Becoming the Informed Purchaser

“Our lawyers don’t seem to understand that I have to report to the Board, and I do not look good when every month the legal costs are beyond budget. They don’t seem to have any plan for the matter and just react to whatever is happening.”

In today’s world of complex transactions and litigation, a major challenge for in-house counsel is to control large legal matters to achieve an optimal outcome whilst ensuring legal costs are proportionate to ROI. An often overlooked impact of such matters is the involvement of key business personnel and management.

One of the most powerful cost control measures is the use of project management techniques, early case assessment and strategic case planning. This results in not only demonstrable cost savings, but reductions in the impact on your people and the business. Better commercial outcomes are achieved at an earlier time as the techniques are focused on aligning outcome with expectation and identifying early opportunities to finalise matters.

The use of decision trees starkly highlights the options and what are optimal outcomes, taking into account likelihood of outcome, possible consequences and costs and are particularly useful in formulating a clear report to the business for the purpose of decision making.

Our extensive experience in matter management enables us to work with your lawyers to prepare a realistic project plan, with clear deliverables, time frames and detailed budget, acceptable to both client and lawyer. This plan enables you to make decisions about your legal spend, analyse options, evaluate risk, develop a strategy, and assign internal resources. Continuous monitoring of progress against the plan ensures early identification of issues and provides the opportunity to change strategy.

In other words, you look at the Big Picture, and are proactive rather than reactive – you gain back control.

Legal Function Review

Optimal Legal Department = Right number of lawyers, with the right skills, doing the right things, in the right areas = maximum effectiveness of the legal department.

Resource matching the in-house legal department is the first step in managing the legal spend as it informs the make/buy decision.

An effective legal department delivers coverage in crucial areas, thereby maximising compliance and minimising risk, with consequent reductions in legal spend through minimised payouts and external legal cost.

Resource matching the in-house department involves analysing and defining the in-house lawyers’ roles, determining how that role can best deliver coverage to the business, and thereby identifying what work should be outsourced.

Undertaking the exercise enables the legal department to measure and demonstrate its value to the business in terms of hard economic data.

The data collected in the review is used to formulate a business case to justify the resource matching decision which itself may involve:

  • Change in role of in-house lawyers (e.g. recommendation that legal function concentrate on particular areas, and outsource other all other areas of work)

  • Change in skill sets (e.g. employment of lawyers with specialised knowledge, or development of such expertise in existing lawyers)

  • Change in numbers of in-house lawyers