Download a PDF of the full story with more sidebars.
Online Exclusive: Law Departments Purge for Change
The law department has also maximized its existing potential by re-evaluating the skills and talents of lawyers already on staff and redeploying them where appropriate. As a result, the lawyers can handle more sophisticated legal work within the department, putting a significant dent in the outside counsel budget.
As in most legal departments, Best Buy's in-house counsel are pulling more weight these days, but Hartman says the greatest efficiency strides have been realized in how the work is managed and redistributed.
"When our new general counsel [Mike Luttig] came in four years ago, we had about 400 law firms, and people were pretty sloppy in the way they managed the firms and passed work out," Horton says. "This became one of the top priorities that permeated all the way down to every attorney in the department."
Since then, Boeing has tinkered with the mix of attorneys in the 143-lawyer department to achieve the right balance of talent and capability. The ability to effectively manage and monitor outside counsel and better coordinate projects, Horton says, is the key to optimizing the budget for outside counsel.
But they don't cost their weight in gold. A top-notch paralegal is still far cheaper than a lawyer and often more effective on routine matters. Law firms are still needed, of course, but Williams tries to bring them in only when their expertise is truly required. And when it comes to rates, she takes a hard line.
"I don't know any other business that would send you an invoice and just give themselves a 35 percent raise," she says. "We use an automated system to catch those things, so if someone's rate changes, it gets flagged and comes to my attention."
"You still need a few firms within each practice area--a little bit of competition is good," Brouse says. "But with fewer firms you're able to create strategic relationships. Let's face it, this industry has always been driven by volume, so the more volume you give a law firm, the more leverage you have when you're negotiating cost."
The program has been effective. In 2009 the company saved $2 million, and it expects to save $4 million this year.