Pay for Associate Hours? More Companies Say 'No Thanks'

, The Am Law Daily


DHL and other companies are experimenting more often with hiring their own freshly-minted law school graduates, rather than paying a premium for young lawyers at outside firms.

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    While I understand and agree with Mr. Smolik‘s disdain for paying unreasonable rates for first and second year associates, I can‘t help but wonder if there isn‘t a reasonable compromise that could be achieved which could be a win-win for both his department and his law firms regarding this issue. Maybe DHL has attempted to find common ground with its law firms and failed to reach an acceptable agreement. I don‘t know. But as I read such bombastic headlines as this one, I can‘t help but wonder what the logical conclusion will be as a result of the continued assault by corporate clients on their own outside counsel. As a part of the e-billing industry for many years, I was often shocked at the fear expressed by corporate law and risk management departments at the idea of holding their law firms accountable for the cost of their legal services. We, as a vendor had to overcome significant client fear over the impact of a 3rd party review on the client and their outside counsel relationship. I have been away from the e-billing industry for 2 years. Suddenly, clients have grown some balls? The legal industry is often likened to an ecosystem, which requires balance to continue a healthy existence in its current form. It seems to me that bombastic announcements such as this and others that have recently made headlines are not helpful. Do clients as members of the legal ecosystem, who for so long failed to hold their law firms accountable in any way not have some, if not a great deal of responsibility for the state in which law firms are just beginning to recognize is no longer acceptable. General counsel are being squeezed by their CFO‘s because of the exploding cost of outside counsel spend. Who is to blame for the explosion of this budget line item? My experience tells me that prior to an e-billing solution, clients are paying law firms anywhere between 15% to 30% more than they should be paying. Where has the accountability been? Who has been responsible for monitoring and controlling this cost? I can tell you that nine times out of ten, no one is. Clients need law firms and law firms need clients. The relationship is and will evolve in this high tech, artificial intelligence world; but the interdependence will remain - at least for the foreseeable future. Shouldn‘t clients and law firms assist each other through the New World instead of attempting to blow it up because each of them thinks they can? Finally, and interestingly, all of this angst that is being reported about clients bold moves away from law firms, law firms dragging their feet on alternative fee agreements and alternative legal service providers impacts maybe 10% of the law firms in this country - maybe not even that many.

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