General Counsels seek to reduce cost, to do more with less. That is clear from virtually every survey and conference since the 2008 economic crisis. The Altman Weil 2015 Chief Legal Office Survey (PDF), which came out this week, confirms the trend.
Question Six, which has three parts, asks GCs if they engage in any of about a dozen to cost control measures. Examples include price reductions from law firms, improved internal efficiency, and reducing the amount of work sent to outside counsel. One choice is “Modified work done to match legal risk levels.”
As I have defined Do Less Law (see Do Less Law – A Taxonomy of Ideas), it includes gearing work to the risk. I regularly blog and Tweet about DoLessLaw. Not doing work, or doing less, saves far more than doing the same work efficiently.
Saying “match legal effort to risk” sounds so sterile. Perhaps less kind but more apt is “stop over-lawyering”. The first page of Altman Weil’s survey interpretation observes:
“Although some of the work that law departments won’t do this year is likely the result of the natural completion of large litigation matters or transactions. Some of the decreases will come from work that Chief Legal Officers have decided is simply no longer necessary. This more aggressive rebalancing of cost and risk is an important evolution in strategic thinking for many CLOs.” (Emphasis added.)
Let’s unpack the data behind this. The first part of Q6 asks GCs if they have engaged in each of the dozen or so cost saving initiatives. About one-half way down the list, clocking in at 30% is “modified work done to match legal risk levels”. Part two asks GCs to rank these initiatives on the amount of time invested in each. Here, matching work to risk was the biggest time investment for 25% of law departments, making it the fourth highest of the dozen choices. And finally, part three asks about the “value realized from cost control efforts”. Here, matching work to risk was highest for 20%, putting it in the middle and just behind AFA.
Separately, Question 3 asks “If you plan to decrease your spend on outside counsel in the next 12 months, where will the work go? Scoring highest at over 75% is to in-house legal staff. If you had any doubt that companies are pulling work in, get over it. Second highest, at 48% is “it’s work we no longer need to do”. I wish I could unpack that one further: does it mean the legal need has gone away altogether or that companies are taking more risk? Perhaps the survey will focus on that more next year.
Law firm managers can wring their hands about GCs who do less law. Or, they can fight for market share by accommodating the need to do less law. That means careful scoping and understanding the client’s risk tolerance. Smart firms will, on some matters, do less. That will earn client trust and help them gain share. We are at the beginning of a long road.