When and why will in-house teams choose NewLaw firms?
The reasons why in-house legal departments will utilise a NewLaw firm have evolved over the past year, but there remain numerous barriers to choosing such firms for work, new research has shown.
The 2019 In-House Counsel Trends Report, undertaken by the Association of Corporate Counsel Australia, was completed in August of this year by 363 respondents from across a range of industries, and aims to provide insight into “consistent and emerging challenges, working conditions and practices” of and for in-house legal teams across the country.
Over the past three years, ACC noted, knowledge about NewLaw business models has increased, with the number of in-house counsel now using such models almost at two in five (38 per cent). The most popular models adopted are lawyer replacement agencies (23 per cent), fixed fee firms (20 per cent) and legal processing outsourcing (10 per cent).
When asked about the reasons for choosing a NewLaw firm, the most popular responses were that such firms can meet stated requirements at certain times (45 per cent), increased flexibility (45 per cent), improved value (40 per cent) and lower cost base (37 per cent).
These reasons differ from those given in 2017, at which point in-house counsel stated they would choose NewLaw firms because of a greater choice of services (45 per cent), more effective use of technology (44 per cent) and different fee models (40 per cent).
While the reasons for choosing NewLaw firms may have changed, the barriers to uptake have remained largely similar to the reasons given in 2018.
When asked why an in-house team would be reluctant to go with a NewLaw option, respondents said they were satisfied with their current law firm relationships (35 per cent, up from 32 per cent last year), lack of time to understand all the offerings (39 per cent, up from 24 per cent), quality concerns (22 per cent, up from 19 per cent) and lack of time to build relationship with a new firm (21 per cent, up from 18 per cent).
A “recurring theme”, ACC said about the stated barriers, was a lack of time.