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Law Department Operations: What Comes Next in the Evolution of ‘For Services Rendered’?

Law department business and technology leaders come together with in-house counsel to discuss shifts in how law firms offer and deliver services –

Believed to have had its conception in 1914, the billable hour became prevalent among attorneys by the 1950s. General counsel, on the other hand, became prominent in multinational corporations during the 1980s. For complex legal work, the GC would hire a law firm and the law firm would bill for its services at the conclusion of the matter. And for a while, that is the way it went.

“When I first came into the industry, in the 1980s, we would get legal invoices for $250,000 that simply stated ‘for services rendered’,” Jeff Hodge, veteran law department leader and chief marketing officer for Quovant, told Legaltech News in an interview.

However, a fundamental shift began to take place as boards of directors demanded more understanding from their general counsel as to how exactly legal dollars were being spent. This shift has resulted in a long trail of legal technology development and the rise in the status and power of general counsel. This, in turn, gave way to the need to hire law department operations (LDO) teams and directors, which increased the department’s ability to buy technology and eventually see inside of legal matters, spend and the overall relationship with outside counsel.

“That demand has led us to a point where we have literally flipped the balance of power between law firms and in-house counsel,” Hodge explained. “It can be argued, to a large extent, that this shift is what is causing the disruption in the law firm services model. If this continues to be the case, where does that cause and effect eventually take us?”

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