Are Companies Really Firing Law Firms?
Law.com affiliate blogger Rees Morrison takes up the question Are In-House Counsel Really Dumping Law Firms Abruptly? (Legal Times, 3/27/07). His response: It's hard to tell. Morrison says that there are many reasons that companies part ways with counsel. Sometimes law firms and law departments grow apart, key partners develop different practices or in-house counsel take over the work. Of course, sometimes firms are fired for blunders, such as high cost, poor communication and incompetence. In one instance, a company stopped using a firm that would not complete a company's diversity survey.
The trouble with surveys that report on law firm firings is that "they have done a lousy job obtaining reliable numbers and percentages. " They don't show if a company actually fired a firm, or just thought about doing it. And surveys don't show if it's smaller firms that were let go, either because their billings were small or they were just brought in for a single transaction.
It's no surprise that law departments decide, based on a single dramatic mistake or a series of avoidable missteps, to fire a firm. But despite the gaggle of surveys that have pronounced on this subject, the number of firms that a given law department fires each year is probably a small fraction of all of its law firm relationships. We need better surveys and clearer thinking for us to understand the actual incidence of abrupt terminations of law firms and the performance- or capability-related causes of those firings.
In my view, whether the surveys are right or wrong is irrelevant. The fact that companies do fire firms, even if it's a far smaller percentage than reported, or think about doing so shows that there's still dissatisfaction with how firms are performing. If I were a partner at a large firm, I wouldn't be spending my time analyzing these surveys; I'd be surveying my own clients and finding out what I could do to better serve them.
Posted by Carolyn Elefant on March 29, 2007 at 06:29 PM | Permalink
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