Cost Cutters

Budget caps. Escalating law firm fees. Headcount restrictions.

This triple threat continues to loom over law departments, compounded by growing workloads from compliance demands and corporate expansions. It's a tricky balancing act to control outside spending by keeping the additional work inside without hiring more attorneys.

So what's a general counsel to do?
To establish some guideposts for budget management, we examined Hildebrandt International's 2006 Law Department Survey and Altman Weil's 2006 Law Department Metrics Benchmarking Survey. Then we sought out advice on cost-cutting techniques from consultants and legal services providers. On the following pages, you'll find selected results from the two surveys, along with the top five ideas that emerged for balancing budget constraints with workload expansion.

Three of the five cost cutters involve using lower-paid professionals for work formerly considered the domain of in-house attorneys or outside counsel. Those include redistributing routine, repetitive work to paralegals and sending high-volume projects such as document reviews to contract attorneys at home or offshore. A fourth suggestion is to spend now to save money down the road by investing in technology that can assess the efficiency of outside firms or increase in-house productivity. The final idea is to make your business unit clients more informed consumers of legal services by tracking attorney time and charging it back to them.

None of these budget balancers is a magic bullet, and some may be more applicable to one legal department than another, depending on department size and the nature of the workload. But all hold the promise of making the workload more manageable while keeping the budget under control.

"All of these things are about in-house counsel owning the entire legal spend and managing it like a business, a trend that is continuing to refine itself," says Suzanne Hawkins, managing director at Huron Consulting. "It's about looking at alternative places to spend money and thinking creatively."

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