The findings of the report revealed American corporations spend a
sizeable proportion of their legal budget (20-30%) on foreign law firms
outside their “domestic” market. International firms in Western Europe,
with strengths in intellectual property, that can “get the job done” and
have been recommended by other in-house lawyers are attracting the most
work from the Americas.
The report is based on responses received to a confidential, online,
quantitative survey, carried out between January and February 2012. The
survey of 157 in-house counsel in Canada, the U.S. and Latin America
shows that Western Europe is still the most important market for them;
it attracts the largest share of American corporate legal budgets—more
than 15% spend more than 30% of their legal budget in the region—closely
followed by Asia, with nearly 10% spending more than 30% there. As more
companies expand into Asia, their legal spend also looks set to grow,
with 40% planning to increase spend there, and 20% planning to increase
spend in Western Europe too.
The most important reason given for selecting foreign firms was that
they have expertise local firms do not (74% rate as very important).
This is also the winning factor for local firms to get hired - 51% rate
market knowledge and experience as very important.
Intellectual Property (IP) is outsourced most regularly to foreign firms
as companies endeavour to protect their IP rights in foreign markets,
with 40% using foreign firms for at least one fifth of IP work.
Litigation and employment law also attract a considerable share of the
legal spend—around a third use foreign firms for at least one fifth of
their litigation and employment work.
The best way to get instructed is through a recommendation from other
companies, as 87% of in-house lawyers firstly approached peers in other
organisations. Alternatively, international law firms should also try to
form relations with a company’s principal law firm, as respondents in
56% of cases approached existing advisers to help identify and instruct
foreign law firms.
Derek Benton, director of International Operations at
Martindale-Hubbell, commented: “Interestingly, websites, seminars,
conferences, internet searches and legal directories were equally
important in the selection process, with a third of those surveyed using
them as sources in the initial selection of a lawyer or law firm in an
As in previous surveys by Martindale-Hubbell, “The
Selection and Retention of Law Firms in Western Europe”, the same
key selection factors feature at the top of the list: understanding
business needs (56%), individual expertise, communication (68%) and
industry knowledge (50%). The Americas differ slightly in that their
primary emphasis is to choose a firm that can “get the job done” (rated
very important by 85% of respondents).
Corporates allocate high profile non-recurring matters to both foreign
and international firms in 59% cases and in a quarter of cases to just
international firms, which sees them winning more of this type of work.
In contrast, local law firms are more likely to be given routine and
commodity matters (59%). For complex matters, the two types of firm are
used interchangeably winning equal amounts.
Many clients hire foreign law firms on an ad-hoc basis (46%). Law firm
panels are only used in around one third of cases, and past instructions
are not guaranteed to result in future work. Consequently, half of the
in-house counsel surveyed prefer instructing clients in foreign
jurisdictions on an hourly rate or project-by-project basis.
Possibly because the majority of firms are appointed on an ad-hoc basis
for specific projects, few have seen their relationship terminated
(55%). In cases where this has happened, it tends to be as a result of
poor service standards (64%), rather than legal capabilities.
Download the full report
To download a free copy of the full report: “‘The Selection and
Retention of International Law Firms by organizations located in North
America and Latin America”, visit: http://bit.ly/M7dUWn.
About LexisNexis Legal & Professional
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Martindale-Hubbellή helps international law firms to enhance their
online presence and drive more prospect enquiries through professional
profiles on martindale.com and coordination of
Martindale-Hubbell lawyer ratings. martindale.com is a leading
online law directory with over 9 million unique visitors every year.
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