During the first six months of my marriage, it was my job to pay the bills and balance our checking account on Quicken. Everything was going just fine until the day my wife uncovered a bunch of entries marked "stuff." This was a creative accounting technique I had developed in bachelorhood. It's a technique I think the Enron accountants also used.
This is how it worked. If I came across a discrepancy of less than $150 while balancing my checkbook, I would simply add a Quicken entry for that amount and name it "stuff." Voil?? 1/2 , my checkbook was balanced. It didn't take long for my wife to fire me as the family's budget manager. Although I never admitted it to my wife, I was glad to be demoted.
I'm sure there are a number of readers out there who also would gladly relinquish their budget management responsibilities to spend time on more important tasks (such as keeping their clients out of trouble). Unfortunately, though, budget management skills are as important as legal ones in the in-house bar these days.
"[It's all about] in-house counsel owning the entire legal spend and managing it like a business," Suzanne Hawkins, managing director at Huron Consulting, told our senior editor in this month's cover story.
"It's about looking at alternative places to spend money and thinking creatively."
Our goal with the cover story is to identify the best practices for managing a legal budget. The five solutions listed are by no means earth shattering. Instead, they are tried-and-true techniques for trimming fat from a legal budget. In addition to the cost-cutting strategies listed, we also highlighted some key budget numbers from established benchmarking studies. You can use these numbers to decide whether it's worth fighting for more money next year.
One of the more controversial cost-cutting solutions outlined in this story is charging back business units for legal services. It's controversial in part because it requires legal staff to keep track of their time--something only the most masochistic lawyers enjoy doing. But it's often the best way to force business units to take ownership of their legal spend.
In the end, though, no single solution is the silver bullet. Rather, as Hawkins points out, budget cutting is a creative exercise. But don't get too creative--you may find yourself demoted. Or worse, in handcuffs.