Recent headlines have been riddled with news of an impending economic downturn in the U.S., with some experts predicting a  downturn in the coming 12 months.

Whether or not the recession hits, organizations and their in-house legal departments should start preparing for all possible scenarios now. While recessions or even just dips in the economy tend to impact all sectors, there are things you can do in advance to lessen the amount of hardship your department has to bear should  the hard times come. 

Better yet, if we avoid a recession, the changes you make now will still benefit you in the future in the way of increasing efficiency and reducing costs.

The following are six tips for in-house legal departments looking to proactively manage for risk from a future recession.

1. Focus on budget

In-house legal departments have been asked to do more with less for years now, and those demands will only increase if a recession comes. Trying to spend less during economic uncertainty seems like an obvious answer, but finding ways to do exactly that can be a little tougher. 

Start by taking a step back and taking a thorough look at all your spending to see exactly where your money is going. Then determine how that matches up with where you should be spending your money and what’s must-have versus nice-to-have, with an eye toward targeting the biggest buckets of spend where you can make the most impact. 

In those areas, figure out how you can decrease or shift your spending — the remaining tips in this list are helpful ways to go about it.

2. Review processes to identify inefficiencies

Even with an increased focus on efficiency in recent years, many legal processes are still plagued with inefficiencies. Now is the time to really drill down into how you’re doing things and whether there’s a better way. 

Solicit perspectives from newer team members, other teams, or an outside consultant – often a fresh pair of eyes can better identify necessary changes than those who are entrenched in the business. Once you identify your biggest inefficiencies, you’ll know where to focus your efforts.

3. Rely on legal ops

If you have a legal ops function at your organization, use it. If not, you might want to consider creating one. Legal ops exists precisely to help in-house legal departments streamline their workflows and boost efficiency. 

Lawyers should be focusing on legal work – tasking them with reviewing processes and improving efficiency is itself inefficient. 

Companies with a legal ops function will be better positioned going into any recession that may come and have better resources for surviving it when it does.

4. Automate whatever you can

If you have yet to embrace legal technology, the time to start is now. Many of the tasks and processes of a legal department no longer need to be, and indeed shouldn’t be, handled manually. 

In fact, many of the most time-consuming activities of in-house departments are ideal candidates for AI and automation. 

This doesn’t mean they’re unimportant – often they’re critical to the department and the organization’s success, but they’re simply routine, repetitive, and tedious. Automation tools were developed to handle exactly these kinds of tasks, and to do so faster and more accurately than humans can. 

Letting technology handle the tasks it can and focusing your staff on higher-value work is critical to accomplishing more within limited budget constraints. And there are options for every budget.

5. Rethink your staffing

Recessions don’t have to mean headcount reductions. They should, though, make you reconsider how you’re using the resources you have. 

Are the members of your legal team working on valuable work that benefits the organization, or are they still bogged down in routine or administrative work? 

Given current pressures to contain costs, having your staff work on tasks that are below their skill levels is a waste of your valuable resources, and during a recession it just won’t be an option. Start focusing on using your team to the best of its abilities now, and you’ll be in the best possible position if budgets get even tighter.

6. Consider outsourcing more

Once you rework your staffing to make the most use of your resources, how do you handle the tasks that remain? The answer isn’t always hiring more people. 

In fact, outsourcing work to a third party is often the most efficient and cost-effective solution. 

The market for alternative legal service providers (ALSPs) has exploded in recent years, and ALSPs now offer affordable services in nearly every area you can imagine.

Switching from outside counsel to flexible counsel, where appropriate, can provide numerous benefits in addition to cost savings — and the flexible counsel rates do represent a significant discount from Biglaw. 

Flexible counsel providers attract the best and brightest from in-house and private practice roles. These lawyers bring deep expertise without the commitment of a full-time hire or the price tag of a large firm.  

An additional benefit of outsourcing is that you have access to a scalable workforce, so you can bring in help when you most need it and not have to worry about idle staff when things are slower. 

You can focus on maximizing internal efficiency in tasks that most build company revenues and value, while outsourcing the rest. It’s a winning strategy for your department that will set you up now for a workflow system that can withstand a recession.

While no one can predict the future, many experts are seeing storm clouds on the horizon. 

Regardless of how the economy may ultimately fare, taking the right steps now will keep you from being caught unprepared in the event a downturn does occur.