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More than Half of CEOs Involved in Selection of Outside Law Firms, According to
Posted by randy on: 2005-11-12 17:52:23
More than Half of CEOs Involved in Selection of Outside Law Firms, According to LexisNexis(R) Martindale-Hubbell(R) Survey of Corporate Counsel
NEW PROVIDENCE, N.J.--(BUSINESS WIRE)--Oct. 24, 2005--
International Survey Reveals How Corporations Identify, Evaluate and Select Outside Legal Counsel
A new survey by LexisNexis(R) Martindale-Hubbell(R), the leading provider of client development solutions for the legal profession, found that 52 percent of chief executive officers are becoming personally involved when their legal departments look for new outside counsel to represent the company.
The survey, "State of the Profession Report: How Corporations Identify, Evaluate and Select Outside Counsel," was conducted for Martindale-Hubbell by Cogent Research of Cambridge, Mass. More than 600 in-house counsel from around the world were questioned in the spring of 2005.
According to the survey, when it comes to high-stakes matters, the most senior executives in the company -- including the CEO and the CFO -- are often involved in the decision about which law firm to select. In one in five companies, the CEO even makes the final decision about which law firm to retain.
"The lesson of recent years is that the impact of high-stakes litigation on a company's future reaches far beyond the courtroom and into the court of public opinion, the stock market and even the personal lives of company executives," said Mike Walsh, senior vice president of large and national law firm markets at LexisNexis. "With so much on the line, CEOs feel it's increasingly important to get personally involved in the job of selecting a law firm to represent the company in a major case. It's increasingly common for CEOs to play a very active role in choosing new outside counsel for important matters."
Other noteworthy findings from the Martindale-Hubbell survey include the following:
-- Expertise Outranks Cost
In spite of intense cost pressures, most companies want the best lawyer possible when the heat is on. According to the survey, a lawyer's expertise is the single most important factor when it comes to choosing new outside counsel for high-stakes matters (87 percent rated expertise "extremely important"), placing it far above other considerations such as cost or reputation.
-- Preferential Treatment Predominates
When selecting outside counsel, most companies use some sort of preferred provider list, regardless of whether the specific work involved is considered a high-stakes matter or a low-stakes matter. The survey found that 80 percent of companies use a list for high-stakes matters and that 82 percent use a list for low-stakes matters. However, more than half (57 percent) said that their provider lists for high-stakes and low-stakes matters are different.
-- Law Firm Consolidation Continues
Law firm convergence -- the process of consolidating the number of outside law firms with whom a company does business -- has been an important trend in the law firm marketplace over the past decade. The Martindale-Hubbell survey found that one-third of companies expect to undergo some form of convergence in the near future.
-- Loyalty Linked to Client Service
Although lawyer expertise is by far the most important factor when companies select outside counsel, other factors become more important after they bring new outside counsel on board. Once a law firm is retained, client service becomes the most important consideration (94 percent rank it as "very important" or "extremely important") and lawyer expertise is ranked second. Moreover, money becomes a more important issue once a firm is retained, as fees and budgeting vault to the third most important consideration, as compared to sixth place during the initial selection process.
"Relationship dynamics between in-house counsel and their outside law firms begin long before the first matter is actually assigned to the firm," said Walsh. "Firms gain advantage by obtaining a deeper understanding of these new dynamics and the way in which corporations identify, evaluate and select outside counsel in the 21st century."
Please go to www.martindale.com/corpbuy05/executive_summary.pdf to download an executive summary of the study. Members of the news media can obtain a complete copy of the report by sending an email to dteague@teaguecommunications.com.
About LexisNexis
LexisNexis(R) (www.lexisnexis.com) is a leader in comprehensive and authoritative legal, news and business information and tailored applications. A member of Reed Elsevier Group plc (NYSE:ENL) (NYSE:RUK) (www.reedelsevier.com), the company does business in 100 countries with 13,000 employees worldwide. In addition to its flagship Web-based Lexis(R) and Nexis(R) research services, the company includes some of the world's most respected legal publishers such as Martindale-Hubbell, Matthew Bender, Butterworths, JurisClasseur, Abeledo-Perrot and Orac.
LexisNexis Martindale-Hubbell (www.martindale.com) is the leading provider of client development solutions for the legal profession, partnering with its law firm customers to meet their practice development goals. The company offers opportunities to speak at industry conferences, publish legal articles and showcase expertise through a wide range of online products. The Martindale-Hubbell database of more than 1 million lawyers and law firms, accessible at www.martindale.com and www.lawyers.com, is the number-one lawyer directory on the Internet (as measured by Nielsen//NetRatings). The company provides lawyers, business executives and consumers with detailed information to help them identify, evaluate and select legal counsel.
About Cogent Research
Cogent Research, LLC (www.cogentresearch.com) is a full-service, strategic marketing research and consulting firm located in Cambridge, Massachusetts. Cogent Research provides clients with the highest quality and most innovative research design, data collection, and marketing analysis services available in the industry today. The company offers a full range of traditional and cutting-edge research tools, including phone surveys, mail surveys, web surveys, focus groups, online discussion boards, in-depth interviews, and web-facilitated interviews. Drawing on experience conducting research for more than 300 organizations in industries ranging from legal to finance and high-tech to health, Cogent Research delivers strategic results and recommendations that work. Clients rely on Cogent Research for work on a variety of issues including new product development, branding and positioning strategy, marketing, advertising, customer satisfaction, market evaluations and segmentation, public relations, and more.
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Daryn Teague, 661-297-5292
dteague@teaguecommunications.com
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