Large law firms need to do more if they want to retain corporate legal work, survey shows
Big law firms will need to do better at understanding their corporate clients if they want to slow the drift towards using in-house legal teams.
A survey (details in LawFuel 'Releases') of more than 100 businesses on both sides of the Tasman shows that nearly a third of New Zealand respondents expect to reduce their reliance on large law firms over the next two years. Just 17 per cent expect to increase their reliance on big firms.
None think they will reduce the size of their in-house legal teams, and more than half expect their in-house legal teams to grow.
When asked what law firms could do to improve their relationships with businesses, the most commonly cited factor was a better understanding of clients' needs.
The survey - jointly commissioned by the Australian and New Zealand corporate lawyers' associations - canvassed the leaders of in-house legal teams, the people usually responsible for sending legal work outside the company.
The survey shows most complex legal work is still outsourced.
But Helen Mackay, president of in-house lawyers' network the Corporate Lawyers Association of New Zealand, says there is a growing trend for businesses to do more legal work themselves.
This includes complex project and transactional work, which is sometimes carried out as a partnership between internal and external legal advisers.
Mackay says cost savings are the number one reason for holding on to legal work, but a perception that in-house counsel better understand a business is also a factor.
"[As an in-house lawyer] you end up being somewhat more than a legal adviser, because you know the business so well," she says.
"You're much more of a strategic adviser as well.
"Given that there is this competitiveness now with law firms, a law firm that doesn't take the time to truly understand the client, and what the client needs, will find that they will not be receiving instructions."
Senior Advisor (Tax and Legal), National Technical Training and Development, Office of the Chief Tax
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