – The Next Big Thing for In-House Lawyers

I know that artificial intelligence is the hot topic of the moment for in-house legal departments.  And it should be.  It promises tremendous cost savings and productivity enhancements for in-house lawyers.  While everyone is very excited about the new kid in town, there is something brewing out there that is equally exciting but which rests on some pretty mundane financial principles: procurement.  Or, more specifically, legal procurement.  Now, before you go running into the hallway screaming that it will be a very, very cold day in hell before you let anyone from procurement get involved with your law firms, hear me out.  There’s something here that’s worth exploring.  This edition of “Ten Things” will provide a primer on the legal procurement process: