Learn more about resourcing best practices in Part 1 of this three-part series on cost savings

If you’re involved with budgeting for a corporate legal department, chances are cost savings are on your mind. In light of the continuing economic uncertainty, your company may be looking at many different options to manage spend and reduce risk. 

In this three-part article series, we’re covering key cost-saving strategies that legal departments should be looking at to protect the bottom line. During our recent webinar, Basha Rubin, Co-Founder and CEO at Priori, Stephanie Wilkins, Editor-in-Chief at Legaltech News, and Carol Hopperton, Legal Chief of Staff at Vonage, discussed these strategies and provided insight into their potential impact for members of in-house legal departments, including in-house lawyers and legal operations professionals. In this article you’ll learn about the importance of staffing and work assessment, and the best practices for achieving cost savings.

Analyzing Your Legal Spend

Taking stock of your legal spend‌ is incredibly important and requires asking the right questions about how and where you’re spending your money. “We often see legal departments who are spending $20 million or $150 million or even more with outside counsel on an annual basis and the majority of it is going to Big Law firms,” says Rubin. “It’s usually a legal operations professional or general counsel who asks the question, ‘Does all that work need to be done by a Big Law firm? Is it all high risk and high complexity?’” 

One of the first things you should be doing when thinking about staffing is assessing the work you’re doing. It can be helpful to view these questions through the commonly used lens of people, process and technology: 

People

• What work is being done and by whom, internally and externally? 

• What work can be done by non-legal professionals that’s currently being done by internal or external counsel? 

• What work is not as high risk or high complexity and can be reallocated from Big Law firms to smaller boutique firms, temporary resources or alternative legal services providers (ALSPs)? 

Process

• What processes exist for common workflows? 

• Why are things being done the way they are—because they’ve always been done that way or because that is the optimal way to do them? 

• What metrics are you using to account for success? 

Technology

• What technologies can be implemented to make it clear who is responsible for what? 

• How can artificial intelligence (AI) and self-serve resources be implemented? 

• Is there work that could be streamlined with a technology product or solution? 

Evaluating Resources

The common theme running through all of these questions is thinking about how work can be shifted from more expensive resources to less expensive resources. You can even look to existing processes and technologies that exist outside of legal to drive efficiency within legal. “I was talking to a legal operations professional who said that, when she got her job, there wasn’t any intake process in place for contracts,” says Rubin. “She used a non-legal task management system to create that and show the value of the process.” 

When making these evaluations, it is helpful to have a matrix for how you go about it. These four aspects of internal and external work should be part of your assessment and can help you identify areas where you can make quick wins: 

• Risk – Low to medium risk work likely doesn’t necessarily need to be done by Big Law firms; there are many options on the market that can take low risk work and provide good results at a lower cost.

• Complexity – As with risk, low to medium complexity work doesn’t always require using Big Law firms; consider other options for this work as well.

• Duration – If you have a short-term project or even a two-year project at a high scale, is that something that can be done with nonpermanent resources or providers? 

• Repeatability – How repeatable are the tasks you’re doing and is there a technology product or solution that could be used to reduce the workload? 

Bringing all of these elements together and successfully assessing work allocation requires one additional component: data and metrics. Measuring the effects of your decisions with data makes sure your efforts are having the intended effect and providing cost savings. Rubin quotes Legal Operations Consultant and Legal Innovation Advisor Lucy Bassli, who said that “data is a gateway drug to legal operations.” If you don’t know what is happening in your legal department, you’re not going to make effective changes. The metrics you measure should be specific to your legal department and the problems that you encounter. For example, you may discover that a particular practice area is driving a significant percentage of outside counsel spend or that there is a seasonality to your spend that might be addressed preemptively.

The opportunities to implement people, process and technology changes to drive cost savings are myriad and for many companies there is ample low-hanging fruit. However, change management is hard and success is not a foregone conclusion. When implementing a new strategy, remember that the most successful departments take careful stock of their data and prioritize and measure the impact of all initiatives. When you do this, you not only increase your likelihood of success, but you also make it easier to make the business case for your decisions and, most importantly, show cost savings.