3 cost-cutting tips for legal departments

Analyzing workflows, evaluating law firms and preventing extra e-discovery expenses can slash overall spending

Check out our exclusive video about cutting costs, featuring Audrey Rubin, chief operating officer of Aon's law department.

A recent survey from the American Cleaning Institute, which represents the U.S. cleaning products industry, found that 89 percent of Americans said they were very or somewhat likely to do some spring cleaning this year. Some plan to tackle the grime that’s built up in their kitchens. Others want to scrub their windows to a shine. Whatever cleaners have on their to-do lists, they likely are aspiring to restore order and calm to spaces that have become messy and stressful over time.

1. Analyze Workflows

Joy Saphla, managing director at Huron Legal, says that legal departments panic all too often when it comes to reducing spending. Typically, she says, their knee-jerk reaction is to shrink their internal headcounts or immediately ask their law firms for steep discounts.

2. Evaluate Law Firms

The next step in the clutter-busting, cost-cutting process is for legal departments to take a hard look at their relationships with outside law firms and work to knock dollars off of the hefty bills they regularly receive from them. Experts say most companies in the Fortune 1000 spend 60 percent of their total legal spending on outside counsel.

3. Prevent Extra E-Discovery Expenses

It’s no secret that in-house lawyers hate astronomical e-discovery costs. A recent FTI Consulting survey reveals that 94 percent of them find the cost of e-discovery “frustrating.”

Counsel also have been experimenting with cost-shifting, through which they attempt to get the other side in a case to pay for their e-discovery expenses. Lindsay says there are two hooks that defendants tend to hang their hats on.

One is Federal Rule 26(b)(2)(C), or the Proportionality Rule, which essentially says the cost of discovery should be in proportion to the amount at issue in the case. “If you can come up with an argument that what [the other side] is seeking is going to burden you far in excess of the amount at issue, you can ask the judge to force them under this rule to pay or subsidize in some degree your cost in doing this,” Lindsay says.

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Ashley Post

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