Legal departments, spearheaded by Chief Legal Officers (“CLOs”), are key drivers for achieving a company’s business goals and keeping legal downfalls at bay. CLOs have to constantly deal with changing market forces and stressful cost demands that their departments face, both of which will directly impact the way the company fares1. They approach these daunting responsibilities by following up on technological innovations, improving process efficiency, and outsourcing legal work to create a sustainable and successful legal ecosystem.
The 2016 Chief Legal Officer Survey precipitated several interesting ideas, many of which could be of great use to organizations striving to improve their legal capabilities. The CLOs who participated in the survey stated that cost control is their main challenge. The survey answers revealed few of their top tactics to handle this tricky task. If you have been wondering how to fine-tune the finances of your legal department, some of these tips may help you a great deal.
- Improving efficiency:
The CLOs confirmed that improving efficiency automatically promises better cost control. They rely on the top technology tools available in the market for this purpose. They also said that reallocation of internal resources and a thorough understanding of management work flow helps in increasing efficiency.
- The need for administrative professionals:
CLOs of larger organizations (those with 50 or more lawyers) have a dedicated Legal Administrator to manage their processes, finances, employees, and technology. They said that it is a new role that continues to be redefined, and requires great expertise and experience. The administrators were known to have vastly contributed towards meeting cost limits.
- Intelligent outsourcing:
Finally, adjustments in relationships with outside counsel had a significant impact on cost control. The CLOs managed to extensively cut costs with outside counsel by changing fee arrangements, substituting smaller and lower-priced firms, and outsourcing work to non-law-firm vendors. More than half of all law departments now outsource work to non-law-firm vendors (57% in 2016 as compared to 43% in 2012). This high spike shows that more organizations find it convenient and advantageous to rope in non-law-firm vendors for performing legal services. Some of the top services that these vendors executed for the companies are litigation discovery and document review.
Reallocation of outside counsel Spend2
LegalEase can confidently corroborate these claims. Many of our clients have realized a reduction in legal costs. Our clients approach us when they realize they needed to cut costs, and often transfer a significant part of their work to our staff. A Fortune 500 streaming service saved over 65%, while a Big 3 automobile manufacturer saved a whopping 75% in legal costs. Get in touch with us, collaborate with our team, and achieve similar sizeable savings.
We hope these insights prove useful and feasible for your legal department. You too can break d own the financial and management structures of your legal departments, introduce revolutionary changes, and realize the maximum cost efficiency possible for your organization.