If you missed our Lunch & Learn on May 19, our CEO, Basha Rubin, and I presented findings from Priori’s 2021 Legal Departments Survey. We reviewed the data and had a terrific discussion about the current state of legal departments’ outside counsel processes.
Some key takeaways:
Manual Processes Dominate Despite Perceptions of Efficiency
One of the motivations for conducting this survey was to learn about the current “analog” processes in-house legal departments are using to find and engage outside counsel. Our data found that, for most of the survey’s 133 corporate legal respondents, these processes are fairly rudimentary and time-consuming.
Nearly all—86%—said they go to external colleagues for lawyer recommendations. More than half said they use law firm website research to find lawyers, and half also said they rely on recommendations from internal colleagues. In terms of approaching external and internal colleagues about hiring outside lawyers, 78% said they ask by sending an individual email, and 45% reach out via a phone call.
Basha and I discussed how much time these manual processes must be costing legal departments, even while 47% of respondents said they thought their processes for finding outside counsel are efficient.
Lawyers Consult Colleagues, But Reviews Are Underutilized
We found it encouraging that so many respondents said they value the views of external and internal colleagues when seeking lawyer recommendations. But this seemed to be in tension with another survey finding: few respondents said that external and internal reviews of attorney performance were a top decision-making factor when selecting outside counsel. (Only 14% and 11%, respectively, said such reviews were among their top three considerations.)
Basha and I talked about how this is likely not because in-house counsel don’t care about attorney reviews when evaluating whom to hire. Rather, Basha pointed out that there is a lack of systematization of external and internal reviews on past attorney performance, one of the many opportunities for better data and technology in this space.
Tech Hasn’t Optimized Outside Counsel Engagement...Yet
And, speaking of technology, we discussed the lack of it in the outside counsel process overall. In addition to the fact that few organizations have created routine, systematic feedback loops and analysis of attorney reviews, the bulk of information driving attorney hiring is subjective rather than data-focused. Nearly half of respondents said they prioritized personal relationships in outside counsel hiring, and 35% said firm reputation is a top consideration.
Only 12% of respondents said they use legal information services like litigation analytics that would introduce some data to the process of evaluating the best outside attorney for the job.
Basha and I discussed the implications of this subjective decision-making. It can hinder legal department goals on achieving diversity metrics, for example, since humans naturally tend to form personal relationships with people like themselves. And it’s increasingly at odds with mandates to be more data-driven, which 51% of respondents agreed was an imperative in their legal department.
Basha shared some ideas for changes to look for in the industry relative to outside counsel. Making internal reviews routine and systematic is a worthy goal for legal departments, but implementation could be a challenge, as would any large knowledge management project.
Organizations will also become more engaged in tracking ROI on lawyer engagements and formalizing a feedback cycle with law firms.
The industry will continue to rely on surveys to tackle the diversity & inclusion problem in outside counsel, but making this data optimally useful is a frontier for legal technology to help conquer.
We also think there’s bound to be more technological advancement to resolve some of the inefficiencies in this space. One way for corporate legal departments to ensure they’re getting the products they need, Basha said, is for them to engage with vendors (like Priori!) and let them iterate to create and perfect the tools that can help.