Legal Commentary

Data Point: Experience and Size save money

By Patrick J. Lamb

I don't know why I didn't see this article before, but I just read Inside Counsel's September 2009 article on game-changing law departments.  CN, a multinational transportation company, shifted work from large firms to smaller firms.  How has that worked out?  Well, it seems.

The results have been surprising.

"I was expecting to pay X per hour, for Y number of hours," he explains. "So according to my calculations, we should have achieved a 25 to 50 percent reduction in legal spend."

But what Rudnikoff didn't expect was that the work at these small firms would be handled by more experienced lawyers than the large-firm associates who previously handled the company's less sophisticated work. As a result, they complete the work much faster at a smaller hourly rate, generating closer to a 75 percent reduction in cost.

And the risk of not having the work done by big firms?  Not a risk at all, as it turns out.

He adds that there is less risk in this approach than many companies may think. "Because we can afford to go with the most experienced lawyers in the small towns, the risk is lower," he says.

In this day and age, with so many big firm lawyers having left those firms, it is easier than ever to have the same lawyer you would have had at a big firm just a few years ago now doing your work at a fraction of the cost.  It's not like lawyers have their brains siphoned when they leave the halls of BigLaw, after all.  But BigLaw alums aside, lawyers who have run their own firm, who have dealt with the issues of meeting payroll and paying health care costs, have had an infusion of business experience that  counts for something as well.  Brand counts sometimes, but too often it is just an excuse.

Full post as published by In Search of Perfect Client Service on January 22, 2010 (boomark / email).