06 April 2021
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90% of CLDs reduced their relationships with active suppliers last year

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The consequences of the pandemic for all professional sectors, in particular the legal sector, are well known

All legal actors have suffered through the pandemic, whether they are large law firms, individual law firms or corporate legal departments (CLDs)

Specifically, 90% of CLDs reduced their relationships with active suppliers last year, and 16% of relationships between lawyers and their clients were paused in 2020, according to the LegalVIEW® Insights report published by ELM Solutions, part of Wolters Kluwer. 

This report focuses on the analysis of the impact of the pandemic on the aforementioned legal players' relationships with their suppliers. The average number of external suppliers actively providing services to legal departments decreased by 12% year on year, and the average number of suppliers fell by 16%, compared to 2019.

"Last year, a significant number of relationships between law firms and their clients went dark: not a single legal invoice was sent in these cases. With the economy recovering, those gaps are going to be filled, but it won't always be by firms that lost business," said Nathan Cemenska, Director of Legal Operations and Industry Outlook for Wolters Kluwer's ELM Solutions and a big proponent of this report.

CLDs and law firms

The relationship between CLDs and law firms has always been close and more so in recent years. According to this report, in the last six years, 32% of CLDs sent half or more of their workload to the top 100 law firms in the world. Many of the CLDs send a more significant portion of their work to law firms.

CLDs generally rely on the help of their suppliers, with most of them consolidating 80% of their work with 20% or less of their suppliers, a recognised best practice that reduces administrative costs and creates opportunities for volume discounts. 

The pandemic has affected everyone, but most significantly small and medium-sized law firms, which have seen large firms expand their market share.

"Alternative legal service providers, the Big Four and competing law firms are hungry for that business, as are in-house legal teams, which continue to get better at doing the work themselves," recalls Cemenska.

ELM Solutions

ELM Solutions provides services for the management of corporate legal matters and expenses. It is a tool that helps firms to respond to the needs that arise in the legal departments of companies in order to increase efficiency and reduce costs. 

Read the LegalVIEW® Insights report.

Copyright © The Impact Lawyers. All rights reserved. This information or any part of it may not be copied or disseminated in any way or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of The Impact Lawyers. The opinions expressed in this article are those of the authors and do not necessarily reflect the positions or policies of The Impact Lawyers.
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