What do in-house counsel want from their law firms?
What do in-house counsel want from their law firms?
Unsurprisingly almost all the respondents (99%) expect advice from their law firm on the legal merits of pursuing a claim and the chances of success.
Some have shared with us their disappointment in the lack of active outreach from law firms with the latest cases relevant to their sectors or organisation which they could consider as part of their litigation strategy.
It is obvious that in-house counsel are looking for more extensive conversations with external advisors about funding. Clearly, law firms could be more proactive in this area by providing more substantive and helpful technical guidance for in-house departments to make the most of the potential opportunities.
64% of respondents said they would benefit from support from their law firms in understanding funding options available to them.
“What I need is a solution….not a theory or 15 pages of advice on the different ways in which I can approach a problem… I need to provide a solution to the business.”
- Belinda Lucas, Head of Legal, Verisure
Would like help from law firms to understand available funding options.
“I would like them to be much more proactive than they are, to be honest…. (...) That's really interesting to have law firms bring these opportunities to me and be able to assess them”
One General Counsel at an e-commerce organisation shared with us.
Very few General Counsel are turning to their law firms for guidance about litigation funding. In-house counsel may use their law firm for advice on the suitability of a claim for funding (18%) and to help with briefing the board as to funding of claim. However, only 8% use their law firms to structure the best litigation financing deal and a similar number (7%) ask law firms to find them the best litigation financing deal.
In-house counsel typically conduct claims identification work internally due to costs and control factors. The research suggests that panel law firms are not employed for this purpose.
Most of the in-house counsel felt that additional support is needed from external advisors in terms of claims valuation (62%) and implementing effective project management for litigation (39%).
“One of the things I found useful [at Crafty Counsel’s Disputes Day] was to hear more about litigation funding. It’s not something that we have historically considered and I think to the extent that we had either a basket of claims and that option was there or a higher value strategic dispute then it is another option for funding that we would look at”
Director of Litigation, Large Enterprise
Alternative fee structures and managing the cost of litigation
Most law firms do not typically discuss alternative types of fee structures with in-house counsel, with 62% paying either discounted or full hourly rates to their legal advisors. 38% of respondents said their law firm did suggest different fee structure models.
Alternative fee structures with which legal teams are familiar include:
- Conditional Fee Agreements (CFA) - where the law firm takes no fee or a reduced fee in return for an increased fee, pending a successful recovery of damages by the claimant – 71% of respondents
- Damages Based Agreement (DBA) – Where the law firms takes no upfront fee in return for a percentage of the damages on a successful outcome – 50% of respondents
- Litigation funding structures was least familiar to legal departments – just 38% of respondents. The majority of respondents agreed that their law firm provides them with accurate and reliable budgets - with 64% agreeing vs. 36% disagreeing.
There is also acceptance however that it is difficult to predict accurately how much litigation will cost, with 68% believing that it is not possible to make an accurate forecast in advance as to the full cost. A third, 32%, felt that it should be possible for accurate predictions to be made.
Believe it's not possible to make an accurate forecast in advance as to the full cost.
