ACC/TAL 2010 General Expenditure Questions 11/17/2010

Under Over
In 2010 how much will your company spend $1,000,000, $1,000,000,
on outside legal counsel? Total 000 000
$0-$100,000 16.4% 22.0% 2.4%
$100,001-$500,000 23.4% 31.9% 3.9%
$500,000-$1,000,000 14.2% 17.7% 8.7%
More than $1,000,000 45.9% 28.4% 85.0%

In 2010, approximately what percent of your

outside counsel spend is or will be valued
through an arrangement that is not based
solely on hourly, discounted or blended rates,
but which includes fee arrangements
incorporating incentives, caps, alternative Under Over
providers, pricing fixed by stage, matter, $1,000,000, $1,000,000,
portfolio, contingency arrangements, etc.? Total 000 000
0-5% 52.8% 55.3% 44.5%
6-10% 13.6% 12.4% 17.2%
11-15% 7.2% 6.4% 10.2%
16-20% 5.8% 6.4% 6.3%
21-25% 5.1% 5.7% 4.7%
26-30% 2.5% 2.1% 3.9%
31-40% 4.0% 2.1% 4.7%
41-50% 3.4% 4.6% 1.6%
51+% 5.6% 5.0% 7.0%

In 2010 approximately what percent of your

company's matters handled by outside Under Over
counsel included such alternative $1,000,000, $1,000,000,
components? Total 000 000
0-5% 56.0% 57.5% 49.2%
6-10% 14.5% 13.4% 18.0%
11-15% 6.3% 6.0% 8.2%
16-20% 6.6% 5.2% 9.8%
21-25% 3.7% 4.5% 3.3%
26-30% 2.1% 1.9% 2.5%
31-40% 1.9% 1.9% 0.8%
41-50% 3.5% 3.4% 4.9%
51+% 5.4% 6.3% 3.3%

Compared to 2009, has work billed on other Under Over

than an hourly rate basis increased, $1,000,000, $1,000,000,
decreased, or remained the same? Total 000 000
Increased 29.3% 26.3% 37.8%
Decreased 8.6% 8.5% 7.9%
ACC/TAL 2010 General Expenditure Questions 11/17/2010

Stayed the Same 62.2% 65.1% 54.3%

If you anticipate an increase or decrease for Under Over

question 4, please estimate the percentage $1,000,000, $1,000,000,
increase or decrease: Total 000 000
31%+ Decrease 1.9% 2.3% 1.5%
21-30% Decrease 1.9% 1.5% 3.1%
11-20% Decrease 1.9% 1.5% 1.5%
1-10% Decrease 2.4% 1.5% 3.1%
0-10% Increase 52.6% 47.7% 60.0%
11-20% Increase 23.2% 26.9% 18.5%
21-30% Increase 8.5% 9.2% 7.7%
31+% Increase 7.6% 9.2% 4.6%
ACC/ALM 2010 Fee Arrangements 11/17/2010

In 2010 how much will your company

spend on outside legal counsel? 2010 2009
$0-$100,000 16% 13%
$100,001-$500,000 23% 24%
$500,001-$1,000,000 14% 14%
More than $1,000,000 46% 49%

In 2010, approximately what percent of

your outside counsel spend is or will be
valued through an arrangement that is
not based solely on hourly, discounted
or blended rates, but which includes
fee arrangements incorporating
incentives, caps, alternative providers,
pricing fixed by stage, matter,
portfolio, contingency arrangements,
etc.? 2010 2009
0-5% 53% 55%
6-10% 14% 14%
11-15% 7% 6%
16-20% 6% 6%
21-25% 5% 4%
26-30% 3% 2%
31-40% 4% 3%
41-50% 3% 3%
51+% 6% 6%

In 2010 approximately what percent of

your company's matters handled by
outside counsel included such
alternative components? 2010 2009
0-5% 56% 59%
6-10% 15% 12%
11-15% 6% 5%
16-20% 7% 6%
21-25% 4% 4%
26-30% 2% 2%
31-40% 2% 2%
This is question 4
41-50% 4% 3%
51+% 5% 7%
ACC/ALM 2010 Fee Arrangements 11/17/2010

Compared the previous year, has work

billed on other than an hourly rate
basis increased, decreased, or
remained the same? 2010 2009
Increased 29% 39%
Decreased 9% 8%
Stayed the same 62% 53% Asks regarding
previous question.
If you anticipate an increase or
decrease for question 4, please
estimate the percentage increase or
decrease: 2010 2009
More than -30% 2% 2%
-21 to -30% 2% 0%
-11 to -20% 0% 3%
-1 to -10% 2% 3%
0 to 10% 53% 42%
11 to 20% 23% 23%
21 to 30% 9% 13%
More than 30% 8% 13%

What kinds of alternative fee arrangements

have you used in 2010? (check all that
apply) 2010 2009
Flat fee for an entire matter 53% 48%
Flat fees for some stages of a matter 34% 36%
Contingency fees 20% 19%
Incentive or success fees 18% 19%
Disincentive or failure fees 3% 2%
Collars, caps, etc. 30% 25%
Periodic retainer fee for a portfiolio of
services 18% 20%
None 22% 24%
Other 5% 7%

If your outside firms have used alternative

staffing arrangements this year, please
indicate which they have used: (check all
that apply) 2010 2009
Secondments 12% 10%
Shared staffing 4% 3%
Work outsourced to a third party and
handled by non lawyers 10% 8%
Work outsourced to a third party and
handled by lawyers 12% 10%
Work handled by contract lawyers at the
firm and/or in the legal department 13% 18%
ACC/ALM 2010 Fee Arrangements 11/17/2010

None 67% 67%

Other 1% 1%

If applicable, who initiated the alternative

fee arrangements that you used in 2010? 2010 2009
The law department 51% 54%
Law firms 3% 3%
Some of both 20% 18%
Does not apply 26% 26%

Do you think that more or fewer firms are

willing to discuss changing their fee or
service structures to offer you alternative
arrangements? 2010 2009
More firms 61% 64%
Fewer firms 4% 3%
About the same 21% 17%
Don't know 15% 16%

Have you ever started working with a new

firm because they offer alternative services
or fee arrangements? 2010 2009 NEW QUESTION
Yes 26% N/A
No 74% N/A

Have you ever stopped working with a firm

because they didn't offer alternative
services or fee arrangements? 2010 2009 NEW QUESTION
Yes 13% N/A
No 87% N/A

In 2010, did you require some of your

firms to: (check all that apply) 2010 2009
Cut back their proposed hourly rates 38% 34%
Offer discounts on billable hours 61% 54%
Offer alternative fee arrangements 39% 31%
None of the above 24% 31%

If you have not used alternative fee

arrangements in 2010, do you plan to try
to implement them in 2011? 2010 2009 NEW QUESTION
ACC/ALM 2010 Fee Arrangements 11/17/2010

Yes 24% N/A

No 18% N/A
Not Applicable 58% N/A

In your judgment, what is the biggest

reason why there have not been more
alternative fee billing arrangements? 2010
Law firms are comfortable with the billable
hour 17%
Clients are comfortable with the billable
hour 5%

Many law firms and clients have insufficient

experience defining or managing work on
an alternative fee basis 37%
Alternative arrangements are too difficult
to negotiate or stick to 7%
Law firms are unwilling to participate in
alternative arrangements 8%
Absent better metrics and data, it is
difficult to detemine alternative values 20%

Alternative fee arrangements are too risky 2%

Other 4%

In what practice areas have you used

alternative fee arrangements? (check all
that apply) 2010
Litigation 47%
Transactional 46%
Compliance 20%
IP 24%
None 19%
Other 10%
ACC/ALM 2010 Demographics 11/17/2010

Your job title

GC/CLO/VP of Legal 91%

Deputy GC/Assistant GC/Associate GC 4%

Other 5%

The number of lawyers working in your

company's legal department
worldwide:
0-5 69%
6-50 26%
51-200 5%
More than 200 1%

Law department budget:

0-500,000 29%
501,000-1,000,000 19%
1,000,000-25,000,000 45%
More than 25,000,000 7%

Annual gross revenue of your

company:
$0-$50,000,000 24%
$50,000,001-$500,000,000 30%
$500,000,001-$1,000,000,000 15%
More than $1,000,000,000 31%

Number of law firms with which your

company will spend at least $50,000
during 2010:
0 7%
1-10 68%
11-25 18%
26-50 5%
51-100 2%
More than 100 1%