How in-house has guaranteed survival by cost cutting

By Naomi Neilson|15 January 2020

Cost control and cost management have always been defined as among the profession’s greatest challenges, but legal operations has since learnt to adapt.

In the 12th Annual Law Department Operations Survey, a majority of global law teams revealed they have implemented cost-effective methods via technology to ensure their companies can continue to operate in the wake of global financial stress.

David Cambria, chief services officer for Baker & McKenzie’s Global Services said law department operations professionals have been operating like there are constraints in budgets for years, and are prepared if further cost saving is needed.

“It’s another reason to focus on innovation and collaboration,” Mr Cambria said, noting the industry’s ability to utilise technology to benefit spending. “Has the industry really transformed so much since prerecession? The call to action is much stronger.”

Financial and economic downturns can be so severe to a company that efficiency and cost cutting were considered so critical to survival that it is no longer acceptable for an operation to spend freely and without financial purpose or investment strategies.

On this, the report noted C-suites, data analytics and e-billing have increasingly made their way into the corporate counsel profession. It has ultimately led to legal operations which brings business discipline to the whole-of-business law department.

In order to meet cost-cutting challenges, the report also noted many departments have begun to increase the workload of existing resources or bring in more in-house lawyers to assist, while others have built and executed technological roadmaps.

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“The increasingly robust alliance of legal operations and technology is now helping to forge the future of legal operations in amazing ways,” the report added.

However, Brad Blickstein, principal at the Blickstein Group and publisher of the survey, warned that the growth may come to an end and hiring in-house could be detrimental. He noted, however, that in-house work is a good model of survival.

“For decades, law departments have been bringing work in-house to save on costs, only to have that work go back out when the economy turns,” Mr Blickstein added. “It’s counterintuitive, but corporations can simply not politically support the addition of the headcount in the law department in the face of hiring freezes or lay-offs elsewhere.

“I expect we will see the same in legal operations. I know some expect this growth to go on forever, but I fear those people are not looking back far enough.”

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