Corporate legal teams’ response to economic pressures varies from complete hiring freezes to budget trims and delays to strategic projects. But one option — doing nothing — is not on the table.
In the quest for new efficiencies and consolidated resources, several General Counsel and legal talent professionals share how to avoid decision paralysis and start rightsourcing teams and practices.
It all begins with your budget.
As painful as it might feel, says Renuka Drummond, General Counsel, IDG, Inc., it’s necessary to get a really “detailed look at every single line item in your budget.” From there, delve into the following areas, frame questions to dig deeper and find areas of duplication, and identify ways to rightsource the resources needed for Legal to deliver.
- Local counsel
In each jurisdiction, identify how many local counsels you are using. If there is a handful on your roster, you’re not alone. Determine if winnowing the list to one or two firms can yield some savings. For example, Drummond says that for companies with large IP portfolios like hers, it may be possible to consolidate to one agent of record and lose some local representation, which in turn could create back-office efficiency.
- Outside law firms
Private law firms face economic pressure, too, with announcements of delayed starts for associate classes and staff layoffs commonplace. It is an opportune time to discuss rates with outside counsel and possibly renegotiate them. Inquire why some blended rates are higher than others. If it’s a staffing issue, ask if a partner is necessary for the matter or if a mid-level or a junior associate could handle it.
- Industry Benchmarks
General Counsel often feels that they should know everything about legal services. But when Jacqueline Lee, Vice President, General Counsel, of Flynn Restaurant Group, shifted from that mindset and began reaching out to people more knowledgeable than her, she discovered some of her best ideas.
Lee taps into her network of professionals, from legal tech, pricing, and alternative fee arrangement folks to legal service providers and others. She has found instances of competitors paying far less for the same services and delved into fixed fees by phase for litigation.
Vendors, peers, and interim attorneys all have market intelligence to share. Most are excited to apply best practices to support friends and clients and are waiting to be asked. Tracy Scanlan, Vice President of Client Development and Legal Affairs at Paragon Legal, often hears from General Counsels who wonder if they are the only ones struggling with work overflow, unpredictable business demands, and talent shortages.
Scanlan thinks that getting a third-party perspective by speaking with respected people in the industry can help GCs show their leadership team, “Hey, we’re not the only ones facing this … and this is what I think we can do to help our company.”
- Now or later. Time and energy.
“Most legal teams are smaller than everyone wants them to be. You can’t tackle everything all at once,” says GC Drummond. Her best hack? Prioritization.
For example, when dealing with a strategic initiative to be completed in a three-year timeframe, she could have easily felt thwarted by current budget restraints. Instead, she recommends playing the long game along with some short-term “for now” steps. Determine which clearly defined priorities, such as revenue generation, can be met in the next quarter and what needs to wait for later.
The top priority for Drummond was to gain approval on the critical aspects of the project. She put phase two to the side but still in view and ready to tackle once the top priority was met. Not wanting to lament about what Legal had to give up now, she reframed to ask, “Is this the best way I can use my time and energy?”
Rightsourcing in an era of new efficiencies for GCs Drummond and Lee meant bringing on flexible-hire lawyers to support high-priority projects as well as to cover daily demands while in-house attorneys focused on milestone events.
Paragon’s Megan Kelly, Director of Attorney Development, continues to see how flexible legal talent can jumpstart in-house rightsourcing efforts. Not only does Legal gain a person hitting the ground and the immediate help needed, but new resources can be parlayed into long-term support once pressure eases.
To avoid decision paralysis and optimize legal resources for success, start by thoroughly examining your budget and identifying areas of potential savings. Consolidate local counsel and renegotiate rates with outside law firms, leveraging industry benchmarks and seeking third-party perspectives. Prioritize initiatives and consider flexible legal talent to support high-priority projects and long-term growth.