Firms in Western Europe
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1 Selection and Retention of Law Firms in Western Europe Overview of Findings November, 2012
2 Agenda Methodology Key Findings Conclusions Research rationale and objectives Methodology Selection factors Retention factors and value-adds Key takeaways 1
3 LexisNexis Martindale-Hubbell Martindale-Hubbell helps international law firms to enhance their online presence and drive more prospect enquiries through professional profiles on martindale.comand coordination of Martindale-Hubbell lawyer ratings 10 million visitors in million unique visits in million views of law firms and lawyers in Western Europe 138,000 monthly views Research studies are international in nature; covering individual or multiple geographies and examine topics related to winning new business and client retention. 2
4 Research approach Understand most important law firm selection factors and panel relationships What determines successful, long-term relationships Factors influencing retention of firms for future work Top reasons for removal from panels Approaches by in-house counsel to evaluate performance Value-adding elements Structured, online survey (anonymous) amongst 219 in-house counsel across 16 Western European countries Undertaken in association with The Global Legal Post 3
5 Takeaways and issues Law firm selection criteria Do Partners and Marketers know the top buying factors that IHC use and the importance of these? Proving expertise Do your firm s marketing communications reflect the most important selection criteria and prove relevant expertise? Successful relationships How do you communicate/keep in touch with your clients? Do these add value to the relationship? 4
6 Location of respondents UK 12% Belgium 11% Switz 6% 6% 8% 9% 9% 11% 11% 12% Austria Germany Denmark Switzerland France Belgium Spain UK 5 Spain 11% France 9% Switz 9% 1% 1% 2% 3% 4% 4% 5% 6% 6% Luxemburg Ireland Portugal Netherlands Sweden Norway Finland Italy Austria
7 Respondents by role type 58% Chief Legal Officer / Head of Legal 40% Other GC 2% CEO / CFO 6
8 Respondents by annual legal budget and proportion outsourced Annual legal budget % spent on external law firms Up to 100,000 10% Up to 10% 11% 100, ,000 19% 11-20% 5% 351, ,000 10% 21-30% 11% 501,000-1 million 14% 31-40% 17% 1 million million 26% 41-50% 12% 5 million million 6% 51-60% 14% 10 million - 25 million 10% 61-70% 10% 26 million - 50 million 3% 71-80% 8% 51 million - 99 million 1% 81-90% 6% More than 100 million 1% More than 90% 6% 7
9 Respondents by size of department 1 lawyer 15% 2-5 lawyers 34% 6-20 lawyers 28% lawyers 11% lawyers 7% More than 101 lawyers 5% 8
10 Factors that determine law firm selection Personal relationship with lawyers Law firm size/location of offices Law firm's expertise/reputation Work as extension of our legal dept Previous experience working with our company Cost/fees/hourly rates Trusted advisor/not just legal technician Client service/responsiveness/communication Lawyer expertise/reputation Speed of response Understanding our business needs, objectives & culture 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not at all important Not important Neutral Of some importance Very important 9
11 The importance of personal chemistry The right combination of legal advice/common sense/business approach, the ability to inter-relate with others. Energy/Utilities/Infrastructure sector, France Chemistry, fees, understanding of the business. Chemicals/Pharmaceuticals/Healthcare sector, Austria Professionalism: on website, in response on first approach and in personal contact. FMCG/Food/Beverage Producers/Processors, Denmark Value for money and personal chemistry. Administration services sector, Netherlands Nice guys. Finance/Insurance/Investments sector, Austria 10
12 Involvement and responsibility for law firm selection Involvement by role type Responsible for purchase decision Chief Legal Officer / Head of Legal 83% Chief Legal Officer / Head of Legal 66% Other General Counsel 48% Other General Counsel 25% CEO / Chairman 23% CEO / Chairman 5% Heads of Business Units 19% Heads of Business Units 3% Chief Financial Officer 18% Chief Financial Officer 1% Procurement Department 5% Procurement Department 0% Chief Risk Officer 3% Chief Risk Officer 0% 11
13 The number of external law firms used Number of firms currently used Change in number of firms used 1-4 law firms 29% Remain the same 55% 5-9 law firms 23% law firms 24% Increase 18% law firms 10% law firms 5% Decrease 17% law firms 2% 75+ law firms 5% Don't know 10% Do not know 2% 12
14 Use of panels Use of panels Frequency of panel review Every year 28% No 72% Every 2 years 35% Every 3 years 35% Yes 20% Every 4 years 3% Every 5 years 0% Do not know 8% More than 5 years 0% 13
15 Factors that determine the retention of firms Quality of the team as a whole 80% Knowledge of my business 76% Cost details and approach to billing 71% Approach to matters at hand 66% Details of lawyers' experience 62% Relationship/chemistry 51% 14
16 Factors that determine removal from a preferred list Poor service 93% Not understanding the company's needs 78% Unfair/unclear billing 58% Poor communication 57% Underestimating costs 41% 15
17 Importance of added-value offerings in relationship development Free review meetings; e.g. quarterly or half yearly Providing secondees/arranging staff exchanges Upgrading extranet/information sharing facilities Providing additional free training/seminars 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not at all important Not important Neutral Of some importance Very important 16
18 Conclusions Show that you understand selection criteria Demonstrate understanding of their business needs, objectives and culture Show individual lawyer expertise Prove speed of servicedelivery and a structured approach to keeping in touch with your clients Target marketing programmes and communications to reflect criteria 17
19 Conclusions Care for your clients and communicate! It may be obvious firms need to do a better job at keeping in touch with their clients Lack of communication between law firm andin-house counsel will be costly if not addressed 18
20 Download the full report Download the full report for free: 19
21 Any questions? Questions and Answer Session 20
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