Departments With Comprehensive Management Programs Thrive

According to benchmarking surveys taken over the past five years, law departments with comprehensive management programs are the most cost effective overall. In the most recent survey, they realized 46 percent lower external legal spend as a percent of company revenue than those without such programs. For law departments with comprehensive programs, the median external legal spend as a percent of organization revenue was 0.11 percent, while for those without them, the figure was 0.21 percent.

For purposes of analysis, the 2014 survey report included the following best practices related to outside counsel and financial management: having defined panels/pre-approved lists for sourcing; matter management and e-billing technology; detailed matter level budgets (phase and/or task level); alternative fee arrangements; and evaluation of outside counsel adherence to billing guidelines. Law departments with multiple program components in place have the most success. These components suggest a department has a plan for the selection of outside counsel and other providers who will handle their work, and for managing the cost of that work and employing tools to facilitate management tasks.

With respect to technology, matter management/e-billing systems are fundamental. Beyond this core, there is a range of available technology to assist law departments, such as management reporting systems and systems for document management, legal hold management, IP management, and systems supporting specific legal services. Data analytics can help sharpen law department management by establishing metrics and key indicators against which to measure performance.