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The Remarkable Inaction of General Counsels in the Face of Crisis and Budget Crunches

We are facing the worst economic crisis since the Depression. Corporations are slashing budgets. General counsel are under pressure. What are they doing? More of the same. 

Law Department Budget Cuts Could Lead to Change in Outside Firms (The Legal Intelligencer, 12 Dec 2008) reports on a new Altman Weil Flash Survey on Law Department Cost Control.

Reading what GC plan to do, my eyes glaze over (MEGO). I have read about the “solutions” mentioned for two decades. GC seem unwilling to change in meaningful ways how they work or manage outside counsel. Ok, they will adjust the mix of law firms, bring some work back in, and pressure law firm on rates. Wow, how innovative, how dramatic. Not.

Then there are the 12.6% of respondents who “said they would look to cut costs by sending work overseas.” Well, at least a few are willing to try something relatively new. But that’s lower than the almost 50% I mentioned in Future Law Department Spending and Work Pattern Trends. That survey looked 5 years out. I suspect from the tone of the article (and hence survey) that the time frame was only one or two years.

“I can’t risk doing x, it might not work” is the usual refrain. Perhaps today the better question is “Can I risk not trying something new?” And that applies to a host of ways that could save money, for example, legal process outsourcing (LPO), decision trees, establishing best practices, or applying business intelligence to analyzing e-billing data.

  1. Internet Lawyer

    Real bad economic times will result in paralysis and not action on the part of the GCs. Lawyers on the whole (I know I am preaching to the choir) tend to be risk averse and therefore usually not the innovative types. I think you can safely bet on more of the same..right off the cliff.

  2. Lee Glickenhaus

    The age old rap on IT staff is that “no one ever got fired by buying Microsoft”. Maybe GC and their techie underlings aren’t all that different. But you’re right — the same song has been playing for decades. When times are flush “it ain’t broke, why fix it”. When times are lean “it’s too risky in this environment”. The legal profession has never been known for innovation or risk-taking, no reason to expect that to change anytime soon.

    Guess we should order that Vista thing now.