In-house driving changing legal procurement methods

As we all know legal procurement is a rapidly changing process. Of all the mooted ‘reinventions’, ‘remodellings’, ‘overhauls’, and so on, of the legal industry, it is perhaps changes in how in-house lawyers go about procurement that will have the greatest affect on the overall industry.

We’ve already interviewed Mark Cohen at Clearspire, and earlier this month I interviewed Nick West at Axiom – this interview will be published later this summer. Companies like Axiom and Clearspire are at the forefront of changes to the way in-house hire external counsel – whether that be via ‘freelance lawyers’, a virtual law firm or innovative reinterpretations of the law firm model in general. It seems, though, that in-house lawyers are now increasingly seeing the appeal of these sorts of companies, as they generally begin to look at alternative means of legal procurement more seriously.

According to an article in the Financial Times this week, the majority of in-house lawyers at ‘large multinational companies’ are now looking at alternative means of procurement. With it becoming a priority for many in-house lawyers to look beyond the traditional law firm model, especially hourly billing, it has become apparent that law firms will now have to think differently about how they go about winning new clients. Furthermore, legislation that “liberalised” the UK “£25bn legal market” has allowed companies that that are not law firms to provide legal services, increasing competition and scope for innovation. At the same time, the legislation also allowed law firms to take investment from third parties for the first time, possibly allowing law firms themselves to have more freedom to be more innovative.

“Nearly two-thirds of general counsel at some of the world’s biggest businesses have already used so-called contract lawyers rather than their traditional law firms, according to a poll of 185 in-house lawyers around the world with a collective legal budget of £3.5bn,” reported the FT.

This figure has apparently risen to 74% when respondents were asked if they were likely to use contract lawyers over the next 5 years.

With in-house lawyers looking at contract lawyers to such an extent, it appears that the hype about legal revolution may be finally gaining some substance. It also fuels the longstanding suggestion – often made on this website – that in-house lawyers are going to be the most important of drivers of change in the law.

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About William Barns-Graham

William is the content manager and head of communications at GC Research Club. He is a professional journalist, researcher and strategist. He has worked at GC Research Club since February 2013 and has rapidly become a distinguished voice in the in-house legal blogging community, writing on Lexis Nexis and interviewing leading legal thinkers and writers, in house lawyers and CEOs within the legal tech world. He has also coordinated the GCRC Sports Panel series.
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