Reducing outside legal spend is a top priority for corporate legal departments. Some cost–cutting measures departments are implementing include working with small and regional law firms; taking greater control of e–discovery costs and processes; and shifting work back to the business side of the company. Legal departments also are bringing more work in–house and being more selective about when and how they work with outside counsel.

The Changing Relationship Between Legal Departments and Outside Counsel

When they do retain outside counsel, legal departments are insisting on greater transparency, efficiency, value and cost–savings. They favor firms that can provide proactive counsel and guidance to help the company avoid or mitigate risk.

One major change in the relationship is the increased use of alternative fee arrangements, with clients often dictating the terms. Another shift is in the type of work given to outside firms. Legal departments may choose to keep certain matters exclusively in–house, retaining outside firms for highly complex litigation, for example.

The In–House Outlook: More Work, Fewer Resources

By keeping more matters in–house, legal departments are reducing their legal spend significantly. This creates a dilemma, however, because it can strain limited budgets. Legal departments are staffing selectively and making greater use of project lawyers and paralegals as a way to manage costs.

Gaining More Control over the E–Discovery Process

The costs of compliance with e–discovery rules for companies – and the serious consequences of noncompliance - are growing. As a result, companies seek greater efficiencies to help control e–discovery costs. Organizations are working to set up better systems for controlling and maintaining records and information, and also are looking to e–discovery vendors for cost–effective technical solutions.