Comments on Whether Cost Control is a GC Priority
My prior post asked Is Cost Control Really a General Counsel Priority? My answer was “no”, based generally on what I read and specifically an analysis of the Best Legal Department articles in the current issue of Corporate Counsel magazine. Since not all readers click through to comments, I am sharing here comments by Pamela Woldow of Altman Weil and Steven Levy of Lexician and formerly of Microsoft.
Pam Woldow wrote:
Ron: As a consultant who spends her time in small, medium and large corporate legal departments, I must say that I am inclined to agree that the cost savings tend to be the imperatives of the CEO and the CFO. In general GCs, with some notable exceptions, are still stuck in the 1992 mode of seeking discounted hourly rates and asking for budgets for litigation, which did not work then and still do not – if cost control is the goal. While GCs are talking about needing better cost control, many seem not to know how best to really accomplish the goal. Instead, there is a perception that beating up firms for greater discounts will deliver the goods or, in contrast, they are living on the hope and prayer that because “law is different” they can justify the legal spend at the end of the budget year. From my perspective, they really have been placed in an awkward position. If they take serious steps to achieve cost control, executive management could second guess them.
It is a tough issue that requires GCs to lay out new and different steps to control costs and build consensus with executive management to accomplish the goals and have the requisite support. Without that support, not many GCs are going to seek innovative ways to cut costs as it will be safer to stick to the tried and true.
Steven Levy wrote:
Ron, I echo what Pamela says. I’d add one thing – it’s unclear, at least to me, how much of the lack of cost-control focus stems from the way the articles are written. If the law departments haven’t figured out how to make fiscal issues “sexy” to the reporters and editors, then the story won’t be printed, whether or not it’s there in fact.
To some extent, there is also the Geoff Moore core-and-context argument made so effectively in the Legal space by Cisco GC Mark Chandler. Is cost control “core” to the law deptarment?
Both commentators have extensive experience working in or with corporate law departments. So, are there any voices who disagree? Who will stand up and not only say but present the evidence that cost control is really a top GC priority?
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