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Globality

New research: boutique law firms may have an edge with larger clients

A new survey survey reveals that business leaders at large companies, frustrated with high law firm fees, are turning to SMEs and specialized providers.

The Economist Intelligence Unit surveyed 100 senior business leaders with responsibility for spend on outside legal counsel at multinational companies with annual revenues of over $1 billion in the US, UK and Europe. The research sought to better understand their relationships with external law firms. Read the full report to learn about trends in legal spend and forward-looking priorities for leading legal departments around the world.

 

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Key insights

  • Nearly half (48%) of business leaders who primarily work with legal and compliance professional service providers say cost is among the main challenges their firm experiences with outside legal counsel.
  • Despite the pressure to reduce costs, 40% expect spending on smaller service providers to increase over the next five years, and almost three-quarters (74%) of respondents believe SME service providers with fewer than 500 employees will have an important role in their firms five years from now.
  • Almost all (85%) of respondents dealing with the legal sector said service providers with specialized expertise will be more valuable to their firms than providers with a broad range of offerings five years from now.
  • Over half (54%) of respondents said a stronger value proposition is the reason they would choose to work with SME service providers instead of large law firms in the next year.


"With the pressures on budgets, those relationships [with existing service providers] come under a lot of pressure… Part of the job of in-house counsel is to get the best value for money spent. The big law firms don’t seem to realise that they're charging an enormous amount of money for work that other people can provide for a lot cheaper."

-Michael Ellis, group general counsel at Abercrombie & Kent