Law firms put under pressure by in-house counsel over costs

In-house legal teams are putting external law firms under increasing pressure to deliver better value and lower costs, according to new research.

The latest 'In-house Attitudes' report has found that 43 per cent of in-house legal teams have either changed or refreshed their legal advisers over the last year.

The main reason, cited by 62 per cent of in-house counsel, was to reduce costs, a figure up substantially from the 40 per cent of clients who highlighted cost as a major factor in 2014.

Some 48 per cent of in-house counsel said they had reviewed the law firms in order to address the issue of quality among their legal advisers.

However, the research suggests that the search for better value is not because in-house legal teams have a lower budget to spend.

The report shows there was a noted increase in the number of in-house teams with budgets over £1m - 40 per cent of all in-house teams versus 26 per cent in the last year.

Commenting on the findings, Jonathan Watmough, RPC's managing partner, said: 'This research shows that a rising number of in-house legal teams are finding the highest quality advice, given with proper commercial insight, without being confronted with the highest fees. They are achieving more for less.

'The law firms offering that better value have put in a huge effort over the last decade to recruit and continually train the best lawyers they can and this research shows they are reaping the rewards from that investment.'

The research adds that: 'Whilst the Magic Circle firms were mentioned on occasions, there were far more comments about a range of international, regional and smaller niche practices'¦ Food for thought.'

The report also found that, while most in-house legal teams felt well supported by senior management, some counsel felt perceptions of the in-house team could be improved. Only 56 per cent of in-house teams said they thought that senior management saw them as 'commercial'.

Watmough added: 'In-house teams are increasingly expected to advise boards on what is coming down the track in terms of things like regulation, the economy and the impact of changing legislation. Ensuring they get easy access to high levels of training is important so that they can continuously sharpen their commercial skills, as well as legal.'