Corporate Counsel Dish on Outside Counsel Preferences, and the Landscape Favors Agile, Midsize Firms

Leopard Solutions Corporate Counsel Survey 2024 on Outside Counsel Selection

Leopard Solutions’ latest Corporate Counsel Survey offers key insights highlighting significant opportunities for midsize law firms to win business when competing against larger firms. With responses from a diverse range of in-house legal professionals, the survey provides a fresh look at the preferences of corporate counsel when it comes to hiring outside firms. The data reveals that expertise, cost-effectiveness, and responsiveness are increasingly valued over firm size, signaling a shift in how corporate legal departments approach legal outsourcing. This trend opens new doors for midsize firms to compete with BigLaw by playing to their strengths.

A Snapshot of the Survey

The survey, which launched in mid-August, has already gathered 175 unique responses from General Counsels, Assistant and Deputy GCs, Senior Counsel, and compliance professionals from various industries. While large companies dominate the participant pool—with 80% of respondents hailing from organizations generating over $1 billion in revenue—the findings still present major opportunities for midsize firms.

Corporate law remains the leading specialization among respondents, with Intellectual Property (IP) and Mergers & Acquisitions (M&A) each accounting for over 10%. Software, manufacturing, and financial services were the top three industries represented, underscoring the variety of legal needs across sectors.

Corporate Counsel Outsourcing Preferences

A key takeaway from the survey is that litigation remains the dominant area of outsourced work, accounting for 53% of the total. Corporate law follows at 17%, with labor and employment rounding out the top three at 9%.

When asked what they value most in outside counsel, responsiveness emerged as the top trait, with “understanding of my business” trailing behind in importance. This underscores the need for timely, accurate legal advice, particularly in high-stakes or time-sensitive matters.

Corporate counsel highly prizes three attributes that midsize firms often excel at—agility, specialized expertise, and efficiency. As larger firms focus on managing more complex, multi-jurisdictional matters, midsize firms can differentiate themselves through niche specialization and quicker adaptability.

How important are the following qualities when looking for outside counsel

How Midsize Firms Can Compete

One of the most encouraging data points for midsize firms is that value delivery was ranked as the top factor in selecting outside counsel, with 98% of respondents citing it as important. Interestingly, firm pedigree and legal guide references were rated much lower, with over a third of respondents saying firm prestige held little weight.

This presents an opportunity for midsize firms to win business by focusing on cost-effectiveness and targeted expertise, rather than trying to compete on reputation alone. Additionally, referrals and long-standing relationships remain critical factors in law firm selection, which gives midsize firms with established client connections a leg up in securing repeat business.

How important are the following in choosing outside counsel

The Decline of RFPs and Its Impact

The survey also revealed a slowdown in RFP (Request for Proposal) activity, with only 17% of respondents expecting the number of RFPs to increase this year. This could be due to economic uncertainty or a greater reliance on existing law firm panels. For midsize firms, fewer RFPs mean reduced competition and a better chance to stand out among a smaller pool of potential service providers.

In this environment, midsize firms can leverage client relationships and offer proactive, tailored proposals showcasing their expertise and cost advantages.

Leveraging Technology to Level the Playing Field

Advancements in legal technology also offer a way for midsize firms to compete more effectively. The survey found that corporate counsel increasingly seeks AI-powered tools and cloud-based platforms to streamline operations. Midsize firms that invest in technology—such as AI for contract review and document management—can position themselves as forward-thinking, efficient service providers.

Notably, the technologies most coveted by in-house departments are focused on internal efficiency rather than reducing headcount. Midsize firms adopting these tools can enhance productivity, increase responsiveness, and ultimately offer better value to clients.

Embracing Alternative Fee Arrangements

Another trend favoring midsize firms is the rising popularity of Alternative Fee Arrangements (AFAs). 96% of respondents use fixed or flat fees, while capped and blended fees are gaining traction. Midsize firms, which typically have lower overhead costs, can capitalize on these payment models by offering flexible, client-friendly fee structures that appeal to cost-conscious corporate counsel.

Opportunities for Midsize Firms Abound

The midpoint Corporate Counsel Survey data signals a shift in the legal services market that favors expertise, cost-effectiveness, and agility—all strengths of midsize law firms. As corporate counsel increasingly prioritizes value over firm size and pedigree, midsize firms have a unique opportunity to compete and win business. By leveraging their niche expertise, adopting new technologies, and embracing alternative fee arrangements, these firms can position themselves as serious contenders against the traditional giants of the legal industry.

With a thoughtful approach to client engagement and focusing on delivering cost-efficient, high-quality legal services, midsize law firms can effectively carve out their place in an evolving market.

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