Mark Chandler, the General Counsel of Cisco Systems, Inc. threw down the gauntlet to big law firms and rising rates in a recent speech. He asserts that law firms have not changed their practices while the technology has changed the ease of access, acquisition and use of information. As a result, law firms have become roadblocks because they restrict access through the inefficient “billable hour.”

“The legal industry has spent millions on IT to up speed access to information. But the only way I can get that information is through an individual billing me by the hour. My in-house team often has more sophistication than the associates who mine the knowledge management system to generate a memo. We’re just not allowed to access the information without paying for someone’s time.”

In his eyes, this failure to make information more accessible to clients, will be the downfall of big law firms unless the remedy the situation. Chandler warns that standardized legal information systems like Google Patent Search will spring up to challenge the current model of “one-to-one consultative advice.”

The driver is cost. Chandler says that when law firm’s raise rates, they are oblivious to the cost pressures corporate America face every day, and misperceive the value of their services.

“From the law firm think perspective, “sales” too often means a one to one relationship with a lawyer who bills by the hour. As a client, I can tell you what I want to buy is access to information, strategy, and negotiation, and, in the case of litigation, to courtroom skill as well.”

Think he is crazy? Cisco does almost all of its legal work on a fixed fee basis, and has been paying less each year rather than more. He works with law firms in a number of ways to reduce costs, create efficiency, and improve service. Now how are you going to respond to his model before someone else does?