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In-house counsel blast law firms in regional survey

An Asia Business Law Journal survey of in-house counsel in the region has revealed a shocking level of dissatisfaction with law firms that are failing to measure up to expectations on a scale that may surprise them.

More than half of 108 counsel responding from major companies in more than 10 of Asia’s premier jurisdictions have complained of poor service quality and overpricing from their external advisers.

The majority of in-house counsel surveyed expressed the importance of a harmonious relationship with their law firm counterparts, but added they had a negative view of their traditional pricing practices.

And the smackdowns didn’t stop at price and quality. Slow turnaround times and poor communication were highlighted by 47{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} and 40{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} of the respondents, respectively. Most in-house counsel submitted at least two complaints about the law firms they had used in the survey.

Disturbingly, although in smaller percentages, issues such as conflicts of interest (11{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a}), breaches of confidence (5{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a}) and even behaviour issues (7{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a}) were raised.

Other issues of concern included unmet expectations (32{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a}) and incorrect legal advice (21{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a}), while 5{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} cited lesser issues including poor use of technology and foreign language issues.

“The quality of the law firms in Hong Kong, even Magic Circle and Wall Street law firms, and their lawyers, even junior partners, have gone down dramatically over the years,” observed Raymond Goh, group general counsel, international at China Tourism Group in Hong Kong. “I’d be willing to pay more for better service quality and pragmatic advice.”

Erika Evasdottir, managing director at consultancy firm Centrium Advisory in Hong Kong, gets upset when law firms are unresponsive. “If we email you [law firms], respond immediately and set a timeframe for response, and then meet that timeframe,” she says.

Advice that’s too academic and impractical is a bone of contention for Kezia Pembayun, legal director at L’Oreal Indonesia in Jakarta. “This usually happens because the lawyers do not understand the clients’ business, or the market or industry where the clients are operating,” says Pembayun.

Other nuggets of interest in the survey include the greatest spend for counsel was allocated towards transactions and dispute resolution at 27{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} and 26{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} of legal spend, respectively.

Interestingly, when choosing a law firm, 57{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} of counsel said they looked for service quality, while just 10{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} put price as the key factor.

With payment methods, an overwhelming 61{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} of counsel prefer project-based billing, while 25{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} opt for a flat rate and just 7{e421c4d081ed1e1efd2d9b9e397159b409f6f1af1639f2363bfecd2822ec732a} prefer an hourly rate.

See the full details of our survey here