Now more than ever, legal departments are expected to achieve more with the same or fewer resources. As former in-house attorneys, we understand the impact these pressures often have on your ability to serve the business. In a recent CLE program, Maximizing Resources for Efficiency and Cost Savings: A Guide for In-House Legal Departments, we tackle this issue head-on by exploring proven strategies to help reduce costs and optimize efficiencies within the legal department. Below is a summary of those strategies.
Adapt Amidst Resource Constraints
In-house legal teams operate in a fluid environment, regularly navigating changing operational and strategic priorities, as well as increased responsibilities arising out of new laws and regulations in areas like Employment & Labor and Data Privacy & Security. In order to adapt amidst a resource-constrained environment, GCs and their teams often rely on such resource optimization tactics as:
- Prioritizing and Streamlining: Leaning into strong organizational skills to prioritize tasks, and streamlining operational
- Adopting Legal Technology: Using technology solutions to enhance productivity in legal operations, such as document management, legal research, and AI-powered contract review tools.
- Leveraging Peer Networks and Mentors: Actively seeking mentorship opportunities and building strong peer relationships can provide access to valuable insights, advice, and resources.
- Embracing Diversity and Inclusion: Fostering an inclusive culture through workplace policies designed to promote equality and support for underrepresented groups can measurably improve team morale and drive better decision-making and innovation.
- Adopting Flexible Work Practices: Implementing flexible work arrangements that promote a healthy work-life balance can help retain top talent, reduce burnout, and enhance productivity and engagement.
- Collaborate Across Functions: Working closely with other business units not only fosters an integrated approach to problem-solving, but also, can enhance efficiency and reduce costs by sharing resources such as data and technology.
- Leveraging Data for Decision Making: Using real-time data (KPIs) to identify trends, predict risk, and allocate resources can to help legal departments improve efficiency and reduce costs.
- Outsourcing Legal Work: Outsourcing specific legal tasks to outside counsel with subject matter expertise can help meet fluctuating workload demands without adding headcount.
Maximize the Value of Outside Counsel Relationships
When choosing external legal counsel to support your department, quality, efficiency and value are typically the key drivers. Many GCs form long-term partnerships with outside counsel, as a means of ensuring consistent quality, reliability, responsiveness, and alignment with the company's legal and business strategies. Cost considerations are also important, especially when resources are limited. Experienced legal leaders utilize the following best practices to help maximize the value of these relationships:
- Legal Spend Management: Develop a disciplined approach for assessing your department's legal spend, such as assigning this role to a dedicated team of employees or outsourcing to a third party vendor with outside counsel management and legal invoice review expertise.
- Outside Counsel Guidelines: Implement guidelines relating to billing processes, rate increases, invoice format and submission requirements, non-billable items and staffing requirements.
- Competitive Selection Processes: Build-in proper checks and balance by implementing a simple RFP process for new engagements. Also, request regular check-ins to ensure the relationship is on track.
Leverage Legal Operations
"Legal Operations" as a function is now a well-recognized role within today's legal ecosystem, having evolved over the years since its emergence shortly after The Great Recession of 2008. Many GCs rely on this function to help manage and improve their legal function (specifically, its people, processes and technology). However, legal ops can vary widely across different organizations, depending largely upon the size and relative maturity of their legal function. In this way, legal operations are a continuum, not a monolith.
Assessing your legal operations is therefore a necessary and important first step, particularly if you plan to leverage this function as a tool for optimizing efficiency and cost-savings within your department. A typical assessment examines 4 core areas of the corporate legal function: outside counsel and legal vendor management; legal spend; technology; and staffing and training. CLOC's "Core 12" Maturity Model [include link?] is a widely recognized standard by which legal operations are then regularly measured for improvement. Of the Model's 12 core areas, the following 5 (a/k/a, the 5 finger grip described in our CLE session) deserve the most attention:
- Business Intelligence/KPIs: Using real-time data (not static, rearview data) to make informed decisions; and building a customized reporting tool (vs. a generic dashboard) that measures what you value and your company's strategic goals.
- Financial Management: Managing by measurement (e.g., measuring total legal spend both outside & inside; legal spend as a percentage of revenue; budget-to-actual spend; etc.)
- Outside Counsel and Vendor Management: Developing law firm and vendor relationships that deliver value through clear guidelines and competitive procurement processes, as discussed above.
- Information Governance/Technology: Design information policies (e.g., data security and privacy) and choose technology solutions (e.g., contract management system) that align with your business and minimize risk.
- Knowledge Management: Tap the knowledge and capability of your entire organization, including attorneys, legal support functions, project managers, technology support and management, finance team, and senior legal ops.
For your own reference or sharing within your organization, we've created a one-page summary of the strategies discussed in this CLE session.
OGC offers partner-level attorneys with extensive corporate backgrounds and industry-specific knowledge. Our OGCs can seamlessly integrate with in-house legal teams, enabling collaboration with key business functions, alignment with company objectives, and more cohesive and efficient legal solutions. We deliver high-quality, high-value, and efficient legal services at rates that are a fraction of Big Law, and in doing so, are an ideal solution for GCs needing to manage increasing workflows amidst resource constraints.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.