As the global economic downturn continues, in-house and law firm lawyers have to adapt to survive.
A recent post available exclusively within the CEE Research group, of Martindale-Hubbell Connected provides new primary research insight into how the heads of 65 major companies in Russia are adapting to meet the current challenging economic climate.
Originally presented to the IBA Law Firm Management conference held in Moscow recently, this preliminary research was produced by Jeffrey Forbes of The Forbes Institute and was sponsored by LexisNexis Martindale-Hubbell.
The findings raise two very interesting issues; firstly Fixed fee billing is now more than ever sought after by in-house counsel in Russia as a way to save money and predict costs. And this push to limit the billable hour came about purely by market forces and was not some initiative organised by any in-house association such as the ACC’s ‘value challenge’ in the US. Jeffrey learned that law firms we largely responding to clients’ requests, probably because they had little choice.
Secondly, Jeffrey’s view is that many, if not most, law firms in Russia, CIS or CEE, have still not grasped the wider implications for their business model of switching from billable hours to fixed fees. In his words,
‘If you are still thinking in terms of selling time (i.e. predicting hours plus costs for any budgets) then you are missing the bigger picture. Because those “evangelists” who advocate not billing by the hour (I don’t mean in-house counsel) argue that selling time has no value.
Instead, they suggest, the lawyer has to learn to have ‘fuzzy’ discussions with clients about the ‘value’ they propose to deliver for an agreed price.
And this requires not only a different mindset but also a much more entrepreneurial approach to the business of law.’
To review the full post, visit the CEE Research group in MH Connected (registration required). The full research findings will be available early next month – exclusively in MH Connected.