The threshold issue in tackling the costs of legal work is to determine the drivers of demand for legal representation. We start with the premise that legal work is derived from a client’s business activities, market position, strategies and risk tolerance. The profile may be segmented into three broad categories: strategic, operational and mandatory needs. A general counsel faced with the challenge of controlling legal costs must first have a solid grasp of the categories of legal work, associated costs and sources of demand for legal services. Legal work is a process as well as a craft.
Lawyers’ approach to the work should reflect their role as stewards of corporate assets, as well as the organization’s risk tolerance. How does the business model reflect the role of lawyers? Are they valued partners of corporate stakeholders, or legal project managers, or both? Technical specialists or business team members? What work may be handled by other professionals and paralegals? Cost management requires appropriate deployment of skills, work flow, sourcing and technology.
Traditional benchmarks of legal spending are important starting points for cost analysis, but they are limited. Aileen Leventon uses a proprietary methodology that provides new insight to manage legal spending and provides an action plan to sustain cost optimization.