Thirty-one percent of CLOs reported that they terminated at leastone law firm or outside counsel relationship for underperformingin 2016. Forty-six percent report that they either definitely(10 percent) or may (36 percent) terminate a law firm or outsidecounsel relationship with the intent to hire a new firm to performthe same work in 2017.
Delegation of legal operations expands Delegation of legal operations rose this year, with 23 percent delegating either full time or part time, up from 16 percent in 2016. Among those who delegate legal operations full time, 42 percent delegate to non-lawyers. Eighty-one percent of CLOs say they use value-based staffing practices such as assigning work to a variety of internal resources, including non-lawyers, based on complexity and risk. Forty-three percent of respondents report having at least one legal operations professional on the team, similar to the 48 percent reported last year.
Insourcing versus outsourcing Forty-eight percent of CLOs anticipate that the amount of work they send to firms will remain the same in 2017, while 31 percent will increase the amount of work outsourced and 18 percent will decrease it. Complex litigation remains the top area outsourced to law firms, with 97 percent of CLOs sending this work to an outside law firm. Law firms may see an increase in e-discovery work with 61 percent of CLOs sending this work to firms, up 16 percentage points from 2016.
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