Thanks to the residual effects of the COVID-19 pandemic and uncertainty about the near-term future of economies around the world, corporate legal professionals are currently facing significant unpredictability. This adds a layer of difficulty to the already tricky task of keeping spend in check while maintaining optimal legal department performance. To help you succeed in your efforts, our experts have put together a checklist of actions that can help you control spend.
At a high level, our advice is to focus on three areas that strongly impact a legal department’s ability to control spend: the legal bill review process, law firm panel management, and outside counsel budgeting, When these three core aspects of your spend management program are optimized and healthy, you will be better positioned to take on unexpected economic challenges and weather them with minimal legal spend leakage.
Here’s why we feel strongly that focusing on these capabilities can help:
Legal bill review: Billing guidelines are integral to your spend management program. Although outside counsel firms agree to these guidelines when you engage them, it is common for firms to violate these guidelines if your team does not make an active effort to enforce them. The end result is that you pay more than you have agreed to for the services provided. By tightening up this very common legal ops weak point, legal departments typically see immediate improvement in spend control.
Panel management: The goal of a law firm panel is to ensure that the legal team engages the right outside counsel firms for each of their matters. When your panel management approach is strong, legal professionals are better able to identify those firms that provide the most value to your organization. The choice of panel firms is therefore closely tied to your legal department’s performance and ability to achieve the company’s business goals. A data-driven approach can help give your team confidence in the firms they choose to work with.
Budgeting: Budgets give legal departments a level of predictability on matters, or even specific matter phases, that facilitates the complex task of financial planning. A regular comparison of budgeted to actual spend empowers legal teams to respond quickly when a matter is not progressing as planned. Budgets also give you the data you need to identify opportunities for cost-saving measures, such as alternative fee arrangements.
Any legal department can benefit from a well-managed spend control plan, especially in uncertain economic times. Improving the central facets of your plan is a reliable way to cope with instability. For more information on the steps that can help you strengthen these critical aspects of your spend management program, download our checklist: How to control legal costs in an uncertain economic environment.
