Controlling Legal Costs With Collaborative Partnerships

As corporate legal departments are being reshaped by rising legal fees and a shift toward innovative service delivery models, controlling legal costs has become a dominant concern. Wolter Kluwer’s Jennifer McIver discussed the challenges of cost control and value maximization with legal ops professionals at the recent Legal Operators’ Feast & Forum NYC Roundtable.

McIver noted that Wolters Kluwer’s 2024 Future Ready Lawyers Survey has identified cost and price pressures as the top challenges for the next three years. Data from the 2024 Real Rate Report underscored this trend, showing average rate increases across industries. For example, timekeepers’ average rate was 7.1%, while law firm partner rates in key markets exceeded $1,000 per hour.

Maintaining a balance between cost control and strong relationships with outside counsel remains a key challenge. Findings from the Blickstein Group LDO Survey Report show that although 96% of legal departments want law firms to provide innovative service models, 69% maintain that pricing professionals can drive this change. Only 12% work directly with pricing professionals, relying instead on law firm partners. 

This disconnect, coupled with the fact that only 25% of departments share law firm evaluation metrics, hinders progress in optimizing partnerships and achieving cost predictability. However, it allows legal ops to expand beyond their law firm relationships and engage with pricing professionals.

McIver presented several additional recommendations for overcoming cost control challenges. First, maintaining consistent business reviews with relationship partners and key stakeholders helps ensure regular evaluation of business objectives, performance metrics, and opportunities for innovation. 

Second, promoting transparent communication by openly sharing law firm performance metrics and internal legal department data encourages accountability and keeps all parties focused on common goals. 

Third, involving pricing professionals early and often allows them to better understand core objectives and collaborate on innovative pricing models that support cost control strategies. Implementing these practices helps legal operations control legal costs, enhance predictability, and drive innovation.