The Australian, 21 June 2013
The growing competition in the market for legal services has given Joanne Rees’s consultancy a growth area: helping companies keep their law firms in line.
Ms Rees, who is chief executive of Allygroup, is increasingly called in to review not just what companies are spending on legal services but who is doing the work.
By acting as a project manager for corporate clients, she claims to have shaved millions of dollars from corporate legal bills.
“I am frequently asked if the law firms hate me,” she said.
But as the general counsel of companies become aware of their new-found market power, Ms Rees is helping them assert that power.
Her position means she hears all the complaints that corporate clients have about their law firms.
Companies are demanding certainty about the cost and scope of work being handled by their outside lawyers.
They are also demanding that law firms stop giving their work to juniors and start allocating it to more senior lawyers who do not need to learn on the job.
“The sorts of complaints that most of our clients are making about what the firms are doing are around the failure to properly understand the scope of works and doing a lot of unnecessary work,” she said.
“The second major complaint is about inappropriate levels of people doing work. More and more clients are complaining about junior lawyers being engaged on projects.
“They are wanting to use senior associates or preferably partners.”
She said companies were prepared to pay for senior lawyers but “they do not want to be paying for them to be trained”.
She said corporate clients were increasingly interested in using contract lawyers for postings to in-house legal departments instead of spending much more for equivalent lawyers at law firms.
“It is about half the cost of what it might be if they were paying those hourly rates to law firms.”
There is also plenty of interest among corporate clients in legal process outsourcing – where Ms Rees’s consultancy acts as an intermediary to ensure that work being undertaken by providers is of acceptable quality.
Ms Rees said that government agencies seeking better deals from law firms were once Allygroup’s major source of business. But banks and insurers are now becoming an increasingly important source of work – particularly when it comes to managing large-scale litigation.
“They are realising that legal procurement and management expertise is very different to black-letter law expertise.”
Companies were finding that their in-house lawyers might not have the necessary skills to ensure outside law firms remained accountable, she said.