Biglaw, General Counsel, In-House Counsel, Midsize Firms / Regional Firms, Small Law Firms

Why Was Your Firm Fired as Outside Counsel?

How can your firm stop corporate client attrition? It's all about awareness and dialogue, according to this Acritas survey.

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Landing a corporate client is usually a happy time for any law firm, big or small. Now, the representation may not be a day in the park — after all, there are many, many ways for general counsel to drive outside counsel absolutely nuts. But even so, this kind of a client is another notch in your firm’s belt, no matter how difficult the relationship. Especially given today’s economy, this is a client that your firm will want to keep for as long as possible.

But regardless of everyone’s efforts, your firm just couldn’t seem to get it right. Your firm’s lawyers tried to placate the legal department’s every whim, to apparently no avail. Perhaps the proposed budget was a little too high. Perhaps an attorney from your firm was just a bit too snippy with in-house counsel. Whatever the case may have been, your firm got fired.

Why does this keep happening, and how can you make it stop?

Well, you might not be able to make it stop, because let’s face it, 30 percent of in-house counsel dropped at least one firm in the past year. But thanks to Acritas, a U.K.–based market research firm, you can at least figure out what your firm’s downfall has been.

Each year, Acritas interviews thousands of general counsel to get a sense of their experiences with firms they’ve hired as outside counsel. This year, the company wanted to know why GCs decided to fire the firms that they were so eager to hire in the first place. Here are the results, as cited by the American Lawyer:

  • 21% — outside counsel’s firm was too expensive
  • 18% — outside counsel’s firm gave bad advice and lacked expertise
  • 16% — the job ended, and so did the attorney/client relationship
  • 15% — outside counsel’s client service was poor
  • 11% — outside counsel’s firm lost a key lawyer

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The most-cited reason had to do with price point. Is anyone really shocked by this? When we spoke last week about the firms that represent corporate America, we noted the importance of reducing costs and proposing alternative fee structures. An unwillingness to negotiate on fees may yet be your firm’s undoing.

But wait, there’s more! Corporate clients have been doing some talking about you behind your back. Take a look at these quotes from dissatisfied in-house customers, pulled from the Acritas report:

“They were doing a bad job: no results and a lot of invoices.”

“Poor service. Lots of delay. When challenged, they were completely up front and just said [they] don’t have enough resources, which is pretty astonishing for an international law firm.”

“It has to do with quality and price. We paid thirty or forty thousand euros, more or less for nothing. So, they had to go.”

“The main client relationship [partner] left the firm. I find that often when partners leave, those firms neglect to contact clients to say we still want your business and we have signed a new relationship manager. They tend not to correspond with you. Yet the partner who leaves always contacts you from the new firm.”

“There was a severe lack of relationship between what the bills were and what the value delivered was.”

So what’s the solution here? Now that lawyers and their firms are aware of the problems — and don’t lie, you already knew about all of these problems — perhaps it’s time to offer corporate clients the chance to give outside counsel feedback throughout the representation, instead of just sending out invoice after invoice.

The practice of law isn’t just about money. It’s about relationships, too, and these survey results prove it. Try and repair your rapport with corporate clients, before your firm gets screwed over by yet another partner who’s already lateraled out.

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Why Clients Fire Firms [American Lawyer]
Four Reasons Why GCs Fire Their Law Firms [ABA Journal]

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