Part 1: The Trends Driving Increased Utilization of Secondees by Corporate Law Departments
There has been significant and rapid change over the last 25 years in the way corporations procure legal services. Instead of having an institutional relationship with one law firm, clients are disaggregating legal engagements across a number of firms. They’re applying greater scrutiny to legal fees, employing legal spending analytics, and demanding alternative fee arrangements in an effort to derive more value from their legal budgets. Corporations are cultivating larger and more talented in-house legal teams. And they’re thinking differently about where and how to find outside talent.
The evolution of secondments, in particular, is notable. A secondment involves a seasoned, highly-skilled lawyer temporarily joining a corporation’s legal department for a predetermined project or period of time at a set rate. As we explained in a recent piece for Attorney At Work, in the past, secondees worked on-site with lots of internal oversight by in-house lawyers. That’s changing—which is good news for lawyers and corporations. Lawyers are gaining more flexibility and unique work experience. Clients are getting the hands-on, specialized expertise they need, often at a lower cost than traditional outside counsel and without the overhead associated with hiring more full-time staff.
The 2018 Altman Weil Chief Legal Officer Survey found that 86 percent of chief legal officers intended to continue to use or increase the utilization of secondees/contract attorneys in 2019. A significant factor driving this growth is the fact that corporate law departments are realizing returns on their investments in outside resources. In particular, the Altman Weil survey found that over 70 percent of corporate law departments report “significant improvement” in efficiency from their use of secondees/contract attorneys.
In this first installment of a two-part series on secondments, we will be exploring trends affecting the ways corporate legal departments are leveraging secondees, and how alternative legal services providers like Lumen Legal are facilitating their utilization.
Trend 1: Ad Hoc Utilization to Strategic Integration
In our experience of helping corporate law departments find and integrate qualified secondees, one of the driving forces that has led to the realization of greater efficiencies has been a shift from the ad hoc utilization of secondees to their strategic integration into in-house legal teams.
Secondees and contract attorneys used to be perceived as “gap-fillers” who could be plugged in to a corporate law department when, for example, an in-house attorney went on leave or existing capacity was stretched. For most companies, there was no overarching plan or strategy—merely urgent need—that guided the decision to bring in additional resources. The process was largely ad hoc.
Today, leaders of law departments are evaluating, planning for, and utilizing secondees more strategically. A number of factors are underpinning this trend:
More corporate law departments are relying upon legal operations specialists who are driving decisions to think and act more strategically when it comes to engaging secondees.
Outside counsel fees and overall legal spending are being more closely scrutinized, and more law departments have come to realize that secondees are a viable and more affordable alternative for many types of work that were previously outsourced to law firms.
Many talented and flexibility-minded lawyers are migrating from traditional law firms and looking for non-permanent positions that still provide them the variety and sophistication of work they desire. This deeper talent pool of potential secondees is being curated by ALSPs, giving law departments access to on-demand talent for short- and long-term assignments.
Put simply, having a strategic process in place to identify and utilize secondees with specialized experience and expertise allows law departments to address scenarios that aren’t the right fit—often from a cost standpoint—for an outside law firm but can’t be handled in-house due to limitations in capacity and/or existing skill sets.
For example, a large mutual fund company recently approached Lumen Legal with a need for a high-level attorney with both U.S. and international privacy experience to handle overflow work and special projects related to data privacy issues. The attorney needed to be able to work with senior clients on important contracts and be certified by the International Association of Privacy Professionals as a Certified Information Privacy Professional (CIPP). The work could be done on a remote basis, which allowed for a talented, nationwide candidate pool.
We were able to identify and place an attorney with the qualifications that our client was looking for, and as a result of having a secondee in place the client was able to realize approximately 60 percent savings relative to large law firm rates.
Trend 2: Single Use to Multi-Purpose
As law departments began to think more strategically about the utilization of secondees (i.e., Trend 1), the second trend, namely, utilizing secondees for multiple purposes, gained momentum. In the past, many legal departments only sought out secondees to provide replacement coverage for team members on leave. Today, they are expanding the use cases for secondees to include project-related work, additional capacity as an extension of their in-house team, and to take on tasks using ALSP secondees that were traditionally handled by outside counsel.
This trend isn’t necessarily being driven by a change in the nature of legal work, but rather as a consequence of strategically-thinking law departments realizing that there are new and effective (and often cheaper) sources of supply to meet the demands of the varied legal issues they must address.
Assuming that a law department is not in a position to fill a gap with a full-time hire, it makes a lot of sense to consider using more secondees for more purposes. Of course there are certain scenarios that call for the resources that only an outside law firm can provide, but many of the law departments we work with are realizing the benefits of having someone in place (whether working remotely or on-site) who is dedicating all of his or her attention to the company’s business and absorbing the nuances and intricacies of the company’s people and processes in a way that an outsider who is serving many different clients cannot.
More Trends to Come
Corporate law departments can realize a number of benefits by utilizing secondees, including lower costs and better work product. As the Altman Weil survey results make clear, more companies are coming to this realization and investing more resources in secondees. In this post, we addressed two trends underlying the growth in the use of secondees, including the shifts (i) from an ad hoc to a strategic approach to utilization, and (ii) from single use to multi-purpose utilization. Stay tuned for our next post in which discuss two more trends that will help you further understand the value and utility of leveraging more secondee and contract attorney resources for your business.
EVP Strategic Initiatives
Dave founded Lumen Legal 25 years ago. He enjoys providing his thoughtful, creative, and innovative counsel to law firms and corporate law departments looking to solve problems and reduce costs.
He also enjoys staying abreast of all developments in the legal industry and has contributed to the dialogue with two books: Legal Visionaries and Unbound: How Entrepreneurship is Dramatically Transforming Legal Services Today. He is a frequent speaker at conferences.