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Jan. 14 — Complex, high-rate legal work is coming back into the marketplace, creating opportunities for law firms at a time when legal spending at large companies is relatively flat, a consultant said Jan. 14.
However, law firms will have to go out and actively find the work, because it's hidden amid the drop in legal spending, said Michael Rynowecer, blog author and president of professional services provider BTI Consulting Group, during a webinar.
This work is not going “to be raising its hand and saying, ‘Here I am,’” Rynowecer said. “Hopefully this is a ray of optimism and sunshine” after years of a very difficult and still challenging legal market.
While average legal spending at large companies declined in 2015, about 25 to 30 percent of spending on outside counsel went to new, complex and high-risk matters and cases, Rynowecer said.
For the first time in five years, in-house counsel have decreased internal spending, which directly correlates with the rise in new high-risk matters, he said.
Corporate counsel are saying they don't have the staff, skills and bandwidth to deal with these new matters quickly, so this spending is going out to law firms, he said.
In addition to finding this hidden high-rate work, law firms also face other obstacles, including their ability to show clients that they offer superior services, Rynowecer said.
The consultant observed that only one-third of corporate counsel said they would recommend their primary law firm first, down from 40 percent that said so a year ago. He added that these favored firms are in the best position to get the new attractive work coming into the marketplace.
In line with corporate counsel's declining satisfaction with their outside attorneys in 2015, companies increased the average number of law firms they worked with to 42, up from 36 in 2014, he noted.
Clients aren't getting what they want and are looking to new firms, Rynowecer said. The challenge for firms is to position themselves to get the new high-dollar work.
According to webinar materials, five proven tactics for winning high-margin work include:
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