A Discussion with Senior Executives
By Dan Ruderman
What Metrics Matter
Over the past several decades, we’ve experienced a sea change in the way in-house legal and claims depart- ments think about contract- ing with outside counsel for legal services. Once upon a
time, hiring a law firm basically consisted
of meeting with a lawyer and asking for
his or her help. Then the bill came and you
paid it when you could.
In time, corporate customers learned
to ask how much it would cost to hire a
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lawyer or firm, and the answer was generally a function of some hourly rate times
the number of hours needed to do the
work. As a result, clients began to compare
law firms by their hourly rate. If it was a
small matter, you wanted a low hourly
rate. For a large, bet the house matter, paying top dollar was a badge of honor because — so went the thinking — it showed
that you cared enough to spend the very
most. In both cases, the metric was the
lawyer’s hourly rate and it was easily
tracked by both the firm and the client.
In recent years, however, more and
more companies further embraced the fact
that they have significant buying power
when it comes to securing outside legal
services. They’re increasingly using that
buying power to negotiate lower rates,
establish Alternative Fee Arrangements
(AFAs) and revisit the metrics used to
evaluate outside counsel performance.
So in this brave new world, what new
metrics are needed? During the Council on
Litigation Management conference, a small
group set out to begin a discussion around
