The fact that concern for costs was ranked as the most important thing that firms can do to improve relationships with legal departments is no surprise.
“Understanding the need for cost control is incredibly important. It’s business survival,” says O’Reilly, citing the example of the continuous downtown that Alberta has seen in the energy business, which has resulted in so many businesses being constrained by cost. For Demone, while being upfront with cost is important, the most significant thing that firms can do to improve relationships with her department is to understand her business.
“The two probably go hand in hand,” she says. “I don’t want to waste money on explaining my business over and over. If you understand my business and you’re thinking proactively, not just about the issue I’m asking you to address but also the issue that will come next, then, for me, it’s worth the money.”
Nguyen agrees that firms should always be thinking about ways to improve the relationship with in-house clients and to deliver the best value, which will not always be cost related.
Although billable hours are the most popular type of billing arrangement that law departments have with their primary firm or external service provider, with a 70.07-per-cent majority, most respondents would consider alternative fee arrangements, with 66.42 per cent expressing an interest in using them. Currently, only 2.92 per cent of respondents use AFAs as their primary type of billing arrangement, with “discount” being the most popular type. According to O’Reilly, AFAs are necessary to ensure that value is shown to the business, and they may help to avoid the suggestion that legal is an expensive overhead as opposed to a cost-effective solution provider.