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Erik Ramanathan & John C. Coates, Corporate Purchasing Project: How S&P Companies Evaluate Outside Counsel (Harvard L. Sch. Program on the Legal Profession, 2011).


Abstract: This report marks the culmination of the Program on the Legal Profession's Corporate Purchasing Project—more than four years of scholarly research dedicated to examination of the ways in which S&P 500 legal departments hire and manage outside counsel, drawing from six academic papers. How are relationships between clients and service providers in the corporate legal market evolving, and why? Answering this critically important question requires both the availability of unbiased quantitative information about how large corporations make law firm hiring and assessment decisions and a robust qualitative and theoretical framework to evaluate broader variations and trends. This novel empirical data is drawn from surveys and interviews of 166 chief legal officers (“CLOs”) of S&P 500 companies—one-third of all such large publicly traded companies. Specifically, this paper explores four topics of substantial importance about which there is little systematic information: • How do these companies evaluate the quality of legal service providers when making hiring and legal management decisions? • Under what circumstances do these companies discipline or terminate their relationship with their law firms? • How do these companies evaluate whether to follow “star” lawyers when they change law firms? • In what ways do these companies manage the intersection between law and public relations?