Top 5 Ways In-house Legal Teams Can do More with Less

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When facing an uncertain economic environment, companies often get pressured to reduce costs, resulting in hiring freezes, investment reduction, and a pullback on expansion or growth plans.

Not surprisingly, this pressure is pushed down throughout the corporate infrastructure, and many corporate law departments are feeling the squeeze like never before, being mandated to cut costs and carefully evaluate any spending. How, then, can legal departments do more with less while continuing to handle an increasingly complex legal and compliance workload?

Indeed, in the Thomson Reuters Institute’s 2022 State of Corporate Law Departments Report, half of the senior in-house counsel surveyed cited “conducting operations in the most efficient way possible as a top priority for their law department, even more than safeguarding the business, which is arguably the main purpose of an organization’s legal function.”

Efficiency seems to be top-of-mind for many in-house lawyers. In the same survey, they named cost pressures and doing more for less as their biggest efficiency challenges. Other challenges, such as managing the organization’s digitalization and technology initiatives and improving operational efficiency and streamlining work processes were also cited.

Yet, what specific steps can corporate law departments actually take to help them do more with less? Here are several ways company chief legal officers can be thoughtful about their overall legal spend:

1. Shifting work to lower cost legal providers

This one might seem obvious: Find lower cost legal providers. Corporate law departments that see a lot of litigation, employment issues, intellectual property (IP) matters, or merger and acquisition (M&A) situations might consider hiring external law firms outside the legal hot spots of New York City, Los Angeles, or London. Instead, much of the work can be done — without significant change in the quality of the work — by lower cost regional law firms in less expensive parts of the United States, such as Kansas City, MO, Nashville, TN, or Denver.

Often these smaller regional powerhouses can offer expertise in litigation, M&A, employment, or IP that matches (or comes close to) the work done by big city firms at a much lower cost. Additionally, sending certain work, such as M&A or due diligence, to a smaller regional firm will likely allow the corporate law department some latitude in seeking caps on fees for larger projects or finding other alternative fee arrangements that may not always be available at bigger, less-flexible law firms.

2. Offshoring legal talent

Take advantage of the rise in remote work and tap the pool of talent available globally.

This strategy could mean bringing on legal talent in other countries, such as India, where employees or contractors can do the more routine type of legal work, such as reviewing contracts and non-disclosure agreements (NDAs), conducting due diligence in M&A transactions, or other high-volume, lower risk tasks.

Moving this work to offshored legal talent doubles the benefits: It not only allows your law department to complete this work more affordably; it also frees up your higher paid legal talent to tackle more productive and valuable work for the organization. In fact, if your company already has an offshore office, then building up the legal talent there could enable your team to offer more “real-time” advice to employees in global offices and cover more time zones to support the business.

3. Leveraging new and existing talent who can flex

Many law department leaders are reevaluating their talent needs to ensure all resources are being efficiently optimized. Focus hiring on more senior talent who can flex their legal skills beyond their area of expertise, making them more useful as utility players that can help the department meet all its needs.

Many departments are seeing the value in hiring more versatile lawyers who can advise the company on multiple areas of the law, while bringing flexibility to the department and giving legal teams the depth to react dynamically to changing circumstances.

This strategy can go beyond new hires as many department leaders are asking their existing lawyers to stretch beyond their core areas of the law to meet new mandates or demands from corporate leadership or other areas of the company.

4. Utilizing the budgets of other business units

When working with other business units within the organization — whether it’s finance, human resources, information technology, or the tax department — corporate law departments should not necessarily pick up the tab for all the collaborative work being done.

In fact, when teams from other business units ask for legal resources or for the law department to take on a large outside project, ask those departments to pick up all or a portion of the cost. Teams can also share the costs for hired personnel required to perform functions for two or more teams, such as equity administrators, international corporate secretaries, and the like.

5. Hiring a legal operations professional to better leverage technology

Many GCs are hiring legal operation professionals as one of their first and most important hires, giving these professionals the mandate to improve department efficiency, provide metrics to benchmark productivity, and allow visibility into contract cycles to better streamline the work process.

As the 2022 State of Corporate Law Departments Report showed, there are a number of legal technologies that many law departments currently use, and that number has grown over the past several years. For example, almost two-thirds of departments now say they use e-signature technology regularly and more than half use legal research and contract management technologies in their day-to-day operations.

Legal operations professionals can add tremendous value by optimizing technology use and providing metrics that can measure performance and improvement. This then allows legal department leaders to speak in the language of data and numbers — one that is understood by other business units — which can help them provide visibility to other business units and the board of directors about the legal team’s performance and can help chief legal officers make their case for more resources if and when needed.

Keep improving with your eye on the bottom line

Beyond these five steps, there are other ways that corporate law departments can satisfy the mandate to do more with less. As efficiency remains a crucial goal for many in-house law departments, related factors such as improving talent and resourcing strategies, as well as pursuing needed technology initiatives, will become added benefits for those departments looking to right-size their needs with the resources they have available.

This article was produced in collaboration between the Thomson Reuters Institute and ACC's Docket magazine.